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The Business of Golf Is No Longer Par for the Course

Jun 20, 2019

The game of golf is alive and kicking. In this episode of The Full Count, we look at the business side of golf: courses, equipment, apparel. With Tiger’s historic win at the 2019 Masters, is golf poised to break some revenue numbers? We’ll also examine the impact of Millennials and legalized gambling on the game of golf.


Dave Plaskow:Hello and welcome to ”The Boiling Point.” I'm your host, Dave Plaskow. Today we will examine the everyday business and finance issues faced in the Sports, Entertainment, and Media sectors. Today we're reviewing the evolution of the sport of golf and how it's been impacted on the business side. So now that the warm weather has finally gotten to the East Coast, people are ready to hit the links. So give us the state of golf today.

EisnerAmper:Well, Dave, golf fans couldn't help but shed a tear watching Tiger Woods win the Masters Tournament back in April when he walked off the 18th tee. He was not only walking off to his loudest fans, but also his respected peers. It was really exciting watching him, and the reaction from all the players who respect him such as Ricky Fowler, Justin Thomas, Mack Koocher. They were all waiting to congratulate him. I think the PGA really has to thank Tiger Woods because he created this younger fan base that has really made the game of golf what it is today. I think a lot of these players could have gone into other sports such as football, basketball, baseball, but instead took up the game of golf because of the Tiger Woods effect. According to Forbes, the golf segment is an $84 billion industry in the U.S. and is responsible for almost two million jobs, and those numbers are trending upward. So I think the PGA really has to thank Tiger Woods.

DP: The sport did seem to have a little bit of a lull when Tiger wasn't playing well. I mean, I'm not a golfer. I could probably name golfers that I know on one hand. So I suppose every sport needs its superstars to make the sport better and more marketable.
EisnerAmper:I think Tiger helped bring the masses. I feel that the game of golf has changed significantly with this audience. It's not just your grandfather's country club sport anymore. I think it's bringing in a lot of younger fan bases and even some celebrities that you might not recognize who are drawn to the game. Take, for instance, a rapper, Little Wayne, who tweeted his excitement throughout the Masters Tournament. That's someone you wouldn't really gear toward the game of golf, but someone who shows excitement because of the way the game of golf has changed throughout the years.
DP:Other than marketing it's superstars, does the PGA have any other kind of plan to grow the sport?
EisnerAmper: Yes, absolutely. The PGA Tour and Discovery just agreed to a $2 billion, 12-year deal where Discovery is going to receive all the rights to the PGA Tour, global television and multi-platform rights outside of the U.S. Some of the best players in golf come from countries outside the U.S., so this is a great opportunity to grow the game of golf and increase the viewership of PGA tour events. In addition, Discovery has a multi-year content deal with Tiger Woods, which is quite interesting. On a streaming service, Tiger is going to provide weekly instructional videos. They've also tried to do more head-to-head matches (like the Tiger Woods vs. Phil Mickelson match that aired November of 2018) as Pay-Per-View events. That match was pretty successful. I know they did have some issues with people paying versus people getting the free content, but it did have 750,000 unique viewers, and it provides, a different opportunity for the game of golf to draw in more fans. It has similarities to the Ryder Cup. The Ryder Cup is probably one of the biggest events golf has. Fans love to go to the Ryder Cup, cheer for their country, and see these players play in these head-to-head matches. So I think it is going to provide an increase in viewership and new revenue opportunities for the game of golf.
DP:It seems like a lot of different countries are represented. They have their golf superstars in a lot of different countries. Now going back to the change in audience, talk about other aspects of the golf business, the retail, the merchandising, that kind of thing.
EisnerAmper: I think that golf, over the years, has had its opportunity to grow in different ways. Take, for instance, Callaway. It's one of the largest golf company brands out there. They just announced in the first quarter of 19 they had their net sales increased by 28% compared to the first quarter of last year. What that tells me is a lot of individuals are taking up the game of golf, spending more on merchandise. I always laugh when I go to the golf course the best-dressed person out there usually is the worst player, but it still shows that people want to spend the money on golf equipment. This golf equipment is getting expensive. Technology is changing, and people still want to spend the money on this new equipment. And the other one I thought that was fascinating was one of the best European golfers on the tournament, Justin Rose. He just signed a sponsorship deal with Bonobos. Now Bonobos is more known for their men's fashion and not golf. So it's really interesting to see that a non-golf brand is going into the golf world to try to bring in this additional revenue stream. Bonobos, being very well known in men's fashion, has a good opportunity to increase their revenue streams through golf merchandise.
DP:If you play good, you’ve got to look good. So what's changed about the way people go to the course, how they practice the sport, how they develop as players, whether they're just a duffer or an expert?
EisnerAmper: Golf ventures across the U.S., like Top Golf and Five Iron Golf, have become successful enterprises. Top Golf, for example, was started in 2000 and has now built more than 50 locations and has transformed the old-school driving range into a fun technology-enabled experience. Top Golf uses these microchip golf balls that provide scores and instant feedback to each player's shot, and it allows people to play games at the Top Golf locations. So it's creating this entertaining atmosphere with not only food and drinks, but a little competition. What's interesting, though, is Top Golf has been a success with a majority of its customers being non-golfers between the ages of 18 and 34. So it's a really big draw of millennials. In order for it to continue to succeed and for golf to grow, you really have to have that draw of millennials. And then Top Golf, which interesting, is each location costs approximately $15 million as a capital investment. So to keep growing Top Golf, it is going to have to be continuously funded by these private equity firms and by Calloway.
DP:I definitely could see where technology can play a role in this sport as far as simulations and helping your shot. I'd want to see that gizmo that Rodney Dangerfield had in Caddyshack where it told him when to hit the ball. You mentioned millennials, and I know we can't generalize groups, but are they embracing golf? For the long-term sustainability of the sport, you'd have to get them on board with golf.
EisnerAmper:Absolutely. I just mentioned the demographics of what Top Golf’s success is attributed to. That being said, people are going to these Top Golf locations, enjoying the game of golf, and it is translating into people buying their first set of golf clubs and going to the course and play in a real game. I also think if you look at the crowds at these golf events last month, the PGA Championship at Bethpage, you saw a different demographic of people gearing toward and enjoying the game. They're going to play a pivotal role in golf's continued success and especially when you consider the impact that could have on legalized gambling.
DP: That makes sense. Well, let's dig a little deeper. Where does legalized gambling fall into the mix?
EisnerAmper:Legalized gambling in golf could have a major impact. And it already has a significant impact when it comes to fantasy sports. Sports gambling provides this unique opportunity to engage fans. Where I think golf has the most potential to increase is real-time sports betting. Now, real-time sports betting is not here in the U.S. yet, but it's very popular in Europe. Real-time sports betting has a huge impact on golf, because golf is the only sport where you have 72 different balls in play per round of golf. All of the other sports—such as basketball, baseball—you're fixated on only one ball. So, therefore, when you add in all these different balls, it creates additional opportunities for sports fans to gamble on the sport of golf. And as a result of this real-time sports betting, the PGA tour is using it's data that it's compiling through it's ShotLink technology and selling to IMG Media. Sports gambling is bringing in around $2.6 billion of wagers since it was legalized in the state of New Jersey. Integrating this real-time sports betting will increase this number in future years.
DP:It also lends itself to sponsorships where you might see guys wearing Fan Dual hats or something like that. So, yeah, there's a lot of angles to the gambling part of it. Well, thanks for this valuable information. It's very interesting. Despite all of the early reports, golf is not dead. So that's good to hear. And thank you for listening to The Full Count as part of the EisnerAmper podcast series. Go to for more information on this and a host of other topics. And join us for our next EisnerAmper podcast where we get down to business.

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