It's expensive, difficult, and demands the kind of time most people get only when they go on vacation — or retire. From the dried up fairways of Southern California to the vacant course-side condos on the Carolina coast, we survey the sport's demise — and the entrepreneurs hoping to reinvent it for a new, less patient generation.
One night last September, my 15-year-old daughter, Esmee, told me her plan to try out for the girls golf team here in Pacific Palisades, California. While I was pleased with her interest in golf — which I'd played semiseriously, along with seemingly every other man under 40 in the Tiger-dominated late '90s — I felt I had to prepare her for the inevitable letdown. She lacked the requisite power and the repeating, compact swing I assumed were required of a varsity golfer. Do your best, I told her, but be prepared for the possibility that you might not make the team.
When she texted me a week later to say she'd made the cut, I was stunned. In the years I'd gone to the school, the golf team was a bunch of country club regulars whose swings were nice right-path whips, golfers who'd been playing for a half-decade by the time they got to high school. I asked the coach, James Paleno, what had changed.
"There just isn't the interest we used to have 14, 15 years ago. Now I have kids showing up who have never hit a golf ball before. Kids are just less aware of golf. They have too many other options. And then when they find out it takes five and a half hours to play 18 holes, they're just not interested."
By any measure, participation in the game is way off, from a high of 30.6 million golfers in 2003 to 24.7 million in 2014, according to the National Golf Foundation (NGF). The long-term trends are also troubling, with the number of golfers ages 18 to 34 showing a 30 percent decline over the last 20 years. Nearly every metric — TV ratings, rounds played, golf-equipment sales, golf courses constructed — shows a drop-off. Oliver "Chip" Brewer, president and CEO of Callaway. says.
"I look forward to a time when we've got the wind at our back, but that's not what we're expecting. This is a demographic challenge."
During the boom, most of those 20-somethings who were out hacking every weekend were out there because of one man: Tiger Woods. Golf's heyday coincided neatly with Tiger's run of 14 major golf championships between 1997 and 2008. If you listen to golf insiders, he's the individual most to blame for those thousands of Craigslist ads for used clubs. When Tiger triple-bogeyed his marriage, dallied with porn stars, and seemingly misplaced his swing all at once, the game not only lost its best player; it also lost its leading salesman. The most common answer given by golf industry types when asked what would return the game to its former popularity is "Find another Tiger."
But you can't blame one man's wandering libido for the demise of an entire sport. The challenges golf faces are myriad, from millennials lacking the requisite attention span for a five-hour round, to an increasingly environmentally conscious public that's reluctant to take up a resource-intensive game played on nonnative grass requiring an almond farm's worth of water, to the recent economic crisis that curtailed discretionary spending. Brewer says.
"Golf is an expensive, aspirational game, and a lot of millennials are struggling with debt and jobs. If you don't have a job, golf doesn't really fit you very well."
Combine the game's cost with the fact that golf is perceived as stubbornly alienating to everyone but white males — Augusta National, home of the Masters and perhaps the most famous golf club in the world, didn't accept black members until 1990 and women until 2012 — and it's no wonder young people aren't flocking to it. Greg Nathan, senior vice president of the NGF, says.
"One of the major reasons golf hasn't been growing is because historically, it has not been welcoming enough. We need to make people feel more comfortable."
Not long ago, the game could count on young fathers to hide out on the links, and weekend tee slots are still filled with plenty of off-duty dads. But it takes two to properly helicopter-parent a family these days, and that means parents are spending more of their weekends at the playground than at the country club.
During the Tiger boom, everything about the game seemed to expand, from the length of the putters to the size of driver heads to the scale of the courses themselves. Gary Player, the only non-American to win a career Grand Slam, notes.
"When I won the U.S. Open at Bellerive in 1965, the course measured 7,191 yards. It was a monster. Now, 7,500-yard courses are everywhere."
And those courses have raised their greens fees. Pebble Beach may be able to charge $495 for a round, but when your local public course wants $150, it gets steep. And many of those golf courses weren't designed merely for golf; they were the lure for tens of thousands of homes that aimed to deliver one version of the American dream: golf course frontage.
The symptoms of golfings decline are evident everywhere and can be found in many forms.
Decline in Golf Equipment Sales
Slow golf equipment sales over the past two years have created a glut of inventory at wholesale and retail outlets, forcing them to slash prices. Dick’s Sporting Goods(DKS) was selling some drivers, priced at $299 just a few months earlier, for $99, Chief Executive Officer Ed Stack said on an investor call on May 20, 2014. That day, Dick’s reported it missed its golf gear sales target by about $34 million in the first quarter of 2014. The news helped send the retail chain’s stock down 18 percent, its worst one-day tumble since the company went public in 2002. Stack said.
“We don’t feel we’ve found the bottom yet in the golf sales number.”
TaylorMade, a golf equipment maker owned by Adidas (ADS:GR), reported a 34 percent drop in sales in the first quarter 2014. And Callaway Golf (ELY), maker of the Big Bertha driver, delivered its own dim forecast in April 2014, warning that full-year profit could come in at the low end of its previous estimate. CEO Chip Brewer told investors.
“We anticipate a heavy promotional environment while the industry works through excess inventory.”
Callaway hasn’t reported an annual profit since 2008.
Industry insiders point to last year’s double bogey by sports retail giant Dick’s that crimped revenue and margins industry-wide. Dick’s, which is reportedly in talks to go private, last summer fired more than 400 PGA professionals at its namesake stores (the sporting goods retailer also owns the Golf Galaxy chain) and slashed prices on golf equipment as there wasn’t enough demand to meet the supply stuffed into the market; lower prices obviously mean less overall revenue.
TaylorMade’s Sharpe is mindful of that oversupply as the company has released new equipment and he prepares for his first spring on the job. Sharpe says the company will be “more deliberate” in its distribution to avoid an inventory glut, “which causes deflation and compromises the launch of the next generation.”
This deflation is training consumers to hold off on new purchases and weighing on equipment sales, says Tom Stine, co-founder of Golf Datatech. Stine says.
“Overall golf sales are down, but that doesn’t mean they’re down because golf is going out of business. Golfers are not going away, they’re more cautious in spending money and trying to get a better deal.”
Economic Impact of Golf
The U.S. golf industry has an estimated direct economic impact of around 70 million U.S. dollars annually. This figure is based on several segments such as golf course capital investment, golf facility operations, golfer supplies, charities and tournaments and associations.
It includes for example around 20 billion U.S. dollars from green fees and consumer purchases of golf equipment to the value of 3.4 billion U.S. dollars. These equipment purchases include items such as golf clubs (woods, irons, hybrids and putters), golf bags and balls. The average price for a set of golf clubs was at 40 U.S. dollars in 2011, golf shoes sold for an average of 66 U.S. dollars at the retail level. The wholesale sales of golf equipment had a value of around 2.5 billion U.S. dollars in 2011.
Among the leading golf equipment companies in the world is Callaway Golf with revenues of 834 million U.S. dollars in 2012. Its drivers, fairway woods and hybrid segment contributed 24 percent to the total revenue. Irons (20%), putters (11%), golf balls (17%) and accessories (28%) are the other reported segments of Callaway Golf. Callaway’s main market is the U.S. where the company generated almost 50 percent of its revenue.
Around 26 million people play golf in the U.S., at least occasionally, at approximately 15,600 golf facilities. Among the leading golf club operating businesses is ClubCorp. The company operates 102 golf and country clubs and 49 business, sports and alumni clubs mostly in the U.S. Overall the company has approximately 145,000 memberships and 350,000 individual members with total revenues of almost 755 million U.S. dollars in 2012.
Consumer spending on golf equipment in the U.S. from 2007 to 2015 (in million U.S. dollars)
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The Generational Shift
Although an especially cold winter and the sluggish economy are no doubt part of golf’s problem, a generational shift is a bigger cause for concern. Jim Koppenhaver, president of Pellucid, says.
"The baby boomers were supposed to be the salvation of golf. We’ve got to find a way to stem the decline in the golfer base.”
Millennials have left golf in droves, but the baby boomers have yet to take up the slack. His company’s research shows the number of golfers today is lower than in 1990, even though the U.S. population is 27 percent greater.
Koppenhaver calls the traditional 18-hole round “an anachronism,” requiring about six hours “door-to-door,” including more than four on the course. Nor does the pastime have the social currency it once held. Explains Gerald Celente, publisher of marketing magazine Trends Journal:
“Everybody’s hooked up to their handhelds, so [today] it’s social networking instead of sports.”
Golf Courses Closing And Golfers Playing Fewer Rounds
Overbuilding in the 1990s led to a surfeit of courses as the growth that operators anticipated never materialized. Only 14 new courses were built in the U.S. in 2013, while almost 160 shut down, the National Golf Foundation reports. Last year marked the eighth straight year that more courses closed than opened.
Those sticking with the sport are playing fewer rounds. U.S. golfers played a total of 462 million rounds last year, according to researcher Golf Datatech. That was the fewest since 1995. Says Morelli:
“All the people under 35 are leaving the game.”
Marketing of Golf Changing
To attract more casual players and expand revenue, particularly among younger people, clubs are rethinking some of the sport’s tenets. The U.S. Golf Association, the PGA of America, and Golf Digest have launched a “Time for Nine” campaign to counter complaints that the traditional 18-hole game takes too much time. And some clubs are adding attractions such as yoga and hovercraft rides.
Then there’s Hack Golf, a movement to identify the parts of golf that aren’t fun and fix them. A standard cup is 4.25 inches in diameter, often making even short putts difficult to sink. Some courses have added wider holes to make the sport faster and easier, with a Golf.com story in April asking, “Could a 15-inch hole be the answer to golf’s growth problem?” TaylorMade in April sponsored a 15-inch cup tournament. The brand also co-sponsors a website with the PGA, hackgolf.org, with the goal of “crowdsourcing the future of golf.” The site has elicited 1,471 ideas. A recent suggestion: smartphone apps to reserve tee times, pay for services, and communicate with the pro shop.
Clubs in more than 30 states, including the PGA Country Club in Port St. Lucie, Fla., are even trying FootGolf, a combination of golf and soccer designed to capitalize on the growing popularity of the latter. The game is played with a regulation No. 5 soccer ball on a course with shortened holes and 21-inch cups. Wearing knee-high argyle socks is recommended.
The professional and marital decline of Tiger Woods, once the public face of golf, hasn’t helped. With neither Woods nor Phil Mickelson playing at the 2014 Masters, only 7.8 percent of U.S. television households tuned in—the tournament’s lowest TV rating since 2004, according to Nielsen. That was a 24 percent decline from the 2013 finale, when Woods and Mickelson played and 10.2 percent watched.
Courtesy of an article in the August 2015 issue of Men's Journal, an article dated June 19, 2014 appearing in Bloomberg Business, an article dated January 22, 2015 appearing in Fox Business, and an article titled, "The Economic Impact of Golf" appearing Statista