“There remain concerns about the long-term success of the golf industry among a class of Millennials who are gaining purchasing power and are largely the target of networks seeking to raise their floundering ratings,” wrote contributor Darren Heitner. “However, there exist many signs that the state of the golf industry remains strong, despite Tiger Woods’ prolonged absence from the sport.”
On the eve of the 114th version of the U.S. Open Championship at Pinehurst Resort and Country Club in North Carolina, Forbes.com published a “state of the golf industry” assessment from contributor Darren Heitner.
“It is somewhat telling that Tiger Woods’ absence from the [U.S. Open at Pinehurst], due to his ongoing recovery from back surgery, is one of the main storylines leading up to the event,” Heitner wrote. “After all, broadcasting network NBC continues to include Tiger-related highlights in its on-air commercials.
“However, despite a clinging on to Tiger Woods as he ages and health concerns persist, the state of the golf industry may not be as dependent on an active and involved Tiger as many believe,” Heitner continued.
Heitner’s piece quoted Steve Mona, Chief Executive Officer of the World Golf Foundation, as believing that the golf industry going into the Open is quite strong even though Tiger Woods remains off the course.
“Despite Tiger’s absence, about 200,000 or so people will be attending U.S. Open,” said Mona.
“There’s no question that Tiger moves the needle from standpoint of TV ratings—when Tiger’s in the field and playing well, the ratings are going to move in a big way,” Mona admitted. “However,” he added, “if you look at the PGA Tour’s cumulative ratings this year, those ratings are on par with what they had a year ago, which shows that the Tour has strength from the standpoint of its overall product that is bigger than one player.”
Mona’s statement must be reconciled with the fact that TV ratings for final round coverage of The Masters in 2014 were the lowest they have been since 1957, Heitner noted. Further, the final round of The Players championship earlier this year experienced a 54% drop in viewers from 2013 numbers, with a mere 2.6 overnight rating on NBC.
So, Heitner asked, are people making too much of the effect of Tiger’s absence, or is it truly being felt on-and-off the course?
Even Mona will admit that everyone wants Tiger Woods in the game — he brings people to the course and tuning in to golf matches who are casual fans and do not commonly classify themselves as golf fans, Heitner noted. The relevant question for a true analysis of the state of the golf industry, he said, is: Does golf do well whether Tiger Woods is on the golf course or not?
“When you’re looking at the golf industry, you need to take a holistic approach and look at it from all perspectives,” Mona told Heitner. ”For instance, if you look at golf from the standpoint of its footprint in America and our way of life, it’s considerable. Golf generates almost $70 billion per year for the U.S. economy [and] employs almost 2 million Americans.”
Golf is not on life support, Jon Last of MediaPost, a media, marketing and advertising website, told Heitner.
”Today’s golf industry has evolved to become more efficient,” said Last. “The equipment industry has evolved from highly fragmented to a handful of top-tier competitors, most of whom are part of public companies.
“Facility management, vertical golf media and golf retailing have also consolidated into the purview of larger, holding companies,” Last noted. “The game’s governing bodies have continued to upgrade their talent and have committed significant resources towards studying and developing new entry ramps that make the game more accessible to market segments that have not historically embraced the game or been provided with easy and welcoming access.”
The focus is now heavily placed on the perceived success of the U.S. Open at Pinehurst, Heitner wrote. The Pinehurst, Southern Pines, Aberdeen Area Convention & Visitors Bureau, in conjunction with North Carolina State University, projects that the back-to-back 2014 U.S. Open Championships (including the women’s competition the week after the men’s) will have a total economic impact of $169 million in North Carolina. Mona said the championships will generate roughly $70 million more for North Carolina than last year’s U.S. Open at Merion Golf Club in Ardmore, Pa.
When discussing the state of the golf industry, Mona also places heavy emphasis on recent contract negotiations concerning television deals to boast about the strength of the sport, Heitner wrote. Mona references an 11-year agreement that the U.S. Golf Association (USGA) entered into with Fox Sports that will allow the network to begin carrying the U.S. Open starting in 2015. Mona estimates the contract to be north of $1 billion over the term of the deal.
Mona also brought up a fairly new agreement between The PGA of America and NBC Sports Group that extends their relationship through 2030. While compensation terms have not been disclosed, Mona says it is understood that it is for the highest rights fee in the history of the Ryder Cup.
So, Heitner concluded, while concerns remain about the long-term success of the golf industry among a class of Millennials who are gaining purchasing power and are largely the target of networks seeking to raise their floundering ratings, there exist many signs that the state of the golf industry remains strong, despite Tiger Woods’ prolonged absence from the sport. Increasingly, he noted, the golf community will turn to rely on a group of stars that include Rory McIlroy, Jordan Spieth, Adam Scott, Bubba Watson and Phil Mickelson, who is seeking the final leg for his career Grand Slam at Pinehurst.
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