Golfsmith Is Considering Filing for Bankruptcy [Bloomberg]

[pganapathy]

Couple of reasons.

• Golf courses are becoming longer thanks to equipment and what was once a 3 hour round is now a 5 hour round.  Time is an issue.
• Golf equipment has become ridiculously expensive.  A single driver costs 4 to 5 hundred dollars.  Economics dictates that people will find better value items to purchase or sports to play.
• Over expansion of people investing crazy money into the latest fad.  Golf underwent something similar to the dot com boom in the late 90's which then saw a crash and correction.
• Internet sales hurting brick and mortar sales.
• With land becoming more valuable thanks to the growing population, golf courses are charging more per round to recover their costs.  This is driving people away.
• People are not as outdoorsy as they were before.  Too many people live indoors thanks to the advent of computers.  Exercise has become a gym for most people rather than playing a sport.
• Golf is a much harder sport to take up as opposed to say football or basketball.  You need specialized equipment which is expensive and you need a lot of space to play.  It is not something you can do casually in your back yard or at the park.

[CarlSpackler]

I've said it before, the golf industry is in big trouble, and I don't think Tiger's absence is the cause. There are still a ton of golf fans out there. I see hoards of folks still attending PGA tour events. People just don't have the money they used to. I certainly don't. Perhaps if my "tax cut for the wealthy" came back, I could afford more stuff. In the meantime, my budget dollars will be spend on green fees.

[Spitfisher]

18 minutes ago, CarlSpackler said:

I've said it before, the golf industry is in big trouble, and I don't think Tiger's absence is the cause. There are still a ton of golf fans out there. I see hoards of folks still attending PGA tour events. People just don't have the money they used to. I certainly don't. Perhaps if my "tax cut for the wealthy" came back, I could afford more stuff. In the meantime, my budget dollars will be spend on green fees.

I'm a big ice hockey fan, I live in the northeast, I love watching hockey even if its not my team playing.

I have no desire to skate or to own skates.

This was Tigers contribution to golf, people watch it, but have no interest in playing it.  If your are reading this you are indeed the exception, but the reality is the growth of golf is in front of a TV set on sunday afternoon. The number of golfers when Tiger started wining (1999-2000) krept up a small amount, but has been slowly but surely sliding downward. I'm not insinuating its Tigers fault but those arm chair quarter backs that think he grew the game are mistaken, he grew NBC, CBS and the PGA.

The numbers don't lie

Nike getting out of the golf business with only a 2-3% market share over 17 years is another perfect example.

Edited August 5, 2016 by Spitfisher

[mcanadiens]

13 minutes ago, Spitfisher said:

I have no desire to skate or to own skates.

If I weren't such a broken down old fart, I'd still be playing hockey. I sucked at it worse than I currently suck at golf, but it was awesome.

Other than that, I understand and agree with your point.

[CarlSpackler]

42 minutes ago, Spitfisher said:

I'm a big ice hockey fan, I live in the northeast, I love watching hockey even if its not my team playing.

I have no desire to skate or to own skates.

This was Tigers contribution to golf, people watch it, but have no interest in playing it.  If your are reading this you are indeed the exception, but the reality is the growth of golf is in front of a TV set on sunday afternoon. The number of golfers when Tiger started wining (1999-2000) krept up a small amount, but has been slowly but surely sliding downward. I'm not insinuating its Tigers fault but those arm chair quarter backs that think he grew the game are mistaken, he grew NBC, CBS and the PGA.

The numbers don't lie

Nike getting out of the golf business with only a 2-3% market share over 17 years is another perfect example.

I would say that golf is much more accessible than hockey, so I believe that most people that go to PGA tour events are at least somewhat interested in playing. It's just my opinion for what it's worth.

[TourSpoon]

Golf's decline, specifically in private equity clubs in the South is due to the graying of America. During the 90s, people were dying to get into a club, now they are just dying with no real generation to carry the torch. In the public domain, seniors fill the M-F times, while working people carry on as the weekend warriors. 

Tiger's influence of the casual golfer had a bump, but didn't replace those aging out of the game. 

Economy has some to do with it, although golf is way cheaper than owning a boat. Although gas is 2.25 a gallon, new Pro Vs are $5 a piece. That's ridiculous. Especially when you see how much they spend on marketing. 

Anyway, I like cheaper golf. But I don't want it to become so unprofitable that we see more courses closing. The equipment is one thing that will correct itself, but closing a course is real death to us that want to play. 

[JxQx]

I think one aspect of the money/time factor isn't the actual playing golf it's the ease access to it. Now a days both parents are typically working/working longer hours so unless you are 16/17 and have a license and a car it's hard to get to the course to play. Also with having less time it'll be harder to get kids into liking golf because it does have a pretty decent learning curve. That isn't the case in other sports where you can play in the driveway or yard at any time and are pretty natural to pick up.  So it's not too big of a surprise to see the decline in golf or these companies closing given the equipment market saturation as well as online stores vs actual shops. 

Edited August 5, 2016 by JxQx

[70sSanO]

Another aspect has been the death of the par 3 munis.  That is where the love of golf happens as kids.

Way before Tiger... kids, including myself, could go to a pitch and putt and smack the ball around.  With old clubs it was pretty cheap.  And if you happened to hit a few good shots, you came back for more.

John

[imsys0042]

7 minutes ago, 70sSanO said:

Another aspect has been the death of the par 3 munis.  That is where the love of golf happens as kids.

Way before Tiger... kids, including myself, could go to a pitch and putt and smack the ball around.  With old clubs it was pretty cheap.  And if you happened to hit a few good shots, you came back for more.

John

There is a course by where I live that has a nine hole short course, as well as a pitch and putt somewhere near that.   They are from years and years ago, I don't know of anywhere I've had exposure to that has built one in 30 years.   Great places to grow the game, but probably an expensive upfront cost and the closer to an urban area, the land cost is prohibitive.   

Here in Western PA where land is cheap, it would be nice to see a couple of more of these.   More fun that taking someone out on a course where they might be overwhelmed, especially at a young age.

[Wadess]

The change in family dynamics is a major contributor that I think is often overlooked.  With both spouses working and sharing kid duties, it is hard to fit in a round anywhere but the weekend.

[iacas]

I think we're just in the opposite of a bubble right now, of sorts.

I think the PGA and other groups were a little too late with the "grow the game" stuff because they were enjoying boom years and courses couldn't be built fast enough. We're seeing a reversion to the mean, but they did start those programs, and I'm seeing lots of kids playing in junior camps and doing things like Drive, Chip, and Putt and stuff.

Yes, attention spans are shorter, but when I was a kid I had to work to get into golf, kind of on my own, and now there are tons of opportunities for children to get into golf. Maybe 30% fewer of them "stick" with it, but if you have 60% more programs… that's a net win.

P.S. I think Tiger brought few actual golfers to the game, btw. More spectators.

[cutchemist42]

My limited time involved with golf gives me the impression he created more viewers than golfers.

Golf's problem is ts just too expensive. Can think of only a couple of sports that are more expensive and carry a bigger "white upper class" stigma. The sport doesnt do enough to create new golfers from my experience in Winnipeg. Its basically being born into it or starting when you're an adult, have money, and curiosity which is my case. There is ZERO exposure to it in schools which is why I grew up playing baseball vs golf despite my current set of clubs being abandoned in my dads basement since 1991.

[70sSanO]

I really think there is an opportunity for the top club manufacturers to market their older models under a different name and sell them through the big box sporting goods stores at lower prices.

When Callaway owned Top Flite, they could have offered their older X and Bertha clubs as Top Flite in a boxed set to get newer golfers into the sport for less of an investment but still have a quality set.  Since their sunk cost was already covered with the initial sales, it would just be a matter of re-badging them.  Opportunity lost?

No way should any manufacturer go the Wilson route and destroy their primary marquee.

John

[JetFan1983]

3 hours ago, iacas said:

P.S. I think Tiger brought few actual golfers to the game, btw. More spectators.

Yea, if I recall correctly, it was the TV ratings that were the first domino to fall, then it sort of snow balled from there due to the other factors we've all been discussing. Tiger sparked a boom and then sustained it, but the market corrections we're seeing now were almost an inevitability at some point. 

[natureboy]

18 hours ago, WUTiger said:

A few years ago, Arnold Palmer attributed this course building boom to outsiders who didn't really care about the game of golf, other than as a way to $$.

I live in St. Clair Co., IL, just across from St. Louis. We have five semi-private housing development golf clubs in our zone. One got started about 1990, the others in the late 1990s. (One went bankrupt two years ago.) Four of the five survivors still have a number of housing lots to sell.

The developers thought that all of them would become Winged Foot - West, and that after they sold out the lots they would make it an exclusive private-equity club. Only one came close, and the survivors rely on a broad mix of players to stay afloat as semi-privates.

At my home course, a lot of second owners of the homes aren't even golfers.

That's interesting and Arnie may have had a good insight.

It's likely that a lot of these developments marketed the golf course' as 'greenspace', which many surveys indicated buyers wanted as quality of life feature with a home. Also 'dedicated greenspace' (often sensitive / undevelopable land) became a possible tax write-off while the course itself was a potential income source - at least on paper. Some unscrupulous developers really pushed it and claimed the course itself as 'dedicated greenspace' even though it doesn't fit the definition.

This type of development may have been perceived as a 'can't lose' investment to sell the expected 'profitability' to potential investors as well as attract buyers who wanted value at low cost and low HOA fees. There was also a lot of assumption about Baby Boomers taking up golf in retirement, but with the bubble burst many have gone back to work and others have opted for travel rather than golf as their luxury investment. Might be they're not old enough to take up golf in large numbers yet? Also, what developers considered 'greenspace' and what the typical baby boomer did were not likely the same.

Edited August 5, 2016 by natureboy

[Pendragon]

22 hours ago, stealthhwk said:

I think Tiger and his fans probably fuel that far more than actual facts. Golf is in decline because; 1) the game is too difficult and has conflicting instruction. 2) People play golf far too slowly and no one has time or patience for a five hour round of golf on a tuesday afternoon. 3) Golf is too exepensive. 4) golf companies  released so much so fast that eventually the consumer said Ive had enough and stopped purchasing new gear.

I agree with you. I question how many people Tiger really brought into the game. There's no doubt that golf viewership on TV benefits when Tiger is in the field, but many of TW's fans don't play the game. They were attracted by Tiger the superstar, not by the game itself. As you point out, what it costs to play and how long it takes to play are more pertinent issues.

[natureboy]

18 hours ago, Hardspoon said:

I hadn't seen this stat. That's the big problem with any of this "analysis" - there are fifteen ways of looking at the numbers, and you can reasonably conclude that golf is growing in popularity as easily as you can that it is in decline.

Well, the overall participation numbers are down, but what I was sharing is that 'serious' golfers with HCP's seems to have rebounded a bit.

Casual participation is still well down. Even at one round per year, loss of 6 million golfers is a significant financial hit. But the drop was related to the financial crisis, not Tiger's scandal.

Edited August 5, 2016 by natureboy

[Kalnoky]

Lots of great ideas in this thread.

Real estate developers are eyeing surplus golf courses. A lot of owners are now at retirement age and being tempted to sell. This is not going to affect the venerable old private clubs, but it does affect the cheap courses where beginners like me play.

That is what Tiger did; he made the game accessible to everyone. There was a space for the rest of us outsiders who did not grow up playing, to learn the game. In this sense he was the Arnold Palmer of the 1990's and 2000's. Nobody has come along to replace him.

 

 

Edited August 5, 2016 by Kalnoky