Column: Post Tiger Woods era, golf industry is on the decline
A decade ago, when Tiger Woods was the best player in the world, golf looked like a growth industry. Player participation and number of rounds played were increasing, new manufacturers were entering the field and corporate sponsors were clamoring over each other to jump on the bandwagon. But fast forward to today and hardly anyone would recognize the sport.
Golf participation has steadily declined. Corporate investment in the game has shrunk substantially. A number of golf manufacturers have exited the marketplace, the latest being Nike. The world’s largest sports apparel company, with over $30 billion in annual sales, announced earlier this month that it would no longer manufacture golf clubs, balls and bags. However, Nike will continue selling golf footwear and apparel.
While Nike’s announcement wasn’t shocking, it spoke volumes about the health, or lack thereof, of the golf industry. Like a number of businesses, the golf marketplace has never fully recovered from the economic downturn of 2008. Nike Golf finished fiscal 2016 with its lowest revenue in five years. Perhaps more impactful to Nike, its prime golf endorsers have struggled of late, none more so than the player it built its golf business around, Tiger Woods. After re-signing with Nike in 2013, Tiger has been on a downward spiral that saw him miss the cut in three of the four majors last year. Tiger hasn’t played in a PGA tournament since August of last year and it’s unknown when – or if - he will return to the tour.
Twenty years ago Woods initiated the greatest period of growth in the sport since the 1960’s heyday of Arnold Palmer and Jack Nicklaus. Tiger was both good – he has won 14 majors, second only to Nicklaus’ 18 - and charismatic. His appeal bridged generational, cultural and economic divides and many companies took advantage of the marketing opportunities he created. But Tiger hasn’t won a major since the 2008 U.S. Open and his home life – and value as an ambassador for the sport – disintegrated a year later when his sexual escapades became public.
The National Golf Foundation (NGF), whose website touts that its purpose is to “help golf businesses succeed since 1936,” claims “there are reasons to be confident about the stability of the game.” That optimism is in stark contrast to the facts. The NGF annually tracks the number of golf participants which, according to their research, has shown a steady decline since 2011. Nevertheless, the NGF puts a happy face on last years’ report, which recorded “a slight dip” in participation numbers between 2014 and 2015. The organization claims the “numbers remained strong in several crucial areas: among committed golfers, beginning golfers and the number of people interested in taking up the game.”
Not everyone is as optimistic. The Men’s Journal published an article last year brazenly titled “The Death of Golf.” The article pointed out that according to the NGF’s own numbers, golf participation is off from a high of 30.6 million golfers in 2003 to 24.1 million in 2015. That overall 21 percent decline was dwarfed by the 30 percent reduction in the number of golfers 18-34 – the future of the industry – over the past two decades. Other metrics – TV ratings, rounds played, equipment sales, courses constructed – also showed substantial drop-offs. The only golf-related number that continues to increase is the number of golf course closures. The NGF figures show that approximately every two days a golf course closes in the U.S., while only 11 opened in 2014. Those numbers are hardly indicative of a healthy industry.
Golf’s decline has been blamed on Tiger, the economy, and the sport itself – old, white, difficult, slow and expensive. All may have played a part. The biggest unknown is whether anything can be done to reverse the trend. A number of initiatives have been undertaken, among them a proposal to reduce the time it takes to play a round, shortening the length of courses, reducing costs, and incorporating more technology in golf equipment.
Whether any of those efforts prove successful remains to be seen. The boom in the golf industry began with Tiger and the downturn coincided with his slide in performance. Perhaps a second coming of Tiger will reinvigorate the game. Or perhaps golf has seen its heyday and will become a niche sport.
Kobritz is a former attorney, CPA, Minor League Baseball team owner and current investor in MiLB teams. He is a Professor in and Chair of the Sport Management Department at SUNY Cortland and maintains the blog: http://sportsbeyondthelines.com The opinions contained in this column are the author’s. Jordan can be reached at firstname.lastname@example.org.