Masters 2018: Golf industry hopes 'Tiger Effect' will jumpstart game

With a resurgent Tiger Woods headlining a competitive field at the Masters Tournament in Augusta, Georgia, on Thursday, the golf industry is once again counting on the “Tiger Effect” to boost the game after years of sagging participation and equipment sales.

After a lengthy absence from pro golf because of myriad injuries and a highly publicized DUI arrest last August, Woods enters Augusta National Golf Club on the short list of betting favorites to win this year’s event. A trio of strong performances, including a second-place finish last month at the Valspar Championship, are producing a surge in interest from casual golf fans. With Woods in contention, the Valspar Championship drew a 5.11 overnight rating – the PGA Tour’s largest audience in five years.

Woods’ latest comeback bid comes at a challenging time for golf. Overall participation fell to 23.8 million in 2016 from 25.7 million players in 2011, according to industry figures, and golf equipment sales have also slumped.

Still, the golf business is “solid and evolving,” according to World Golf Foundation CEO Steve Mona, and a strong showing from Woods would help jumpstart the industry as it attempts to rebrand from a tradition-heavy activity for rich elites to a modern game that’s accessible to all. 

“He creates tremendous interest in the game,” Mona told FOX Business. “If you look at his career, what he did in those early days when he came onto the scene and was at the top of his game, he created interest in the game among people who likely otherwise wouldn’t be interested in it. The challenge for the industry, generally, is to convert that interest.”

Converting casual fan interest into active, paying golfers is the industry’s main focus, but Mona argues that the golf business is more stable than the numbers suggest. While overall participation has fallen in recent argues, Mona notes that the number of avid and core golfers – defined as two of the most active groups – rose to a combined 20.1 million in 2016. Those golfers “drive the economic engine” of the industry and are evidence that its core business is strong, he said.

Certain individual companies are also bucking the industrywide sales slowdown. Callaway Golf reported a 17% rise in net sales to $1.049 billion in 2017. Bridgestone Golf posted its best year in company history, setting records for overall sales and shipments of Bridgestone golf balls, which Woods endorses.

Bridgestone has already seen a “Tiger Effect” since Woods’ return. The company said golf ball sell-through rates are up 115% year-over-year in 2018 when Woods is playing. E-commerce sales have risen steadily with each event Woods has played.

“Tiger is a rare athlete who transcends his sport, and it’s been a treat for golf fans around the world to watch him compete this season,” Angel Ilagan, president and CEO of Bridgestone Golf, said in a statement.

Still, industry data suggests the success stories are the exception rather than the rule.

Golf equipment sales declined by a “mid-teens” percentage from January to November 2017, according to NPD Group sports industry analyst Matt Powell, while golf club sales fell more than 20%. Powell attributes the declines to lukewarm interest among Millennials and a gradual “aging out” of the Baby Boomer generation.

Nike discontinued its golf equipment business in 2016, citing declining sales, and Adidas sold TaylorMade to a private firm for $425 million last May. Golf’s top brands – Calloway Golf, TaylorMade, Ping and Acushnet, which owns Titleiest – own 70% to 80% of industry market share, according to Casey Alexander, a senior vice president and analyst at Compass Point Research and Trading.

“When you talk to people in the industry, they’re going to tell you that the industry is stabilized and improved, and you’re going to hear it over and over and over again,” Alexander told FOX Business. “Stabilization means that there’s 800 less retail doors than there were two years ago. Stabilization means that, with Nike out of the golf club equipment market, it makes it a little better for everyone else. It’s the steel cage battle royal for market share, and every few years, somebody new gets thrown out of the ring.”

Mona said the golf industry has a plan to modernize the game and attract new players that will drive television ratings and equipment sales. In addition to making the game accessible to casual fans through training programs such as “Get Golf Ready,” an adult player development initiative, industry leaders have embraced other forms of play, such as driving ranges and simulators.

Topgolf is arguably the most successful outgrowth of golf’s next phrase. The Dallas-based company, whose venues feature tech-enabled driving ranges, bars and other golf-related activities, has drawn major investments and could go public within the next few years, according to multiple reports.

“Golf used to mean, 20 years ago, 8 a.m. on the first tee wearing steel spikes on a traditional green-grass golf course,” Mona said. “Today, golf participation can mean 8 p.m. at a Top Golf wearing flip-flops with your hat on backwards and a drink in one hand. It’s up to us to nurture that and hopefully convert that into the traditional game, because the traditional game is where the real spending occurs in golf.”