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Tiger Woods is back. The $70 billion golf business? Not so much

  • Kim Bhasin and Eben Novy-Williams

    Bloomberg

New York | Thu, April 5, 2018 | 07:29 pm
Tiger Woods is back. The $70 billion golf business? Not so much Tiger Woods of the United States stands on the 17th green during the second round of the Hero World Challenge at Albany, Bahamas on December 1, 2017 in Nassau, Bahamas. (AFP/Mike Ehrmann/Getty Images)

In an age of Imax action movies and Ultimate Fighting, the leisurely sport of golf faces a harsh reality: Its biggest draw remains a 42-year-old with a bad back.

That star, the inimitable Tiger Woods, returns to The Masters on Thursday. Golf fans -- and the US$70 billion industry -- are thrilled that he is now a favorite. If he continues to bounce back from a decade of injury and scandal, could he revive the favorite pastime of US presidents from Eisenhower to Obama to Trump?

Probably not. Golf was a healthier, more popular sport during Woods’s early career. Even then, television networks, sponsors and tournament organizers benefited most from his runaway success, according to Jim Koppenhaver, founder of golf consulting firm Pellucid Corp.

“There was little to no correlation to the health of the core industry, which is in the business of running golf facilities, generating rounds, revenue and jobs,” Koppenhaver said.

In 2016, America counted only 23.8 million golfers, down from its peak of 30.6 million in 2003, according to the National Golf Foundation. In 2016 alone, 230 courses around the country closed for good.

Fewer people are playing because of the time sink of four hours on the links, the cost of equipment and green fees, and the sport’s inherent difficulty and frustration. To attract a younger generation, leaders of the sport have tried six-hole courses -- and even bigger holes. Topgolf, a driving-range franchise, is courting newcomers at venues that resemble high-end bowling alleys that feature big-screen TVs and serve chicken-and-waffle sliders, sangria and margaritas.

Imagine the excitement if customers could watch an ascendant Woods. When he finished second at the Valspar Championship last month, ratings on NBC were 190 percent higher than the previous year. The final round’s overnight ratings beat those of every PGA championship since 2014, every US Open since 2013 and every British Open since 2000, according to Sports Media Watch.

In January, Woods tied for 23rd at the Farmers Insurance Open, but the ratings on CBS rose even after he left. When the broadcast moved to to the Golf Channel for coverage some of the playoff, it was the network’s most-watched telecast ever.

CBS Sports Chairman Sean McManus said of the Woods effect: “It’s as automatic as anything in sports television.”

Not surprisingly, corporations are betting on Woods. In December 2016, Japan’s Bridgestone Corp. signed Woods to a multiyear endorsement deal and recently released a Woods-branded golf ball.

Early last year, Taylor Made Golf Co. signed Woods to use its clubs after his previous sponsor, Nike Inc., got out of the golf-equipment business. Onetime backer PepsiCo Inc. has yet to hop back on board. When Woods plays, his sponsors get much more screen time than those of his competitors, according to an analysis by Nielsen. One of the world’s highest-paid athletes, Woods last year had $37 million in endorsements, down from $100 million in his prime, according to Forbes.

Whatever the limitations of the Tiger effect, investors are driving up golf-related stocks. Sporting goods maker Callaway Golf Co. is up 20 percent this year. Acushnet Holdings Corp., which owns golf brands Titleist, Pinnacle and FootJoy, has risen 11 percent. Jefferies LLC analyst Randal Konik credits an industry shakeout, more than Woods.

“What’s good for golf is this idea of supply matching up with demand,” Konik said. Woods helps, but “golf does not need Tiger.”

That may be good for golf, since Woods is no longer a sure bet. Starting in 2009, his much-publicized extramarital affairs and, later, a stint in sex rehab, cost him sponsors such as Gatorade Co., Procter & Gamble Co.’s Gillette and AT&T Inc.

More recently, Woods has battled a host of different injuries, including a bad back requiring four surgeries. To make things worse, he was arrested last May and charged with driving under the influence. Toxicology reports found a mix of painkillers and sleep drugs in his system.

A new generation of golf stars such as Jordan Spieth, Rory McIlroy, Dustin Johnson and Bubba Watson hasn’t been able to recreate the magic of Woods’s peak.

“Tiger and the younger stars can lead horses to water, but the industry has to make them drink,” said Joe Belch, chair of the marketing department at San Diego State University. “Those in the industry know they can’t rely on Tiger making everything good again. They have to keep working hard at the grass-roots level, getting younger people engaged in the game.”

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