Golf equipment "free agents" - WSJ

[nevets88]

More players choosing to not endorse club manufacturers and pick whatever they want - I dunno if it's more Nike penalizing players for endorsing other brands rather than players just going out on their own.

Quote

According to people with knowledge of the agreements, Nike continues to pay players the full value to wear its apparel. But if they sign another equipment deal, Nike’s financial obligation to them is significantly reduced. That diminishes the incentive for them to commit to one manufacturer.

But I totally see McIlroy's pov, having recently switched iron sets.

Quote

“There’s too much out there,” McIlroy said. “I literally had 25 boxes of golf clubs in front of me. Where do you go from there?”

https://www.wsj.com/articles/the-year-of-the-golf-free-agent-is-here-1533729205

[colin007]

Wait, so Nike is penalizing players for using brand new equipment instead of their stuff even tho it's practically obsolete now?

[jamo]

4 hours ago, colin007 said:

Wait, so Nike is penalizing players for using brand new equipment instead of their stuff even tho it's practically obsolete now?

I'm not a WSJ subscriber so I can't read the article, but I think the idea is they can't sign with another company. They could still play someone else's clubs for free. 

[weekend hacker1]

Obsolete? Hardly. That's the sort of thing you see on Golf Digest: that clubs over a few years old are no use. Nonsense.

[Chris223]

I still see Fleetwood with a Nike club or two in his bag

[iacas]

8 hours ago, colin007 said:

Wait, so Nike is penalizing players for using brand new equipment instead of their stuff even tho it's practically obsolete now?

I read it as penalizing them only if they sign a deal with another company, because then that other company is allowed to use their name, likeness/image, etc. in addition to Nike.

[nevets88]

Here's some more from the piece. I tried to pick the most relevant part this forum would be interested in. 

Quote

The math has also changed. Purse money continues to hit record highs each year, extending a boom that dates to the debut of Tiger Woods and survived his absence in recent years. At the same time, the market for equipment deals has cooled.

Agents and officials from the manufacturers say that a handful of star players—think Tiger Woods, Rory McIlroy and Dustin Johnson —still earn several million dollars annually on such deals. But the offers for most other players have dropped substantially. A midlevel Tour player who made $500,000 a decade ago might make $250,000 now.

“The market has changed dramatically,” said Dan Ladd, senior vice president of sales and marketing for Cobra Puma. The company, which used to sponsor several PGA Tour players, now sponsors only two: Rickie Fowler and Bryson DeChambeau. Likewise, a spokesman for TaylorMade said it has reduced the number of players it endorses but declined to share specifics.

“It’s a challenge for these athletes,” Ladd said. “The ones that do it are phenomenal but there seems to be fewer today that can truly cut through and be an ambassador that moves the needle for a brand.”

Of all the equipment companies, though, the one that had the biggest impact on the market is the one that got out of it two years ago: Nike. Its exit not only impacted the more than 40 players it had on staff. It softened the market for everyone else. And it left players with more years remaining on their Nike deals—McIlroy, Koepka and Molinari among them—in an unusual spot.

 

 

[Buckeyebowman]

That right there is why the clubs you want to buy cost so much money! It sucks the profit out of quite a few sets of irons, or individual woods, to pay a pro a quarter of a million dollars let alone a half a mill! Multiply that by several pros, and you can see the problem.

It's the same reason the Nike "Jordan" Bball shoes cost so much. It's not because they're so good, it's because they have to pay Mike! I figure he has enough of his own money, he doesn't need any of mine!

That's why I stopped buying new golf equipment years ago. That being said, I have bought "unused" equipment that was a couple of years older than it's release date.

[boogielicious]

10 hours ago, nevets88 said:

Here's some more from the piece. I tried to pick the most relevant part this forum would be interested in. 

 

I noticed on the Mizuno site they only show Luke Donald as a featured player now. They used to have a bunch. 

[iacas]

While equipment deals can sometimes make sense, NOT being tied to an equipment deal can also make sense, too. And it's not like the guys are struggling to get equipment, or work done on their stuff, etc. Any company will do what they can for a PGA Tour player, relative to their level of success (they're not going to fly across the country to spend a few days fitting a no-name guy for a set of wedges).

[Hardspoon]

19 hours ago, Buckeyebowman said:

That right there is why the clubs you want to buy cost so much money! It sucks the profit out of quite a few sets of irons, or individual woods, to pay a pro a quarter of a million dollars let alone a half a mill! Multiply that by several pros, and you can see the problem.

It's the same reason the Nike "Jordan" Bball shoes cost so much. It's not because they're so good, it's because they have to pay Mike! I figure he has enough of his own money, he doesn't need any of mine!

Sponsorship money has very little to do with the cost of clubs. They are priced to maximize revenue; nothing more, nothing less.

The sponsorship money is just a part of each manufacturer’s marketing budget, which is set independently of club prices.

Besides - golf equipment sales are over $1 billion a year, so even $10m in sponsorships is less than 1% of total sales. 

[Buckeyebowman]

Yes, and where is a chunk of that revenue going?

You can't be serious! Club prices support the marketing budget, as well as the R&D budget, as well as the production budget. And, most importantly, it supports profits! It's all tied together.

I assume you mean $1 billion among all club companies. I doubt sincerely that their combined sponsorships come to as little as $10 mill!

[iacas]

12 minutes ago, Buckeyebowman said:

Yes, and where is a chunk of that revenue going?

Marketing that loses you money isn't effective marketing, so… they wouldn't spend the money if it didn't actually result in them making MORE money.

In other words, you can pretty easily make the case that by selling more volume (due partly to advertising/marketing), they can charge less for their equipment.

[jmanbooyaa]

Who is changing  equipment or clothing sponsor in 2019?

[NM Golf]

Good article on this same topic.

Ryan Palmer: Equipment contracts are not worth the money

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Outside of Tiger Woods' incredible comeback season, the biggest story in the golf world was the rise of the equipment free agent. Some players choose to sign new equipment contracts while others, like Ryan Palmer...

I suppose if you are Tiger or Phil it makes sense as you are making HUGE money playing a certain brand. For the rest of them it makes sense to play whats best for you. Interestingly, the players named in the article (Koepka, Molinari and Fleetwood) all play Titleist golf balls. I would love to see the ball count for players without equipment contracts. 

[CaseyD]

On 8/11/2018 at 2:30 PM, Chris223 said:

I still see Fleetwood with a Nike club or two in his bag

Unless something changed he still does sport the nike irons. There was actually a pretty fun exchange between fleetwood and casey. PC had a set of Nike irons still in plastic and fleetwood was freaking out because his last set was wearing out. Fleetwood said PC wouldn’t give in and let him purchase the set, PC responded by saying fleetwood just hadn’t offered enough money yet. 

[mz975d]

2 hours ago, CaseyD said:

Unless something changed he still does sport the nike irons. There was actually a pretty fun exchange between fleetwood and casey. PC had a set of Nike irons still in plastic and fleetwood was freaking out because his last set was wearing out. Fleetwood said PC wouldn’t give in and let him purchase the set, PC responded by saying fleetwood just hadn’t offered enough money yet. 

yes... i was going to say that same thing 

[jmanbooyaa]

On 10/26/2018 at 7:14 PM, jmanbooyaa said:

Who is changing  equipment or clothing sponsor in 2019?

Is there a forum for this?