Hackers truly believe their game will benefit if they use the same gear as the top professionals. Richard Gillis looks at how club-makers exploit this innocence
As Tiger Woods outplayed his nearest challengers coming down the stretch at Royal Liverpool on Sunday, the television cameras lovingly recorded every shot hit by the players in the final two pairings. And the equipment companies who supply them also took the chance to bathe in over four hours of live global television exposure, safe in the knowledge that around 100 million golfers would be taking careful notes. For Nike (sponsors of Tiger Woods), Titleist (Ernie Els), Ping (Chris DiMarco) and TaylorMade (Sergio Garcia), Sunday was payback time, a return on the millions of euro they spend each year on player endorsements.
The British Open is the biggest event in the golf business calendar. For one brief week of the year, the equipment industry seems like a boom town, enjoying its moment in the sun, the eyes of the world staring hungrily at its wares.
However, the buzz around the Open presents a misleading picture. For the other 51 weeks of the year it is a different story as the business of making golf clubs becomes ever more cutthroat and power distils into the hands of a select few specialists with extremely deep pockets.
Last week's daily newspapers splashed huge photos of the stars in the latest garb, television news offered hourly updates with features on Tiger's choice of shirt or the cut of Ian Poulter's trousers. Such is the opportunity that Poulter has recently left TaylorMade, with whom he had a 1650,000 contract for clubs, shoes and clothing, to start his own golf-wear business, teaming up with London designer William Hunt.
Far away from Royal Liverpool and the attentions of the world's media, the ripples created by Tiger and friends are felt in the pro shops and high street golf stores.
"On the Monday after a big tournament, we'll always get inquiries about the shirt Tiger was wearing or a particular putter or driver they've seen being used on the TV," says Carl O'Keefe, head pro at McGuirks Golf in Howth, Co Dublin.
It reveals much about the unquashable dreams of hackers everywhere that they truly believe their game will benefit from using the same equipment as the top pros. This folly comes with a high price tag, as a glance at the rows of gleaming new irons at McGuirks illustrates.
A top-of-the-range, Phil Mickelsonendorsed Callaway driver, the titanium-headed Fusion X460, is priced at 1350. Further down the racks, a driver with similar characteristics but a lesser brand name is available for 1110.
Relentless product development has shortened the valuable life of a club to a matter of months. The previous incarnation of the Callaway club, launched just two years ago to much marketing fanfare, sits alone and unwanted at 190. The range of prices for one of the hot products of the moment, the hybrid rescue club, goes from 129.99 to 1200 for a top-of-the-range TaylorMade.
"As a high-value brand, we have to have the validation of the best golfers, from touring professionals to club pros," says Sean Toulon, general manager of TaylorMade-adidas Golf Company.
At the heart of this statement is one of the tenets of the equipment business: the players sell the clubs. The major club manufacturers spend between 160 million and 1100 million a year on sales and marketing. A significant proportion of this goes on player endorsement fees.
The economics of the industry run like this: there are no more golfers than there were 10 years ago, and in fact there are fewer rounds of golf played. However, the same number of golf clubs are sold each year, therefore to increase profit margins club makers must increase their prices year on year. To persuade us that these increases are worth it, they must make ever more outrageous claims on behalf of their products.
"The fine line is that if you bring new products to market too often, you confuse the consumer," says Toulon. "We have to be careful, because we are getting close to that point right now. The ideas are coming faster and faster."
The result of this increase in marketing costs has been a polarisation of brands. The cost of endorsements separates the big dogs from the rest. In recent years, a number of popular brand names have either gone out of business or been taken over by the competition. Adams Golf, which produced the popular Tight Lies range, McGregor, made famous by being the club of choice of Jack Nicklaus, and ball-maker Top Flite are among those subject to takeover or receivership in recent years.
As with many things in golf, it helps to have the luxury of being indulged by wealthy parents: three of the top five brands in the market are owned by multinational conglomerates: TaylorMade is part of the adidas group; Titleist is owned by Fortune Brands, a multi-product company, and Nike is well, Nike.
"You look at all the things that need to happen to get the product in front of the consumer - it costs millions of dollars," says Toulon. "There are fewer companies that can afford to do that, and so we've seen a consolidation in the market and any of the second-tier companies are not having a great time."
To make matters worse, the manufacturers' margins are being hit by a shortage in the supply of titanium, a key material in driver production. The advantage of titanium is that it is both strong and exceptionally light in weight, which means large clubheads can be produced without the golfer feeling like there is an anvil at the end of the shaft. Some driver heads boast a confidence-boosting 460-cubic capacity, compared to the norm of around 300 a few years ago.
The main beneficiaries of this marketing bonanza are the players, who have seen their endorsement values rise.
The most high-profile deal of recent years was between Phil Mickelson and Callaway. When Mickelson switched from Titleist in 2004 it cost Callaway around $5 million a year. The result has been a period of Major championship success for Big Phil, and much reflected glory for the club-maker. But the marriage raised a few eyebrows in golf circles, as Big Phil was not known to be a fan of the bulky design of the Callaway clubs.
American player David Toms tells a story about when Big Phil peered into Colin Montgomerie's bag as they walked off down the first fairway during the 2002 Ryder Cup at The Belfry. Toms, who was Mickelson's playing partner, overheard him say, "Jeez Monty, how do you hit it with those shovels?"
Montgomerie's reply was wryly self-deprecating, "They're gameimprovement irons," he said, "I thought they'd suit me."
The biggest endorsement deal of them all is Nike's arrangement with Tiger Woods. Woods is paid around $100 million over five years and is the reason Nike is in golf at all. However, despite having the greatest salesman in sports marketing history at their disposal, the men from Portland, Oregon, have found the sport difficult to crack. It has struggled to break the 10 per cent market share barrier. Its share of the ball market sits at around six per cent, according to Sports Marketing Surveys.
Golfers appear to share the view of Toms, a Titleist endorser, who was quoted while signing autographs at a recent event. When a fan handed a Nike golf ball for him to sign, Toms hesitated before asking, "Do you have a Titleist?" As the fan presented her ticket to sign instead, Toms said: "Nike make tennis shoes. Not golf balls."
But Woods' value to Nike is that he appeals to groups of people that sit outside of the game's white, middle-class, middle-aged, male constituency. Participation in the sport has been stagnant for some years. Without an injection of new blood, the game, and its club-makers, face a difficult future. Tiger himself has commented that golf needs to "look like America" in terms of the diversity of those who play the game. Nike is backing up that statement with cash. They were quick to snap up then 16-year-old Michelle Wie as she turned professional last year.
But an unpalatable truth is that whatever the claims made by the marketing people, golfers do not appear to be getting any better. The huge advances in club manufacture have been to the sole benefit of the elite touring professionals. This is summarised neatly by Carl O'Keefe of McGuirks Golf, who has chastening news for those hackers who believe a new driver is the answer to all those swing problems.
"At the end of the day," says O'Keefe, "it's about the Indian, not the arrows."
