Seeing green: Woods accelerating upswing for
golf industry
By RICHARD ALM / The Dallas Morning News
The way his father likes to tell it, Tiger Woods was born for
the big time.
The golf industry hopes Earl Woods is right. Although his son
is only 21 years old and still a first-year pro, an entire industry
has started to see green in the young phenom with the flawless
swing, booming drives and steely nerves.
Equipment makers expect a surge of interest in golf that will
increase sales of clubs, shoes, balls, bags, clothing and other
goods, even for companies Woods isn't endorsing.
Golf courses are expecting the "I'm Tiger Woods"
phenomenon to translate into new players.
The Professional Golfers Association Tour, its sponsors and
television networks already see Tigermania producing record crowds
and ratings. The pro golfers themselves see Woods leading a surge
in marketing that will mean bigger deals for players.
"Golf already was on an upswing in popularity, but Tiger
has accelerated the pace," said Bob Williams, president of
Burns Sports Celebrity Inc.
The Dallas-Fort Worth area will get its first taste of Woods'
impact on golf during the next two weeks. He is playing in this
week's GTE Byron Nelson Classic and, if all the signals are correct,
next week's MasterCard Colonial. The Nelson is a sellout for the
first time, with $8 million in advance sales. As many as 250,000
fans are expected for the event's five days, 100,000 more than
last year.
Tiger Woods, of course, already is getting his.
Multiyear endorsement deals drew $40 million from Nike Inc.
and $20 million from American Brands Inc., the maker of Titleist
balls and Cobra clubs. He's got a $7 million stake in Planet Hollywood,
parent of the Official All Star Cafe. In less than six months
on the PGA Tour, he has won almost $1.2 million in prize money.
More money is going Woods' way. International Management Group,
the global sports management company handling the golf sensation,
gets offers for endorsement deals nearly every day. Contracts
are in the works for a soft drink, a credit card, a fast-food
company and an automobile.
Woods, a poised young man of African-American, Asian, American
Indian and Caucasian heritage, may well end up eclipsing basketball
star Michael Jordan, the reigning king of sports pitchmen at $40
million a year. In a poll put out last week by Burns Celebrity
Service Inc., corporate executives made Woods the top choice to
endorse their products.
No one denies Woods - who captured the national imagination
at last month's prestigious Masters tournament in Augusta, Ga.,
with a course-record, 12- stroke victory - is creating excitement
for a game usually thought of as a bastion of middle-age white
men. To the extent Woods attracts Americans into golf, he's going
to boost the business.
Not that the $15 billion-a-year business was so bad before
Woods turned pro in September.
Take golf equipment: Americans already spend more outfitting
themselves for golf than for any other sport. According to the
National Sporting Goods Association, the industry's sales, including
shoes, rose to an estimated $1.68 billion from $948 million in
the last decade, an average annual gain of 7.5 percent. The projection
for 2000: $21 billion.
Equipment sales aren't the only sign that golf isn't exactly
an industry in need of a savior. The PGA Tour's revenue skyrocketed
500 percent in the last decade, reaching $318 million last year.
At the same time, the number of golf courses increased to 15,703
from 13,353. Arnold Palmer and Jack Nicklaus show up every year
on the Forbes list of top-paid athletes, testament more to their
ability to sell products than play golf.
Some golf-related companies already had been cashing in. Callaway
Golf Co., maker of Big Bertha oversize clubs, has seen sales jump
to $678.5 million last year from $132.1 million in 1992. National
Golf Properties Inc., owner of 117 golf courses in 27 states,
saw its sales rise to $58.9 million in 1996 from $13.2 million
in 1992.
So where does Woods help? The number of golfers and the rounds
they play hasn't budged since the start of the decade. The numbers
for 1996: 24.7 million golfers and 477 million rounds. Now that
Woods is striding down the PGA Tour's fairways, Joe Beditz, president
of the National Golf Foundation, an industry group, expects 2.5
million to 5 million new golfers by 2000.
Some of those golfers would have taken up the game without
Woods, but Beditz says the golfer's timing couldn't be better
for the sport, with the post-World War II baby boomer set about
to turn 50 and their children - the echo of the baby boom - entering
their 20s.
"Who is the most visible echo- boomer? Tiger," he
said.
Golf needs to attract more women, minorities and young people,
and that's where Woods can help the most.
"One person can make a difference, if that person is Tiger
Woods," Beditz said. "He will end up enhancing the takeup
rate. The last time we had this opportunity to broaden the game's
appeal was when we had Eisenhower, the golfing president, and
Arnold Palmer."
According to the foundation, each golfer spends about $600
a year on the sport. Every time the sport expands by 1.5 million
golfers, it grows by $1 billion.
Brian Murphy, managing editor of the Sports Marketing Letter,
calls Woods the first sports superstar of the 21st century, a
tribute to the golfer's youth and his prospects for a long, lucrative
career, one that pays off for the industry, as well as the individual.
The most immediate ripples, however, are with the enterprises
closest to Woods. Tournament officials wait on pins and needles
to find out whether Woods will play in their events. If he's in
the field, a tournament sees a rush to buy tickets - perhaps as
much as $1 million or more, not counting the money spent at hotels,
restaurants, rental-car companies and airlines. Most tournaments
donate their profits to charities.
If Woods is playing, television ratings are about 20 percent
higher. According to CBS, the final round of the Masters was the
most watched golf event ever. One of the biggest fallouts of Woods'
arrival may be the PGA Tour's next television contract, a four-year
package with six networks that kicks in in 1999.
"He has created an interest in the PGA among people who
do not really play the game, don't follow it and have not historically
watched it," says Tim Finchem, PGA Tour commissioner.
Under the new contract, golf will be more visible than ever.
The number of hours on the tube will rise 20 percent to 413.5
in 1999. The PGA Tour's television revenue will reach $200 million
a year in 2002, up from last year's $95.6 million, allowing the
average tournament purse to double to $3.5 million.
That's only part of the reason that other touring players are
warming to the on-course competition from Woods. Golf's new commercial
cachet may have helped Phil Mickelson land deals with IBM and
Hugo Boss golf apparel. Corey Pavin has signed a $10 million contract
with PRGR, a Japanese club maker.
Woods' impact on the golf business probably may not reach its
zenith for a year or two - as the new golfers and products show
up. A good example is Nike, a small player in the golf business
when it signed Woods last year. The company's saturation ad campaign
helped make Woods a household name. Nike's big payoff, however,
will come as the company reaches the market next spring, when
its Tiger Woods line of apparel goes on the market.
Nike predicts its golf business will grow to $180 million by
the end of 1998, a 60 percent gain over what's expected in 1997.
Woods' economic impact will depend on how much he can inspire
the sport to broaden its demographics, moving beyond the current
backbone of 40- year-old men earning $60,000 a year.
"New people are being attracted to golf," Williams
said. "Will they stay long term? That remains to be determined."
Distributed by Knight-Ridder/Tribune Information Services.
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