A recent New York Times article espoused the possibility that gimmicky 15-inch holes will provide the much-needed spark that will pull the golf industry out of its precipitous five-year decline. Instantly, every talking hairpiece on radio, television, and the Internet took the story and ran with it.
Generally, the pundits used the article as the starting point to either 1) say this is a great way to attract new golfers and just what the game of golf needs, or 2) kick golf while it is down, and slyly work their own opinion of what the problem is with the golf today into the conversation.
A large percentage of the voices on both sides eventually got to two or three simple points: Young people are abandoning or ignoring the game because it’s too hard, too expensive, and takes to long to play. Golf is on its way to joining boxing and horse racing as vestiges of the past that have died but forgot to fall down. Phooey.
I’m fond of saying that I’m an economist by training, based on a bunch of classes I took in college. That might be a slight reach or overstatement. My bachelors degrees in economics and finance from the University of Kentucky and $40 will get you a really nice steak at Pat’s Steakhouse in Louisville.
However, I do remember enough market theory gibberish to recognize that the Tiger Woods Effect coincided with a decade long bubble in the golf industry. And unfortunately, as Tiger Woods giveth, Tiger Woods hath also taken away.
Tiger’s decline from Teflon coated Superhero to mere great golfer precipitated the bursting of the golf bubble. It’s as simple as that. That a lot of people, from real estate developers to golf club manufacturers, may lose a lot of money because of the decline is nothing new or unique. I feel bad for those people, but I refuse to believe golf will disappear or be relegated to the extreme fringe of the sporting landscape.
Now for a bit of perspective: real estate, buffalo hides, salt, oil, stocks, junk bonds, dot-coms, railroads, gold, silver, and tulips. If you can name a market or a product, an economist can probably find a bubble and its corresponding collapse somewhere in that market’s history.
In this “collapse” in golf, the manifestations of the bubble are many. Golf courses were overbuilt, saturating major cities and secondary markets with ridiculous golf hole per capita ratios. Many upscale housing development projects used the golf course for multiple purposes: a country-club like amenity for the middle to upper-middle class, to meet greenspace development requirements, and to attract the traditionally affluent golfers as target buyers.
Since Tiger Woods burst onto the scene, sponsors fought (and paid handsomely) to attach their name to PGA Tournaments, hoping to get precious visibility as the Tour was on the way up and on top. This drove prize money through the roof, making even average touring professionals millionaires several times over.
To call the competition amongst equipment manufacturers “cut-throat” over the last 15 or so years is putting it too mildly. They invested heavily in research and development to try to keep up with their peers. A few have persevered, even thrived, though many have perished. I remember not too long ago Boom-Boom and The Big Easy rocking the Lynx visor, making Lynx one of the hottest club manufacturers going, don’t you?
The list of interests affected by the fortunes of golf, professional and amateur alike, goes on and on. And I can’t deny the facts: golf viewership of tournaments on television is down, private golf clubs are struggling and golf courses across the country are closing (the Indian Hills decline in Louisville is a perfect example). And despite all the feel good initiatives aimed at growing the game, today’s younger generations aren’t flocking to the game the way mine and those before me did. These actions and reactions are all real, tangible results that I can’t dispute or dismiss.
So, I don’t want to be confused for someone who refuses to accept a reality that doesn’t suit me. However, I simply don’t believe that golf is on its way to the graveyard.
How can I interpret these facts this way? Because these are golf industry problems. These are problems for the businesses that make money off of golf and they are problems for those that are heavily invested in professional golf. But they are not necessarily problems for the millions of people that actually like to play golf.
The rest of the story on almost every market bubble and collapse is that after the dust settles and the carnage is tallied, usually the market corrects itself and returns to its prior “normal” level. The same will be true for golf.
There may yet be more country clubs that fail and more daily fee courses to close. A couple golf club manufacturers may merge in order to survive, and others will go the way of Northwestern Golf Clubs. Maybe even the sponsorship levels of professional tournaments will decline, leading to *gasp* lower PGA Tournament purses. But Tiger Woods, and to a lesser extent, Phil Mickelson, getting older and inevitably less competitive won’t sound the death knell that the naysayers are predicting.
Too many people and too much money is invested in the future of the game to allow it become American Jai alai. Golf is too great a game, maybe the greatest of them all, with too rich a history and too powerful of stories to be so completely dependent on one or two personalities. And if it is, a gimmick like a 15-inch cup isn’t going to make up the gap.
I’m all for growing the game. And as silly as it seems to me personally, for kids just getting started, maybe larger cups might be a way to keep them interested in the game. I just wouldn’t put too much stock in it being here in a couple of years.
* For further reading, please feel free to check out “Fore! No, Make that Five! 5 Reasons Golf Is In a Hole,” and “Tiger’s Back-But Golf is Still in a Hole,” by Brad Tuttle over at Time.com. If you do, take special note of the whackjob that gets quoted in the piece’s final paragraph.
7 thoughts on “Golf is dying? I don’t buy it.”
Dave, from one Economics grad to another, this is a flat out great read 🙂 Personally, I’m enjoying the less crowded courses and the reduced price greens fees that coincide with the market correction. Our trip to Myrtle this year includes 7 nights lodging and six days of golf for less than $600. Thanks! Brian
Wow! What a deal, Brian.
It took all my strength not to include charts of historical asset prices and market bubbles, as I figured that would be one too many toes over the line of nerd-dom.
Excellent thoughts, Dave. Also, I can’t imagine there’s too much satisfaction from draining a must make putt into a 15″ cup at all.
I am going to give my professional opinion and things I have noticed. Golf is struggling because of the economics of this country. There are many people that are not being able to retire early and hence do not have time for the game I love. Also the younger crowd do not have the work ethic to stay in the game as youngsters. Many of the younger people now a days if it does not come easy they are not going to play. I think the future of golf is changing and I think we have to adapt. I think it has to become more fun for everyone and it might take mixing the sport with another to bring more youngsters into the game in a round a bout way.
Coincidentally, they were advertising their Big Hole tournament event heavily at Houston Oaks today. What do I know? Maybe I’m just a curmudgeon trapped in a middle-aged man.
We are looking at putting a futgolf course in this fall. Take a look at it online. It looks truly fun to do but I think it will help bring golfers to the game through getting them involved in a hybrid style game of golf. I think it will do the same for golf as snowboarding did for skiing industry back in the day.
A motivating discussion is worth comment. I think that you should publish more about this topic,
it might not be a taboo subject but typically people don’t talk about such
subjects. To the next! Best wishes!!