Golf is seeing hard times just like the financial markets and every other industry known to man.
For some, its amazing to think golf is still a priority. For others, who know what golf is capable of, they know its just a matter of time until things all flip sunny side up again.
Its the truth, once people start playing golf, our country and the world is going to be sitting a whole lot more pretty than ever before.
The following article by GOLFWEEK's Senior Writer, BRADLEY S. KLEIN, will teach you a thing or two about the financial market and its impact on the golf industry.
Go For it and Never Quit Tee'in It Up
WALL STREETS's WOES COULD SADDLE GOLF
By BRADLEY S. KLEIN
Senior Writer
From his perch in a clubhouse across New York harbor from Wall Street, Jim Coady has a wonderful view of downtown Manhattan. However, the secretary of Bayonne (N.J.) Golf Club isn’t exactly enjoying the outlook. That’s because his waterfront course, an upscale private club, caters to a New York business community that, like the rest of the country’s financial and banking community, is being shaken to the core.
It’s too early to predict the fallout from last week’s news that Lehman Brothers filed for bankruptcy, Merrill Lynch was being sold to Bank America and the government would bail out AIG. An early stock-market plunge was followed by signs of market recovery, but continuing uncertainty on Wall Street could affect several sectors of the golf industry, including tournament sponsorships, course development and club operations.
“We have a big financial-services component to our membership,” Coady said. “We have some people who have lost their jobs recently but very few resignations. Some people are paralyzed. Decision-making is slow. Everybody has got it on their mind.”
Aside from comprising the rank-and-file of numerous New York metropolitan-area clubs, financial institutions are major supporters of championship golf.
According to Jon Podany, the PGA Tour’s senior vice president of business development, current commitments from such sponsors include Barclays, Deutsche Bank, FBR, Morgan Stanley, Northern Trust, Royal Bank of Canada, Stanford Financial, Travelers, UBS (Players Proud Partner), U.S. Bank, Wachovia and Zurich. Fortunately for the Tour, no imminent departures are expected.
“Nearly 75 percent of our agreements with financial firms are through 2012 or beyond, which is a pretty strong position,” Podany wrote in an e-mail response to a Golfweek inquiry. The sole event without a definitive sponsor commitment beyond 2009 is the U.S. Bank Championship in Milwaukee. Podany added “no sponsors have asked to get out of a contract.”
Meanwhile, a Merrill Lynch spokesperson said “there are no plans to change the sponsorship” of its Merrill Lynch Shootout. The event, hosted by Greg Norman, is in the third year of a five-year contract that expires in 2010.
Gary Stevenson, an executive in the consulting division of Wasserman Media Group and a close observer of golf sponsorships, said “I don’t think you’re going to see a huge exit, at least in the short term.”
Stevenson said golf events remain an attractive opportunity. “Any marketer will tell you that during a down market like this, that’s when you can grab market share.”
With much of the financial crisis due to shaky mortgage-lending practices, golf-related real estate likely will be one of the slowest industry sectors to recover.
Many Sunbelt golf communities already suffer from a glut of homes for sale. A tightening credit crunch means new development projects can’t get under way.
“Golf was always the red-headed stepchild of the real-estate-finance industry,” said Larry Hirsh of Golf Property Analysts Inc. “Now it’s going to be even more of a stepchild.”
Industry analysts also caution that golf, as a discretionary recreation, is vulnerable to cutbacks in consumer spending. Retirees and senior citizens, in particular, who draw upon a fixed income and are protecting their nest eggs could cut back on rounds played.
– Dan Mirocha and Adam Schupak contributed.
• • •
Bradley S. Klein is a Golfweek senior writer. To reach him e-mail bklein@golfweek.com.
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