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.

Taylormade Golf's new P790 irons infringe upon many PXG patents. Sued them in Federal court today!

— Bob Parsons (@DrBobParsons) September 12, 2017

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.

Poll Result: "How important is it which pros play those clubs?"

Golf Channel Equipment Insider Matt Adams asked his followers on Twitter if tour pro endorsements influence purchasing, and also set up the question with this Morning Drive segment on TaylorMade's recent Rory McIlroy signing.

Granted, his followers are likely core golfers who are prone to have been with the game longer, but it's still fascinating to see how voters believe that professional endorsements translate to buying influence:

When considering the purchase of new clubs, how important is it which pros play those clubs?

— MattAdamsGC (@MattAdamsFoL) May 14, 2017

The segment:

Playoff Shipping Wars: "It certainly caused some consternation"

When GolfChannel.com's Rex Hoggard broke the news earlier this week, I think we just figured the details would suggest merely an optics play. But the FedExCup rule declaring players who endorse competing shipping companies ineligible could have greater ramifications. Oh sure, maybe it just scares a few players away from being endorsed by UPS and on we go with a brown-free Playoffs(C).

But after reading Bob Harig's ESPN.com follow-up chat with agents about the ramifications over some sort a shipping-company endorsement provision, the details will be very important. When and if we get them.

The PGA Tour said it would not comment on that aspect of the contract prior to briefing the players fully on the matter.

"It's certainly less than ideal,'' said agent Mark Steinberg, whose Excel Sports agency represents several players. "It was clearly a part of the negotiation that the tour went through, and it was one of the last stumbling blocks. PGA Tour sponsorship deal may bar players endorsing FedEx rivals from competing in playoffs.

Harig's story includes Chubby Chandler making the Mercedes-BMW analogy, and you can bet many companies will take this precedent and attempt demands in future negotiations.

More interesting will be the ramifications should Amazon want to endorse players while also moving into competing businesses.

Also fascinating will be the perception of the FedExCup as a sports competition should the provision actually rule a competitor ineligible from participating. Could that further damage how the sports world sees the FedExCup?

TaylorMade, Ashworth, Adams Sold For $425 Million To Private Equity Firm KPS Capital Partners

Nice work by Ryan Ballengee at GolfNewsNet with the news shared to Taylor Made employees Wednesday.

The deal ends a year-long effort by Adidas to unload their golf equipment and apparel brands.

David Dusek and Jason Lusk report for Golfweek on the deal, including this:

The New York-based KPS Capital Partners manages $5.3 billion in global assets in manufacturing and industrial companies, including automotive parts and electrical components.

About half of the $425 million will be paid in cash, while the remaining portion will be paid in the form of a secured note and contingent considerations. The final sale is expected to be completed in late 2017.

Ouch Scheduling Luck: National Golf Day Hits Capitol Hill On A Slightly Busy Day In DC

Unfortunate or some might say ironic scheduling, but as the golf world's very own President Donald Trump briefed Senators on North Korea, pushed tax reform and worked to stave off a government shutdown, Capitol Hill was probably not too focused on National Golf Day.

We will never know, but credit the folks in golf for still spreading the gospel in the face of Tuesday's chaos. Over 175 meetings with House and Senate members--who were undoubtedly keeping one eye on their Twitter feeds--took place, reports Ryan Herrington for Golf World.

This year’s efforts focused on three specific areas: health, labor and the environment. Participants attended 175 meetings with members of the House of Representatives and Senate from their home states, passing along the industry’s thoughts on these issues.

In each meeting, We Are Golf participants asked for support of specific bills already proposed in Congress (notably the PHIT Act, which would include physical activity, including golf lessons, green fees and camps/clinics, among tax-deductible medical expenses) or the repeal of current provisions (such as the Clean Water Act, which golf leaders says overregulates ponds and wetlands found on golf courses).

“I look forward to National Golf Day every year,” said Congressman James E. Clyburn, a Democrat from South Carolina. “It’s a chance to visit with the folks at We Are Golf here on Capitol Hill to talk about the positive impact the game has on our economy, worthy charities and personal fitness.”