Investing? 34 Reasons Why Golf Is A Troubled Industry


In an effort to sustain revenue and attract an aging population, golf has become more of a riding past time away from its walking roots. The industry struggles to maintain the number of golfers and rounds played while golfers continue to decline as a percentage of the population.

(Photo courtesy of Cristina Anne Costello) 

There is so much to love about the game of golf, but since the late 1990’s, it has been an industry in decline and prospects are very  bearish. So often I have been asked by those considering an investment in some aspect of the game to advise them about the state of the game and if the risk is worth the rewards. My quick response is to tread very, very carefully and then keep your money in your pocket. The number prospering in the golf industry is small and declining. Golf, however, will not disappear in my lifetime, but it will struggle to sustain any growth. The real threats will come in the next fifty to one hundred years. My thoughts on this have proved accurate over the last two decades. Let me explain.

Golf is a great “friend-maker,” a wonderful way to enjoy nature, and a fun way to compete in spite of its convoluted set of rules. It can establish a sense of real trust appropriate to doing business that is seldom found elsewhere. Played in the spirit of the game, golf bridges languages, ages, social status, nationalities, religions, races, gender, and just about anything you can think of. It fosters values of honesty, respect, and sets a splendid life example for youngsters. Where walking is permitted over riding in a mandatory cart, it is also good exercise. Playing the game provides a wonderful opportunity for not only keeping our bodies healthy, but also for rejuvenating our mind and spirit. Most would agree these are reasons why anyone might be bullish on golf. As an industry, however, golf is and has been dysfunctional.

As a former golf “insider” for about thirty years and also a consultant to more than a dozen other industries, I will maintain that the golf industry landscape is littered with hazards, hardly attractive.

Here are a 34 perspectives that I garnered about the golf industry that should give you pause:

1. According to one golf analyst, “Nearly 40% of the golf courses in the U.S. are economically unviable.” As I write this, American golf has lost somewhere around 2,000 courses to closures and as baby boomers pass and costs increase, more will be on the horizon. Consider that one of the country’s largest golf associations makes money from hosting weddings, but loses it on their 27-hole golf course. It has been a common practice for some upscale developers to subsidize their private golf courses until they sell out their real estate and that’s when the membership becomes aware of the true costs of operation.

2. Golf courses consume an inordinate amount of land and resources, namely water, fertilizers, and manpower given the size of the population it serves. Items such as taxes and insurance and other regulations make owning and maintaining a facility even more tenuous as populations grow in their need for land and water.

3. Third-parties have taken control over needy golf courses who are unable or unwilling to market and manage their tee times.

4. The pace of play has slowed over the last half-century to make golf course through-put or total rounds a conundrum even if demand were to be high. Instead of successfully addressing the slow play issue, the industry has suggested shortening the experience from 18 holes to 12-9-6 hole play. Of all people, the PGA Sections have themselves never been able to successfully mitigate their own slow play issues.

5. One industry study that appeared to have been kept relatively under wraps was that between 2001 and 2006 (a prosperous period for increased disposable, personal income), American golf lost between 22-24% of its white, male players between the ages of 26-45. That has proven to be a time-bomb as players have dropped from approximately 30 million into the 24 million range in spite of aggressive “Grow The Game” campaigns. The industry has never yet found a way to recover. Another industry study in the late 1990’s identified that a host of other sports or past times were growing at double and even triple-digit rates at the expense of golf that was then peaking.

6. The demographics of American golf is one of older folks and getting older and not younger. While youth are targeted, golf has struggled to retain that group as it moves into adulthood. That does not bode well for the longer term. Just watch a golf telecast and the nature of the commercial advertising will prove this.

7. Water usage in many popular golf areas will no longer be politically viable or affordable. Climate change impacts drought and storm conditions affecting viability and available playing time respectively.

8. Despite the emphasis on diversity and inclusion, golf is mostly a sport for well-do-do older Caucasian men and women with the average ages approaching sixty.

9. Most golf course owners or operators don’t comprehend that they are in the entertainment/service/hospitality business while farming a piece of ground to exacting standards. If you don’t understand your business, how can you serve your customer?

10. Few golf courses have a strategic plan, and even fewer allocate cash flow to a capital reserve account.

11. Most daily fee golf course owners are poor at marketing. This is a gross understatement echoed repeatedly by fellow industry consultants. The same applies to many private clubs attempting to recruit new members.

12. Golf personnel with some exceptions are often not managed professionally nor are held to the same standards as many other businesses. Management companies with a few exceptions tend to be more efficient than daily fee golf course owners, but don’t come close to optimizing a golf course’s financial performance. Golf is still aptly described as a “Mom & Pop” industry.

13. Public-access facilities in general terms provide very poor customer service. Metrics demonstrate that the motel industry exceeds that of golf. (Private clubs appear much better as there are many owners always measuring their personnel making those jobs very challenging  and tenuous.)

14. Several management companies operate with apparent conflicts of interest, financially benefitting themselves at the expense of the golf course owner.

15. A fellow golf consultant writes:  “Municipalities are poor stewards of taxpayer resources. The decisions they make would be vastly different if they were spending their own money. And be on the lookout for favors the industry extends the politicians.”

16. Investors in equipment, service, and accessory golf companies and startups are notorious for their lack of due diligence and market research. Rather their love for the game overcomes any common sense. Since 1975, I have personally witnessed an endless parade of many hundreds of failed golf entrepreneurs.

17. The fringe benefits paid by municipalities or the use of union labor make the probability of their golf operations’ financial success unlikely.

18. One industry expert terms “The ‘Request for Proposal’ process undertaken by municipalities is a shame and a wasteful effort of a vendor’s resources.”

19. Golf associations are very in-bred. Another industry expert said, “They are apt to reject nearly anything developed externally that might benefit their membership.” When someone fails in one position, you will often see them surface in another organization as is also the case with equipment manufacturers, and clubs and management companies.

20. Decision-makers whether they be owners, operators, golf professionals, staff, media, etc. are subject to receiving all forms of gratuities and favors that don’t make for honest or best decision-making. While this may customary and not against any laws, it does not strike me as ethical and does not assure the best outcomes.

21. Associations continuously talk about working more closely together, but it is under the guise of “keep your friends close, your enemies closer.”

22. The different golf associations have very different goals though they all benefit by a rising tide. There is a lot of “backstabbing.”

23. The egos of many of the industry leaders is self-defeating. Just witness the current strife between the PGA TOUR and LIV Golf.

24. When senior leaders of an Association talk with you, what they most often tell you will be to appease you, but it is not what they genuinely believe. They are more than like to master the “spin” and explain rather than to listen. If you want honesty and frankness, speaker to a lower-level staffer.

25. Those who administer the rules and standards of equipment have not yet adequately addressed the disparity of the recreational golf and the highly skilled player with the latter rendering facilities obsolete (an issue since the 1970’s). Efforts to make the rules more understandable or user-friendly continue to fall short. (For an association of golf professionals that I once administered, only three of more than 1,000 constituents either took the time or were able to pass the USGA/PGA rules test. In a staff of six, three of us had passed and the others didn’t play golf. Relatively few playing professionals are experts on the rules of of the game they play and those in the amateur bodies typically demonstrate a more dedicated interest in the Rules of Golf.

26. PGA of America members are a very passive-aggressive group. While they tend to be very unselfish and give freely of their time and talents, they compete with one another for customers, jobs, and local tournaments. On the surface, they are a very congenial group, but behind the scenes, their talk can often be outright malicious toward one another. As a PGA Section Executive Director for seven years, that was the one of the biggest hurdles that my staff and I had to tread around on a daily basis.

27. The PGA career path involves very long hours, very minimal pay, and for many a short career life span (though I can testify that it is a great way to meet people). Those prospects and that turnover does little to attract top candidates who have both the skills and personality to succeed. Any good-playing amateur with ambition will be able to enjoy more income and job stability, and also be able to enjoy more golf staying outside the industry.

28. The individual PGA of America Sections have long been suspicious of their Headquarters staff. The Headquarter staff is paid far more than the membership could ever hope for from the TV rights to the PGA Championship and Ryder Cup events and the member’s dues. Headquarters typically comes up with well-intended, often one-size-fits-all macro initiatives, and then local PGA members either sabotage the efforts out of spite or honestly don’t feel these might apply to or work in their local markets. Other times, they are just too busy with their jobs or their lives to care. On paper, the PGA of America is the best vehicle to affect industry change, but in reality it seldom works. (Though the golf course owners have never had a particularly strong alliance, I have long speculated that working through them might be the best way to affect improvements.)

29. A golf-related investment has shown itself to be one of either simply pure love for the game, folly, or ego. New courses and successful new golf enterprises will be few. The best to be hoped for is that today’s aging golf layouts are lovingly updated for water, drainage, aesthetics, and playability so they can continue to compete for lessening numbers of new players. Any for many senior golfers who might entertain a private club experience, they tend to be adverse to spending thousands of dollars in assessments when they realize their remaining time is limited.

30. Golf equipment manufactures have had little to interest the public for more than a decade as the ruling bodies have rightfully put limits on the equipment. Add that to stagnant growth in the game, and the prospects are grim. Beyond vanity, there are few reasons to constantly upgrade your equipment as in the past.

31. More golf course owners have discovered that they no longer need the costly, varied skills of the prototypical PGA professional. With an eye on the bottom-line, they can hire a part-timer skilled in merchandising, an outgoing greeter, and a junior administrator at much less cost. If lessons are desired, that can be farmed out to a free-lance teacher as needed thus avoiding more overhead. Finally, with shopping online and in discount stores, there is really no need for an expansive golf shop.

32. Much like other industries, the golf industry inflates their economic impact numbers by sliding in many of the real estate and development personnel and costs to their figures. For several decades, developers used golf to market their properties (often as loss-leaders), but that is becoming less and less viable given the associated costs of the sport and customers’ changing desires. Except in a few selected markets, golf is no longer the economic driver it was promoted to be.

33. Unfortunately despite the many benefits of playing golf, much of the mainstream media continues to portray golf as an elitist sport (not true) and one not “politically correct.” Every President (with the exception of Jimmy Carter) since Eisenhower has played, but opponents of both major parties would attack their adversaries for time spent on the golf course as if it was something bad. George W. Bush even suspended his play during his time in Office to show his attention to task. I believe golf’s image is mis-represented, but it nonetheless makes the sport a polarizing one. As such, it will increasingly subject to greater taxation.

34. Tiger Woods, a truly multi-generational player, initiated a short-lived boom to the industry (albeit a more sustained one to television viewership) in the late 1990’s, but many discovered the game to be more challenging than he made it look and they abruptly quit in frustration. They also discovered that playing took too much time and was expensive relative to many other available endeavors. Those issues remain.

The composition of personnel happens to be the epitome of a square peg in a round hole situation as regards golf facilities. Consider that championship golf is a solitary, individual sport that attracts those comfortable playing and working on their games by themselves in solitude. Like any sport, these same youngsters hope to eventually play at the highest levels such as the PGA TOUR, but literally only a few dozen of millions actually make it. The next best thing they believe is to get a job as a golf professional at a golf facility and become a PGA member for example. While these young people (mostly white men) may have golf skills, they love the game always hoping for competitive improvement. The majority are more inclined to be introverts with many lacking the personalities or particular drive needed for the hospitality, entertainment, and service businesses that golf is. Those that do, stand out dramatically, but if, for example, someone suggests something different from a business standpoint that may require change or initiative, they will most often get that infamous “three-hundred yard stare” back from the golf professional. Unfortunately, many golf shop personnel position themselves behind a counter with their hands in their pockets and sometimes worse, are on a phone with their backs turned away from the customer. When was the last time a golf professional met you in front of a counter, greeted you and offered you a hearty handshake and hello? And have you ever tried to call a golf professional? Good luck getting a response let alone a timely one! Get my point?

If there is a bright spot in the golf horizon it is the bar-restaurant-driving range model that Top Golf (acquired by Callaway Golf) has been at the forefront in championing. It’s fun for everyone including pure novices to wack a ball, enjoy a beverage, and eat and socialize with others. The land cost and maintenance is much more attractive as well. Secondly, I look for sophisticated golf simulators to become more popular for a quick, not weather-dependent alternative to outdoor golf. That continues to be where I see golf evolving. And can money be made in golf? As in anything, opportunities exist. Exception performers will always stand out, particularly in golf. There are always opportunities for turnarounds and for selling short. However, I believe that the sustainable opportunities for scaling up and your maximizing returns compared to other investments are nil.

In looking at any industry as I have been trained to do, you have to dispassionately examine the macro aspects of it. Golf has many amazing and truly dedicated individuals creatively providing amazing service and managing costs the best ways possible. Some golf professionals are true blessings. And I would also like to point out that to serve as a capable golf professional is an exceeding challenging task — I’ve been one and worked with many; they wear so many hats! One bright segment are the Golf Course Superintendents. As a group they have been absolutely incredible in increasing and updating their knowledge and becoming really skilled, routinely providing top playing conditions for which we have become almost spoiled. What’s more, many volunteers and lowly paid staff provide a variety of wonderful efforts to include course marshaling, tournament help, maintenance, etc. Golfers are passionate about their game.

Golf provides many benefits, and many of my favorite life experiences and friends have come from golf. But as an industry, sadly I believe that golf has and will continue to have many challenges and will never graduate from an incidental “cottage industry” or lower-tier sport. Enjoy the game, but think twice before you invest any significant capital here.





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