The business of golf has landed in the rough

EDITOR'S BLOG: Adidas and Nike are getting out after conditions turned sub-par.

by Matthew Gwyther
Last Updated: 25 Aug 2016

I first had my concerns about the potency of golf about a decade ago. After a lengthy editorial discussion it was decided we’d do a cover feature for MT about golf. Having never been a big fan either as a player or observer of the sport, I was slightly sceptical. On the rare occasions I’ve ever been allowed out onto the links and fareways I have always provided rich comedic entertainment for my fellow players as I bring up great divots with a five iron and miss the ball completely if ever I try wielding a wood. I play like Daffy Duck in a Warner Bros cartoon.

But on we went and produced 'BIG SWINGERS: Forget opera - the new corporate Establishment is on the golf course - For off-duty execs, vying obsessively with their rivals for the lowest handicap, it's a serious game.' We listed all the handicaps of FTSE Chairmen and CEOs who fancied themselves piloting a buggy around Wentworth and hinted that golf was the new freemasonry when it came to high level networking.

The edition went down in history as the slowest selling on the newsstand in years. Never again, I thought.

These days, golf is a tough gig, both as a sport and as a business. (Just ask Tiger Woods.) It may have made a triumphant return to the Olympics after a 112 year absence but the market is hugely crowded with gear and courses and its commercial glory days maybe past.

Even giants like Adidas and Nike are coming to similar conclusions. Both are cover-every-base sports generalists and came slightly late to a highly specialised market already occupied by established brands such as Ping and Titleist. Both have announced that they are withdrawing from the market of making clubs but will be sticking with apparel and shoes which are easier and deliver far better margins.

There just aren’t enough customers out there willing to fork out for a Nike Golf vapor Speed Driver in graphite, despite it being available online for half price at £129. In America the number of golf players has dropped from 30 million in 2005 to around 24 million last year. This is bad news for all the equipment manufacturers, as the US accounts for half of all players and courses in the world.
In the UK the number of people playing golf at least once a month has decreased by more than a quarter since 2007 and golf-club membership is down. Even in golf crazy Japan participation is down more than 40% from its high in the early 1990s. Still, the energetic Donald Trump is banging away with his Turnbury folly in the dunes.

Why is this happening? One of the reasons mooted for late middle aged men losing interest in golf is the steep rise in cycling - the Age of the MAMIL (Middle aged man in lycra) has been much discussed. At the younger end of the age scale there are easier hits available for impatient millennials who find golf a bit old fashioned, the preserve of the Pringle-sweater and Jaguar set. At consultants BCG they even think that playing golf video games makes it less likely a participant will take to the grass because it’s so much harder to perform a smooth shoot in real life than it is on a digital device.

The truth is it’s very difficult to get good at golf. It requires skill, patience and lots of time. Just ask Bob Dylan who, I was amazed to hear, is a regular player. The Navy Seal Robert O’Neill - he who finished off Osama bin Laden - then bought a set of clubs to calm his nerves but found it ‘more stressful than combat.’ A round can take four hours. Make it eight if yours truly is involved and spending half the time fishing for his ball in a river with one of those cups on the end of a long stick. I’d buy one of them from Adidas or Nike at the right price.


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