HBO’s Real Sports On The “Crisis” In Golf; Why I Still Don’t Believe There’s A Crisis.

HBO’s Real Sports Series has chimed in on the golf “crisis” with a fifteen minute segment that focuses mostly on Mark King, who at the time was CEO of TaylorMade (he now is president of Adidas North America). The piece goes through all of the recent doomsayer sandwich board mantras: courses are closing, rounds are down, and (most importantly to King) sales are down. It all goes through the litany of desperately stupid ideas to retain players, such as fifteen inch hole and soccer golf.

Mark King looks particularly desperate to me in this segment, and he should be. TaylorMade’s efforts to boost short term sales (and thus stock prices and executive bonuses) with a rapid release cycle has done as much damage to the long term interests of golf as anything. Dick’s Sporting Goods recently fired 500 PGA professionals, and many are blaming TaylorMade’s release schedule: With each new driver release promising more yards, Dick’s was forced to offer deep discounts on their huge stocks of the previous models. Dick’s CEO Ed Stack bemoaned: “We are selling drivers in our stores this spring for $99 that were approximately $299 20 months ago.”

So Dick’s at this point is doing the only logical thing: they’re backing off golf altogether. Fool me once …

As I’ve written before, I think the crisis really exists only for manufacturers, retailers, developers and investors. Yes, there is a decline in rounds … courses … sales. But that is a decline from the peak of a bubble driven by irrational exuberance over Tiger, an excess of investment money around the millennium and a misreading of what it all meant. As Bryant Gumbel notes in the segment, in 2007 both the “financial bubble” and the “Tiger bubble” burst.

We hear about the crisis from CEOs, real estate developers, and others who bought into the hype. I note that HBO didn’t go out to interview a bunch of weekend players to see if they were experiencing a shortage of clubs to buy, courses to play or tv to watch.

The truth is that golf is simply returning to its normal levels, just as real estate did. No one really needed the hundreds of new courses that were built during the boom. No one needs the dozens of new clubs released every year. My regular set is now nearly ten years old. Several courses have closed in my area, but I never have trouble finding a tee time. I can watch golf 24/7 on television, and listen to it 24/7 on Sirius XM.

Jack notes that during the early days of the Tiger boom, he was building 20-30 golf courses at a time. Now, Real Sports notes, a course is closing every 48 hours. But suppose that Jack was building those twenty courses each year for ten years (1996 – 2006). (He says that the market “dropped like a rock in 2007.”) That’s TWO HUNDRED courses from Tiger’s “Hello World” to the crash. And then let us suppose that the course-closing-every-48-hours pace continues for two years. All that does is wipe out the courses that Jack built during the boom. And that doesn’t include the Palmer and Norman companies, and the dozens of other firms that were building during that time.

How many courses are there now, compared to 1995 before the boom?

Mark King bemoans the fact that 28-35 year old participation is down 35 percent in the last ten years. I’m sure that’s the GROSS. What’s the net? How many players were gained during the boom years of 1997 – 2007, compared to the losses of 2007 – 2014? Where does the game stand in terms of participation compared to 1995?

King also worries that golf is “shrinking to the point where only traditional people will play.” Read between the lines on that one: Who will buy all those clubs? What will that do to the stock price?

I think that it is probable that golf will continue to shrink from the irrational exuberance at the peak of the boom years. That, however, does not constitute a “crisis.” It is simply a return to normality.

 

 

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