Is There Anybody Out There?: What Other Golf Bloggers Are Talking About

This week I spent some time wandering through the blogoshere to find others committed to following the latest in golf problems and solutions. I would have to say that I did not feel to great about the sport after reading Chris Henry’s piece, “The Screws Tighten” at Eagle Par Birdie. His entry directed me to an article that shows starkly different data on green fee prices and number of rounds played on which I had previously reported, and paints a very gloomy picture. I am interested to find out what Mr. Henry thinks the industry will have to do in order to adapt to the slumping economy. Maybe I can get his opinion on the next piece, too. In Deeds & Weeds, a blog on Golf Digest’s website focused on Real Estate and Finance, Geoff Russell took a more narrow focus in detailing two cases in which country clubs are offering rounds to the public in hopes of increasing revenues. In “Ohio Club Allows Public Play: A Sign of the Times?” Mr. Russell may have found an opportunity for other struggling country clubs in America. The piece is very interesting and brings to my attention a new strategy for private clubs. I enjoyed both posts and left comments for the authors, which you can view below.

“The Screws Tighten”
Comment

I, too, am deeply troubled by the challenges the game of golf must face in 2009, so much so that I created a blog last month to explore the subject. This is a topic I want to find more about, and I appreciate your post and link to the article on Golf.com. It seems apparent now that the industry over invested in Tiger’s success and began opening courses at a rate the market could not support. I agree with you that the data looks gloomy, but if you get the chance, check out the January 2009 PGA PerformanceTrack data (I linked to it on my blog). The study compares 2008 data to 2007, and actually states that green fees went up last year. It sure is different from what the NGF is saying. I was rather surprised when I saw their data last week, it seemed too good to be true. They report that rounds played were down only 0.8% last year compared to 2007, and most of that looks attributable to poorer weather.

Anyways, what do you think course managers will have to do to keep people on the course? I came across another entry this week (also linked on my blog) that talks about a private course in Ohio that will allow public golfers to play on weekdays after noon and weekends after 2 p.m. You mentioned that golf courses are going to have to get creative, do you think this will work? I guess time will tell. I take comfort in knowing that at least this week, fans across America will actually watch the game, though. Thank God Tiger Woods is back.

“Ohio Club Allows Public Play: Sign of the Times?
Comment

Thank you for bringing this article to my attention. I have been exploring the game as it meets the challenges brought on by the lagging economy on my own blog since the beginning of the year. I believe this strategy may very well be one that other private clubs adopt in the coming quarters. From what I have read, there are a lot of club members that are seeking to sell their memberships, and even others losing their equity stakes because they can not make their monthly payments. Wildwood’s members must have been facing the same dilemma when they agreed to this policy. I am interested to find out if you agree with the move, do you think it will work? I can imagine some of the members are going to be really upset come April 1 when they have to share their beloved course with the public.

It is going to be an immensely challenging year for the sport, and I’m looking forward to reading more that you and Mr. Finch have to say about golf real estate and finance. As you have shown in this post, course mangers are going to have to be creative in order to stay alive. I do not believe, however, that the line between public and private golf courses should be so blurred. Wildwood’s managers have probably already tried other options, like lowering initial membership fees to attract new golfers or lowering annual fees to keep their current members. I hope, for their sake, that the strategy works. However, I think that as soon as the economy moves in the right directions, they should stop this policy and work on making their members appreciate again what it means to be a in a club. And, to be perfectly candid, I’ve never been in one.

Golf vs. Recession: An Unlikely Leader

One would think that golf, like most discretionary income-based activities, is struggling to maintain its financial status in a downtrodden economy. One would think, right? Though decreased consumer spending has (somewhat) hurt the retail side of the game, the overall impact has been less significant than many, including myself, expected.

Before this discussion makes any sense, I must first define what factors contribute to making a fair assessment of the status of the sport. The golf industry, by revenue drivers, consists of green fees, equipment sales, instruction, membership fees, and on-course food and beverage. An assessment of this industry will yield a fair evaluation of how golf courses and country clubs are performing in our economy, but I believe more factors matter. What about the professional tours? Television viewership of the major tournaments gives us a key indicator of the game’s popularity. Furthermore, statistics such as total number of rounds played, total number of participants, and average green fee measure popularity and industry revenue growth. And what about the foundations, like the USGA, that exist solely to building the game, and corporate sponsors that make the regional professional tournaments possible? Each of these aspects of the sport contributes to the game of golf; and each has fared differently through our country’s financial troubles.

Surprisingly, through 2008, total revenues to golf courses and country clubs have only dropped 0.7% compared to 2007 revenues. When compared to other consumer spending based businesses, like travel, retail, and lodging, of which many have seen revenues decline 5% or more, the golf industry is getting along just fine. Furthermore, based on the data compiled by PerformanceTrack (click on Jan 2009 report), last year’s total number or rounds played only dropped 0.8% compare to 2007. If you compare that with the decrease in number of days the courses were open due to playable weather, which went down 0.7%, the number of rounds played in 2008, during a recession, held constant. This report, which only looks at golf fees, merchandise, and food, indicates an increase in total revenues compared to last year. Convincing evidence if you ask me, but we must consider more.

Has the game become less popular to watch as Americans face more and more financial troubles? If one looks to recent TV ratings, one would definitely think the game has a problem. But, we can not make that assessment without a key factor to the game of golf: Tiger Woods. Since June 2008, when he won the US Open in historic fashion (see picture below), Tiger has not played in a single golf tournament. Unfortunately, one can directly correlate TV viewership to whether or not Tiger is playing in the tournament and if he is in contention to win or not. (See graph; Tiger joined Tour in 1997 and won this tournament in 2000, 2002, and 2008). The 2008 PGA Tour Championship, the next major tournament played in America, was watched by 55% less people than the previous year’s event (which Tiger won). Less people watching a tournament does not necessarily man less people playing the game, but it does have implications for corporate sponsors.

Two such sponsors have filled recent headlines. First, Travelers, a large American based insurance company, just renewed their contract to continue hosting the Travelers Championship in Hartford, CT. This news came as a big relief to the PGA Tour, which was uncertain whether a company so closely tied to the financial meltdown would still be able to support the tour, and Hartford economy for that matter. On the other hand, Ginn Resorts announced in January of this year that they are pulling their sponsorship deals with the LPGA Tour’s Ginn Open and the Champions Tour Ginn Championship, which will likely kill the two tournaments. Both companies are facing challenging environments, as the insurance companies were hit by loses in the credit default swap markets and resort hotels, like those operated by Ginn, do not have the same traffic as before. So far, the PGA Tour has yet to lose any sponsors, despite challenging circumstances and lost viewers in the absence of Tiger Woods. Though the loss of sponsors hurts the smaller tours, and in turn the local communities that the events support, the overall impact on the game is less significant.

Did you know that the USGA posts its annual income on the Internet? I didn’t, but it turns out the data (select Financial Summary link) is promising. Last year, their revenues increased by almost 14%, and amount of money received from sponsors increased 113%! So, even though the PGA Tour is uncertain about continuing contracts, the USGA, which operates the US Open and many charitable organizations, should be pleased with their prospects.

Frankly, I’m impressed by how well the revenue side of the game, the side that is so closely tied to consumer spending, has endured this recession. I believe that the game underwent a decline after the Tiger boom of 1997-2002, when the number of total golfers jumped nearly 20% in just a few years. Much like the resurgence of the game after Bobby Jones in the 1920s, and exciting years the 1970s when Arnold Palmer, Jack Nicklaus, and Gary Player duked it out for top billings, the game had to steady itself after Tiger. I will go into the details of this transformation later on the 6º Driver, because it interests me very much, but for now, and by now I mean 2008 compared to 2007, the game of golf remains resilient. The data shows that people are still hitting the links, and I find that comforting. And, with talk of Tiger returning any week (link), TV ratings will go up. Corporate sponsors will be reassured that they can receive large advertising audiences with a healthy Tiger Woods. I know I’ll be watching.

Golf Today: A Blogger’s Search for Golf’s Relevance in 2009

How is golf handling our economic crisis? Are patrons showing up to their local courses? Are architects getting financing for new designs? Are managers winning battles to keep their courses open? These are a sampling of the many questions I will attack in this blog. To begin the process, I have assembled a list of the best resources on the Internet to assist my followers in grasping these challenging concepts. In wanting to find all relevant content, I started by casting a wide net. My initial results came search engines (Google, Metacrawler, Yahoo!) and keywords such as “golf”, “golf business”, and “golf news”. Next, I queried various directories for American associations pertaining to golf in order to narrow my focus and finished by searching for blogs relating to my particular focus. As one can imagine, the web contains a vast amount of information on the subjects. To assist my selection process, I divided my results into four categories (Publications, News, Organizations, and Blogs) and applied the Webby Awards and IMSA criteria for assessing websites and blogs, respectively. In Publications, for instance, I selected the Golf Digest Magazine for its content and overall experience (key Webby Awards criteria) because I already knew how well they cover the sport (I subscribe to their monthly print edition). In this category, I also included the Golf Business Magazine for the sites visual design, functionality, and relevance to my topic of interest. The Golf Business Magazine seems to be very in touch with how the game is being changed by our economic struggles. The News and Organizations categories were much easier to fill, as each website has considerable relevance and traffic to ensure quality of content and ease of use. For example, GOLF.com is powered by CNN and Sports Illustrated. It’s tabs, sections, and subsections enable navigation and are visually appealing. However, the blogs were a harder decision. With hundreds to choose from, I had to strictly apply the IMSA criteria. For instance, the blog that, in my opinion, best met the criteria, Business Golf Blog, was founded by a former attorney that started a company focused on teaching businesspeople how to use the game productively. It has timely posts and, at first glance, is very well written. Others, such as A Walk in the Park, are less relevant, but very well written and incredibly interesting. This list of sources I have compiled will surely evolve as my search for answers deepens.