Bridgestone CEO: Tiger More Valuable As An Endorser Than He Is As A Player

Catherine Campo at CNBC summarizes Bridgestone CEO Angel Ilagan's assertion that Tiger "on board" is spurring growth for the game and Bridgestone.

More fascinating is Ilagan's assertion that Tiger is better endorsing than playing.

"He actually has more power as an endorser than he does as a player," the CEO said.

He added that Woods is "the Michael Jordan of golf" and "the single golfer who's had the greatest impact of bringing consumers into [the game]."

Ilagan's suggested that as long as Woods is around (on or off the green), the golf industry is safe.

"I think the industry is in a little bit of panic, although it really need not be," he added.

All of the delusional talk can be viewed here...

Bridgestone bets on Tiger from CNBC.

 

Acushnet Announces Retirement Of Wally Uihlein, Effective January 1, 2018

Big news out of Fairhaven as the longtime leader of the Acushnet family of brands is retiring at year's end.

David Maher, the current top lieutenant at Titleist, will take over January 1, 2018.

For Immediate Release:

Acushnet Holdings Corp. Announces Retirement of Wally Uihlein, President and CEO, effective as of January 1, 2018

David Maher appointed President and CEO

FAIRHAVEN, MA – September 25, 2017 - Acushnet Holdings Corp. (NYSE:  GOLF) (“Acushnet”) announced today that Wally Uihlein, President and Chief Executive Officer, has notified the Acushnet Board of Directors of his plan to retire, effective January 1, 2018.  Uihlein started with Acushnet in 1976 and has been the senior golf executive since 1995.  Uihlein will remain on the Acushnet Board of Directors and also become Advisor to the Chairman.

Acushnet also announced that its Board of Directors has appointed David Maher, Acushnet’s current Chief Operating Officer, to succeed Mr. Uihlein as President and CEO, effective upon Mr. Uihlein’s retirement.  Mr. Maher, age 49, joined the Company in 1991 and was appointed Chief Operating Officer in June 2016.  Prior to that, Mr. Maher was Senior Vice President, Titleist Worldwide Sales and Global Operations from February 2016 to June 2016 and Vice President, Titleist U.S. Sales from 2001 to January 2016.   

Commenting on the announcement, Acushnet Chairman Gene Yoon said "We thank Wally Uihlein for his forty plus years with Acushnet and the terrific leadership he has provided during this time.  I am very happy that Wally will remain on the Board and also serve as Advisor to the Chairman.  Acushnet will continue to benefit from his extensive knowledge and experience in areas such as strategic planning, acquisitions, player promotion and golf equipment regulatory matters.”

Yoon continued "I also want to congratulate David Maher on his promotion to President and CEO.  During his twenty six years with the Company, David has demonstrated both the leadership and strategy skills that will ensure that Acushnet will continue to be one of the leading companies in the worldwide golf industry.”

Golf Datatech: Online Equipment Orders Up 50%

Mike Stachura parses the latest Golf Datatech numbers for GolfDigest.com and spots a few interesting trends, including online orders increases but also points out some numbers that suggest retailers will still sell most golf clubs for the time being.

According to the survey, online shopping for golf equipment was up more than 50 percent over a year ago. In addition, half of the survey’s respondents say they go online daily to get information about golf. In a 2016 GPAU study, when answering the question where they were most likely to make their next golf equipment purchase, respondents said an online retailer 13 percent of the time.

PXG Suing Retailers Over Taylor Made Irons Sets Bizarre Precedent Worth Watching

Having been rejected by courts in stage one of a patent fight over irons, PXG's Bob Parsons has taken his fight to the retailers selling Taylor Made's P790 irons, as multiple outlets reported.

From Mike Stachura's excellent Golf World analysis where he names Worldwide Golf (Edwin Watts, Roger Dunn), PGA Tour Superstore, Golf Galaxy and Dick's Sporting Goods as unsuspecting parties brought into the case by Parsons. But they apparently should not be shocked!

According to Allan Sternstein, professor of intellectual property and director of the IP and Entrepreneurship Clinic at the University of Arizona, “Those that infringe a patent are anyone who makes (manufacturers), uses (consumers), sells or offers to sell (retail outlets, golf shops, etc.) a product that falls within the scope of one or more claims of the patent. Accordingly, suing a retailer for patent infringement is totally appropriate under the law.”

Still, Al Morris, president of Worldwide Golf, said he was “blown away” when he learned Friday morning that he’d been sued by PXG. Morris was part of a team that successfully invalidated patents in a case filed by Max Out golf over clubfitting patents, a more than two-year struggle that cost Morris "hundreds of thousands of dollars" but ultimately culminated with victory in a review by the U.S. Patent and Trademark Office last month.

“I don’t understand it,” he told Golf Digest late Friday. “This shocks us. I think he’s doing a disservice to the industry. I just don’t get it.”

Chris Nickel noted this at MyGolfSpy:

By suing retailers, PXG is taking the road less traveled, but it is a road other have taken with some success. Strategically, the move might make sense, although it’s certain to draw the ire of the retail chains targeted, and likely the mainstream wing of the industry as a whole. The reality is these chains won’t ever be part of PXG’s business plan, so there’s no risk of PXG losing sales directly, and we suspect that PXG Founder, Bob Parsons, doesn’t much care what his competitors think.

It's stating the obvious: Parsons is going after retailers at a time they are struggling and yet still providing a more cost effective option for buying fitted clubs. Not everyone can afford the PXG experience and club, so feel free to think little of Parsons for dragging the good folks in retail into this fight. He certainly is entitled to protect his patents but if he cared about golf, he wouldn't drag the retailers into this.

Here is another angle worth noting: if we get to the "variable distance ball" or distance rollback stage where a product designed to be used on classic courses comes to market, patent wars may develop in an effort to slow down the manufacture and sale of such a ball.

Parsons may have set the stage for other manufacturers to go after retailers or even golf professionals who would sell a product designed to make a course more safe or to play as intended. 

What PXG Must Prove To Win Its Taylor Made Suit

Golf.com's Michael McCann tries to decipher what PXG must do to prove its patent suit against TaylorMade says this will come down to a battle over "new" and "existing" designs.

The lawsuit referenced by Parsons was filed in the U.S. District Court for the District of Arizona and is embodied in a 277-page complaint authored by attorneys from the law firms Loeb & Loeb and Jennings, Strouss & Salmon. The complaint asserts that TaylorMade has infringed upon multiple patents related to PXG's "revolutionary iron," which purportedly contains "an expanded sweet spot, having an ultra-thin club face, and an elastic polymer material injected in the hollowbodied club head."

PXG contends that the design of TaylorMade's P790 irons copies patent-protected designs for PXG's clubs.

Parsons Tweets He's Sued Taylor Made Over P790 Irons

Looks like we have a fun patent battle looming with PXG Founder Bob Parsons going after Taylor Made according to...Bob Parsons.

Chris Nickel at MyGolfSpy reminds us that golf companies sue each other all the time, it's just a bit unusual for the founder of one to announce on Twitter.

While he isn't sure what the issue is, Nickel offers an assessment that includes this:

While neither TaylorMade nor PXG has offered any official statement, one has to think the basis for the suit has to do with the injection filled, hollow-body construction that is the foundation of most PXG products. While PXG uses thermoplastic elastomer and TaylorMade uses a TPU-based SpeedFoam, if the patents are broad enough, the material won’t matter. This case will likely boil down to process and construction, not the material composition of the goo.

Through the proverbial grapevine, MGS has learned that PXG anticipated this day would come, but it would have been impossible to foresee which OEM would step far enough over the line to prompt this response from Parson and PXG.

Even better, Parsons can travel to court in his new PXG helicopter reports Ben Aberstadt at GolfWRX.

Acushnet Files Answer to Costco Complaint With Gusto!

Not coincidentally around the announcement of a slight second quarter sales dip of golf ball sales, Acushnet has countered with a lively filing!

David Dawsey at Golf Patents picks apart the claim and notes some of the stronger rebuttal points against Costco's hot-selling Kirkland ball. His conclusion:

Acushnet’s complaint contains a lot of subtle, and some not so subtle, jabs at the Kirkland Signature golf balls. It is hard to comprehend that “over half of the Kirkland Signature Golf Balls tested by Acushnet Company cracked or became structurally unsound before the testing could even be concluded.” Maybe there is some truth to the old adage that sometimes you get what you pay for! Fortunately, most amateurs would probably lose the ball before it becomes “structurally unsound;” in other words, it may not be too smart to play the K-Sig’s that you find in the woods or fish out of the pond.

This was fun from the filing:

34. Distance Performance. The results of the distance tests for the Kirkland Signature Golf Ball and the Titleist® Pro V1® and Pro V1x® golf balls during Acushnet Company’s robot testing demonstrated that the Kirkland Signature Golf Ball travelled a shorter distance than both the Titleist® Pro V1® and Pro V1x® golf balls for 130 mph drives; that the Kirkland Signature Golf Ball travelled a shorter distance than both the Titleist® Pro V1® and Pro V1x® golf balls for 140 mph drives; that the Kirkland Signature Golf Ball travelled a shorter distance than both the Titleist® Pro V1® and Pro V1x® golf balls for 150 mph drives; and that the Kirkland Signature Golf Ball travelled a shorter distance than both the Titleist® Pro V1® and Pro V1x® golf balls for 167 mph drives.

Golf Channel Acquires Revolution Golf

Erik Matuszewski reports at Forbes on Golf Channel's purchase of Revolution Golf and its 2 million subscribers.

He explains how this could be an Amazon Prime-inspired play:

Five years ago, Revolution Golf launched a premium subscription offering for which members pay up to $124 annually to access a library of exclusive video content, special offers on training aids, equipment, and exclusive member-only events. Two-thirds of the business's subscribers play golf at least once a week during the season. That participation is part of what makes golf unique – the sport’s fans are also passionate players.

Golf Channel is serving that passion. And not just via TV, but also through its continually growing digital businesses: playing, instruction, travel and now e-commerce.

As Golf Channel’s McIntosh says -- “We want to connect the world to golf.”

NY Times: "You Can Always Get a Tee Time, but Turning a Profit Can Be Tricky"

Paul Sullivan uses his NY Times Wealth Matters column to talk to a nice range of golf course developers, including Warren Stephens at Alotian Club and Paul Schock of Prairie Club. The topic? The costs and perils of buying or building a golf course.

Most of the stories end on a positive note, but not after cautionary tales about spending.

This from Chip Smith, who bought the TPC Myrtle Beach but later sold it to Chinese investors in 2014.

But last year, when he and a partner, Doug Marty, bought a course in Florida, Wellington National, he said he realized just how much money it could cost to turn around a course and make it profitable.

“We went into that one and evaluated the facilities and the golf course,” Mr. Smith said. “It was by far the worst one I’d ever seen in terms of being open and playable but being in awful condition. Doug likes to say we went in with an unlimited budget and exceeded that.”

They shut the club for a year of renovations. It has now reopened and started to attract members. The two partners are betting that it can attract members from the surrounding equestrian community and nearby Palm Beach.

But recouping their investment will take time. The initiation fee is $7,500 and annual dues are $6,750, comparatively modest in an area where $50,000 and $100,000 initiation fees are common

Callaway Buys Travis Matthew

The tentative $125.5 million deal was announced on today's earnings call, where, as Claudia Assis reports the company announced a 24% increase in net sales.

The full Travis Matthew purchase release:

CALLAWAY GOLF COMPANY TO ACQUIRE TRAVISMATHEW FOR $125.5 MILLION

CARLSBAD, Calif., August 3, 2017 – Callaway Golf Company (NYSE:ELY) announced today it has entered into a definitive agreement to acquire TravisMathew, LLC, a high-growth golf and lifestyle apparel company, for $125.5 million in an all-cash transaction, subject to a working capital adjustment.

“We are very excited about this acquisition,” commented Chip Brewer, President and Chief Executive Officer of Callaway Golf Company. “With its golf heritage, culture of product excellence and double-digit growth in the golf and lifestyle apparel business, TravisMathew is a great fit with our business, brands, culture and our strategy to grow in areas tangential to golf. This acquisition, once completed, is expected to be slightly accretive to earnings in 2018 and create significant value for our shareholders over the long-term. We look forward to working with the TravisMathew management team to maximize this brand’s growth potential.”

The acquisition is subject to customary closing conditions, including securing regulatory approvals, and is expected to close in the third quarter of 2017. Post-acquisition, TravisMathew will continue to operate out of its Huntington Beach, California headquarters.

The purchase price values TravisMathew at a multiple of approximately 11.8 times projected 2017 full year adjusted EBITDA. Callaway also expects to realize significant value from potential tax benefits associated with the transaction.

In 2017, TravisMathew’s net sales are expected to be in the range of $55-60 million, of which approximately $10-15 million will contribute to Callaway’s 2017 second half financial results assuming the transaction closes in the third quarter of 2017. Including approximately $5 million of estimated transaction expenses and incremental non-cash expense resulting from the acquisition purchase accounting adjustments, TravisMathew is expected to be approximately $0.04 dilutive to Callaway’s 2017 earnings per share but is expected to be slightly accretive in 2018 after taking into account anticipated financing costs and incremental investment in the business to support future growth

Eleven Million Wedges Later, Vokey Enters Canada's HOF

Nice tribute from Rick Young on wedge designer Bob Vokey, who entered Canada's golf hall of fame this week in the "builder" category.

He writes this with a great supporting quote from Acushnet's Wally Uihlein on the key players behind the wedge as we know it.

Eleven million Titleist Vokey designed wedges (and counting) after the very first went into the bag of PGA Tour player Andy Bean in Memphis in 1997, Uihlein believes Vokey’s place in the game’s equipment history is cemented. That point was reinforced by a short history lesson on the wedge category the Acushnet CEO indulged me with.

“This is Bob’s peer group,” he said leaning forward. “He deserves to be mentioned with Edward MacLean, who really had the first-ever patent on a wedge, with Gene Sarazen who took his inspiration for the sand wedge from MacLean, with Ben Hogan and the Sure Out, Sure On, which was the first wedge system with Hogan being the first to say, hey, the club off the fairway needs to be different than the club around the greens. From there, all due credit to Roger Cleveland. He was first to really put his toe in the water and say, I’m a wedge guy, in a full-on commercial sense. Finally you have to give credit to Karsten (Solheim) because he made the high-lofted wedge aesthetically pleasing and functional at the same time. Then there is Voke.

Bloomberg: ClubCorp Sale A Positive Sign For Golf Industry

Bloomberg's Taylor Cromwell considers the ClubCorp sale for $1.1. billion and says it's a positive statement about the core golfer market stabilizing.

He writes:

More broadly, golf has seen a resurgence in so-called avid players, those who play at least 25 rounds on a regulation course per year. The number rose to 8.8 million last year, up 400,000 from 2015, according to the National Golf Foundation. Avid players are critical to the health of the sport because they account for 80 percent of industry spending.

The challenge now is rebuilding with more realistic aspirations.

Several analysts are quoted saying the market correction days have peaked. Thoughts?

ClubCorp Sells After All: For $1.1 Billion To Apollo Global

Reuters' Greg Roumeliotis reports that the publicly-traded company owning 206 clubs and serving over 400,000 members, including at Mission Hills and Firestone, has sold to Apollo Global Management.

It's an all-cash, $1.1 billion deal netting shareholders $17.12 a share, a 31% premium over Friday's closing price. 

DallasNews.com's business writer Paul O'Donnell noted this:

Sunday's announcement comes about three months after ClubCorp's board said it would not seek a sale. Longtime CEO Eric Affeldt announced at the same time that he would be retiring. A month later, the company added two new directors at the behest of activist investor FrontFour Capital Group LLC, which had been critical of ClubCorp's management.

Phil Knight: Nike Lost Money For 20 Years On Golf Equipment

Talking to Bloomberg Television's David Rubinstein, the Nike founder declares that in spite of Tiger Woods, the company could never be profitable on equipment sales.

After mentioning their recruitment of Woods had started three years prior to Tiger turning pro, Phil Knight says the math was simple.

“It’s a fairly simple equation, that we lost money for 20 years on equipment and balls,” Knight told interviewer David Rubenstein, host of “The David Rubenstein Show: Peer-to-Peer Conversations.” “We realized next year wasn’t going to be any different.”

The Bloomberg TV interview airs Wednesday at 9 pm ET.

"Behind the scenes at a $2,000 wedge fitting"

As PXG and others have established high-end club fittings that lead to eye-popping prices for clubs, Golfweek's David Dusek tells us about his experience with JP Harrington's setup at Titleist's facility in Oceanside.

While many of us can't comprehend spending $2000 on a set of wedges, clearly there is a market for these personal service fitting given that Harrington will do 50 to 60 days of fittings with customers. Dusek explains what they'll get for their $2000 besides some very futuristic-looking clubs.

First, the heads are forged from 1025 carbon steel before being milled to precisely the desired shapes. Internal weights made to fit each specific wedge head help raise or lower the center of gravity based on loft, then a large, highly polished tungsten weight is attached in the toe to pull the CG into the center of the hitting area. All that weight can be added because the back plate is made from brushed titanium, which is exceptionally light.

While the grooves are identical to those of Titleist Vokey Design SM6 wedges, the soles of JP Harrington wedges are CNC-milled. Most have aggressive heel and toe relief for increased versatility, but if there is a buzzword Harrington loves to talk about, it’s camber. His wedges tend to have a lot of curvature from the leading edge to the back of the sole, as well as from heel to toe. Harrington believes this helps players maintain speed through the turf for improved consistency.