Why America fell out of love with golf - [Washington Post]

I think that TaylorMade's results are not a good indicator though.  A lot of people believe that they were selling too many product lines and their marketing/sales cycles were too short.   That's not the same as someone with a longer product cycle whose earnings nose-dive.  And that's the problem with how business news can be reported.   You can say "sales are way down from 1 year ago", but that doesn't give context into why.

Titleist which has a 2 year product cycle would have very different numbers than TaylorMade who does multiple product lines in a  year.

This might be a good analogy.

TaylorMade is like a 300 pound man who lost 50 pounds, and states he is skinny.   A lot of people soured on their marketing hype and aren't convinced to upgrade every 1-2 years.   They also built up massive inventory with people they sold to, and that was a long time coming.

Golf is in a bit of a downturn, but TaylorMade's statement there is overlooking the fact that they had an unsustainable business model.

I don't know, I wouldn't look at new gear sales as a solid indicator of the game, the market is flooded with great used gear, barely used gear, I'm in the market for a few new clubs, but I won't be buying new, and the TM problems are quite clear.

Tennis is also at an all time low, it's cyclical, it takes a special player to get the masses back into it and neither game has that right now.

Well I don't doubt that golf is becoming less popular, but right now, around here, just try getting a tee time at one of the many decent courses.  It is crowded this time of year and expensive.

As to equipment sales, I don't often purchase a new set of irons, maybe every 5-6 years and I always look at the used clubs first.  Same for driver, putter, hybrids, and fairway woods.  Maybe if I was a scratch golfer I would become a believer in new equipment will help.  At my performance level however I think it is about the archer not the bow and don't see any $500 dollar clubs in my near term future   I belong to a private CC and see folks with 2 digit handicaps who purchase new equipment at least once a year.  I just chalk it up to more $ than good sense because I don't see their handicaps improve.

I do try to further the game and have introduced my grandchildren and friends to it and hope it will stick.  But for me the game is about doing something I enjoy doing and trying to do it as well as I can.  But I spend my $ on lessons and playing as I do believe significant improvement comes from the golfer improving and only minimal improvement will come from equipment change.  Just to be clear I don't advocate return to wooden woods or "wound balls", but surely do not believe that purchasing the "latest and greatest" equipment every year will result in some significant reduction in your handicap.

The golf course closings are a result in part of what Arnold Palmer called people who "didn't love golf"  coming into the industry to make quick buck. In the 1990s, a lot of real estate developers decided to build residential golf communities. This created an over-capacity of upscale golf courses and fancy housing.

In my area, the original one was The Orchards in the late 1980s. In the 1990s, four more followed in a 25-miles radius. Three of these five have quality golf courses, the other two are struggling. (One course needs to bring in the lumberjacks and fell about 500 trees - that way, sun would shine onto the fairways and grow some grass.)

But, all five have a common problem: On average, each development sold about half its building lots. Lots of nice homes, but plenty of open grassy acreage in between. The developers overestimated how many families wanted a $300K home along the fairway. Throw in the recession, and demand is falling. (Two of the courses have several homes each in foreclosure, with resales being handled quietly by the realtors.)

A sixth community - Olde Lantern Golf Club - saw early homebuilding but never broke ground on the golf course. The Lantern team faced years of lawsuits from the dozen or so families that build early before the lights went out.

All five completed courses are in the semi-private category now, and have tight revenues in the era of dynamic pricing - variably discounted greens fees as too many courses chase too few golfers.

Government-run and public courses are struggling also. Some get subdivided, others get sold for $1 to someone willing to take over the debt the property has racked up.

So, prior course overbuilding is a contributing factor to course closings. Using industry analysis, these developers created golf course over-capacity in most US states.

(Family-run or city-run 9-hole courses also figure in the closings. It's a combination of the kids not wanting to take over a tough business, and developers offering big $$ for city-edge open land.)

Edit: Added Olde Lantern info.

Only $300K?  Here I think it takes at least $500K to get on a golf course.  One of the mountain courses that I like to play in the summer is bordered by summer homes, some of which have to be multi million dollar estates.  And I'm not talking Aspen or Telluride... this is an area called Pole Creek in Grand County.  Next summer I'll try and get some photos - I look at these places and my jaw drops.  Then just up the road is another attempt at a golf/ski summer/winter home development, and while there are several homes built there, they have clearly not sold as well as they anticipated, and the location is not nearly as scenic, and the homes are very average for a winter/summer ski/golf residential development.  Yet I know that those places still have to be pushing $1M.  Both golf courses are open to the public as resort style courses, both are fun to play, and both can be played for a fairly reasonable price through a couple of avenues.  I've only played these courses on weekdays, and never seen them particularly crowded.  I don't know if that changes on the weekend or not.

As far as the game's trend, actual play on public courses is up a bit in Colorado.  18 hole play was up 3.6% in 2014, and revenue was up 1.9%.  29 states reported upturns in play in 2014.

So it's not all gloom and doom.  TaylorMade seems to have made a messy bed, and now they are struggling to sleep in it.

Well said. Some of the marks finally figured out that PT Taylormade's promise of adding more and more yardage by buying a new driver every six months was the Piltdown Man of marketing.

There is also a big difference between the heath of the golf business and the health of the game.

While TaylorMade is struggling, other vendors, like Callaway, are making a strong comeback (and no doubt to TaylorMade's detriment).

I just attended a workshop with 35 or so representatives from the American Junior Golf Association.  They said to a person that junior golf is not only strong, but growing.

While it is hard to deny that golf is in decline there is a little perspective required here. TaylorMade has not done much to move the needle in the past 3 years equipment wise. The last real innovation they offered was white. I think the white was a brilliant marketing campaign because you could tell people who had them and they were something different. Since that time they have moved away from the white, which is fine because companies need to continue to evolve, but they have offered relatively nothing new since that time. The SLDR is not new and frankly didn't work all that well, and this "loft up" campaign might as well be called "who cares" because nobody really understands it or believes that it helps.

Adidas is no better. I cannot remember the last time I saw something on a rack from adidas that I remotely liked. Nike is trying with the whole yellow strategy and I can admit that a few times it has caught my eye, but adidas hasn't done anything to catch my fancy in a long long time.

So the decline of golf is undeniable, but TaylorMade and adidas might very well have been down in an up market because they are not doing anything product wise to move the needle.

The $300K was the anchor price back in the mid-1990s. And now, between recession and foreclosures, it's sub-$300K now.

Also, you have stratification among the housing offerings. At one course, the rolling hills on the back nine hold the $350K and up single-family homes. In another node, it's $270K duplexes. (These duplexes would be nice for a couple with the kids out of the house, as long as the people across the wall are civilized.)