The Pellucid Perspective - November 2015 - (Page 7)

golf participation NGF Suggests that 30M Golfers Was "A Bubble" By Jim Koppenhaver t he 30M participants high-water mark we hit in 2002 turns out to be a case of "irrational exuberance" rather than "intentional expansion" according to our friends in Jupiter, FL as reported in the last issue of Golf Inc. magazine. While it's physically impossible to read everything that's published regarding the business side of golf, the wonder of the internet and my pesky curiosity mean that I probably consume at least 70-80% of the facts and opinions that are published annually in our trade publications and the general media. Helping me is the fact that there are several hundred Pellucid eyes and ears that also almost immediately funnel back to me when they come across anything information or research-related. (Case in point, I received several copies recently of the GolfNow survey solicitation trying to pry positive responses from golfers on a range of topics relating to the use of internet teetime booking sites). At the confluence of this constant stream of industry information, I see everything from the sublime to the ridiculous. Weighing in at the lower end of the scale recently was this little nugget tucked away in the Front 9 section of Golf Inc. Magazine's Fall edition: No. 7 Did golf experience a bubble? U.S. golf participation may not be in a free fall after all, according to the National Golf Foundation. Rounds in the U.S. are up 2.2 percent and revenue is up 3.3 percent, according to PGA PerformanceTrak. The NGF reports that golfers have leveled off in the 24.5 million to 25 million range, which is 5 million less than at the height in 2005. However, NGF suggests that the 30 million golfer level may have been a bubble caused by four factors: unprecedented interest in Tiger Woods; master-planned communities being overbuilt; an unnatural spike in homeowner equity; and a stock market at an all-time high. NGF thinks the extra golfers may have not have been committed core golfers. That would mean participation has fallen back to normal, where it was 20 years ago, and will likely not fall further. Wow, where does one start to argue with this line of logic? Let's start with some facts: * Depending on whose numbers you ascribe to, we've lost 5-7M golfers since 2002 when the industry flirted with engaging 30M participants. If we take 6M as the "defectors" figure for fun, that means we've lost 20% of our consumer base over 13 years. While I probably wouldn't classify that as a "free fall," it definitely is at least a bear market. While NGF makes the case that the Compound Annual Growth Rate (CAGR) is shallowing in its negative magnitude, we've encountered several of these "shelfs" on the way down which ultimately have turned out to be just pauses in the continuing downward trend. While neither NGF nor Pellucid knows empirically what happens from this current "shallowing" phase, history would support a better than www.PellucidCorp.com 50/50 chance that we're not done yet. * The interesting argument from NGF is that we've chased away all the "fair weather friend" participants so that's what provides the support point and insulates the industry from further decline. I guess this is one way of avoiding the inconvenient question that Pellucid or other intelligent observers ask each time the industry trade associations say, "It's going to turn around this time" which is, "What is the catalyst, either in industry programs, marketing or consumer behavior, that underpins a trend reversal? (either in rounds or participants)." There isn't an answer here because the argument isn't that we're going to grow, it's just that we've lost all the people that we're going to lose. Their support to this argument is that each year we're more and more reliant on our core golfers and they won't leave us, it's just those "flakes" who only play a couple times a year who can't be counted on to be loyal to our sport. * So, now 25M golfers becomes the "old normal" and we should reset our expectations and put what's happened behind us as just the consumer bubble bursting and all those former golfers should be written off as not truly "worthy of our sport." Anyone besides me see the irony and near lunacy in this revisionist history attempt? On the way up, we welcomed all these newcomers to the sport and professed that we were going to make them all average involvement participants. Now we're willing to just write off their departure as "a bubble." This is part of the challenge of the industry as a whole. Our mindset continues to be, "This is our game, we think it's great, we'd love to have you but, if you don't like it the way it is, then you should go play [insert alternate sport of choice]." In this respect, Donald Trump and Joe Beditz are two peas in a pod in their opinion that golf should be aspirational and as much a status symbol as a sport. Sorry, but I'm not there. (By extension, I guess that means I'm not the next Republican presidential candidate or the next NGF CEO). So what's the answer? I think there's possibly a way for multiple opinions and approaches to co-exist going forward. For the traditionalists, we do need to maintain focus on our Core golfers who pay the bills and provide the solid foundation beneath our sport. They like the way the sport is, they relish its challenge and they do view it as a symbol of achievement that they've been able to acquire some mastery of the game. Fine, we'll call that "competitive golf " and we just keep doing what we're doing to keep them happy. For the rest of the population, we acknowledge and nurture the concept and game of "recreational golf." In recreational golf, we don't have conforming equipment, you use whatever an equipment manufacturer can invent that's a The Pellucid PersPecTive 7 http://www.PellucidcorP.com

Table of Contents for the Digital Edition of The Pellucid Perspective - November 2015

TOC
Payment processing again – Have you inserted your chip card?
Members lose club over gender discrimination suit
NGF Suggests that 30M Golfers Was “A Bubble”
IBM buys parent of The Weather Channel: Why you should pay attention
Beverage cart really a goose laying golden eggs?
October golf weather impact: Neutral nationally, tough for Texas
Boston needs some ‘deflation’ in supply
Singing the blues in Memphis

The Pellucid Perspective - November 2015