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Golf Scores New Interest

By Mark Seavy

While there are signs the golf boom driven by the pandemic is easing, the sport is expected to retain a large slice of that new interest.

There are several contributing factors, including the headline-making rivalry between the Saudi Investment Fund-backed LIV tour and the PGA tour, which recently received a $3-billion cash infusion from the Strategic Sports Group that will make it a for-profit business under PGA Tour Enterprises.

And Tiger Woods, arguably the most famous professional golfer of all time, recently announced his departure from long-time sponsor Nike and his new partnership with equipment maker TaylorMade. The deal will move TaylorMade into apparel for the first time with the launch of the Woods’ Sun Day Red brand in May.

This recent buzz around the sport is anything but par for the course because now, there are a number of new paths for players to enter the sport.

More than 26.6 million Americans played on a golf course in 2023, according to the National Golf Foundation (an increase of one million from the previous year). That participation is expected to grow, with the number of rounds played in the U.S. forecasted to increase 4% in 2024. But, thanks to the growing number of golf-focused experiences, the sport is no longer limited to traditional courses.

Off-course, mini-golf chains like Puttshack—which has gained financial backing from BlackRock—are gaining interest. Social media influencer Roger Steele partnered with equipment supplier Callaway for his “Range Talk” YouTube series, which is focused on bringing new players to the sport. And, in 2023, 32.9 million consumers participated at off-course entertainment venues like TopGolf (up 18% from 2022 and up 41% from 2019).

Consumer engagement with these entertainment venues is providing a springboard for taking up the game. The value of Topgolf, which has 100 venues and counting, was underscored when Callaway purchased the business and renamed itself Topgolf Callaway Brands, according to industry executives.

About 66% of on-course beginners are arriving from an off-course experience (compared to less than 40% a year ago), according to Topgolf Callaway CEO Chip Brewer. Callaway’s goal is to have 200,000 new users come into the sport through Topgolf. The golf equipment supplier is installing digital kiosks and expects to have 30 million “unique” players pass through Topgolf locations this year, Brewer said. Callaway will have equipment designed for beginners at Topgolf locations by year-end.

“Golf is clearly benefiting from a large influx of participants, more flexible work environments, and a positive change in the perception of the game, especially with teens and young adults,” said Brewer.

Retaining this interest and consistently bringing in new players will have its challenges, however. Some equipment suppliers have formed “active lifestyle” divisions to target golf apparel and related products for younger consumers and women.

Callaway’s Travis Mathew brand, which it purchased in 2017, recently expanded into women’s apparel and is planning to open up to 10 stores this year. Revenue from the division increased 3% in 2023, driven in part by a direct-to-consumer business. Overall, Callaway is forecasting a 6% increase in revenue this year, despite also seeing potential for a “softer consumer environment,” CFO Brian Lynch said.

For its part, equipment supplier Acushnet Holdings, which hasn’t released Q4 2023 earnings yet, is projecting a 5-7% increase in revenue for 2023 to reach $2.3-$2.4 billion, Acushnet CFO Sean Sullivan said.

“There is always concern that the golf boom will ease, but this time around the off-course venues—which are as much about entertainment as golf—will help retain and deliver new players, something that wasn’t the case in the past,” a licensing executive said.

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