The Pellucid Perspective - May 2017 - 14

THE LAST WORD

The winds of change...

fter a relatively stagnant news
cycle in the golf industry in recent months, last week's announcement of the long anticipated
sale of TaylorMade Golf, including the
Adams and Ashworth brands, to institutional investment group KPS Capital
Partners made a splash. It remains to
be seen just what the good folks at KPS
have in mind for the company, given that
they have no history of involvement in
any industry remotely related to golf. The
standard mutual exchanges of glee over
the match emanated from TaylorMade
Golf headquarters in Carlsbad, CA and
the KPS home offices in New York, with
KPS lauding the TaylorMade management team and the company's stature
as one of golf 's iconic brands and TaylorMade CEO David Abeles welcoming KPS's "strategic vision, operational
resources and significant access to capital." I'm guessing the "significant access
to capital" part of that equation is the
most welcome development for Abeles
and his team, after likely watching budgets tighten as parent company adidas
prepared to jettison the golf equipment
element of their business to concentrate
on their more profitable global footwear
and apparel business.
While its metalwood business, especially drivers, was largely responsible for
anyone ever applying the term "iconic" to
the TaylorMade brand, and the company
continues to lead the weekly driver count
at PGA Tour events by a wide margin,
it is perhaps indicative that the $425
Million that KPS paid for the company
falls far short of the $1.23 Billion that
Fila Korea Ltd. paid for Titleist's Acushnet parent company in 2011. (To be fair,
however, obviously the TaylorMade price
would have been much higher, perhaps
eclipsing Acushnet, if it had included the
adidas apparel brands.) It will also be interesting to see what KPS prefers to do
with the Adams Golf and Ashworth subsidiaries of the company.
It seems safe to say that the equipment side of the golf industry is in some-

14 The Pellucid Perspective

thing of a state of flux, following on the
heels of not only the TaylorMade sale
but the exit of Nike from the equipment
business and the collapse or downsizing
of several major golf retailers. Given that
most major manufacturers have maximized their clubs' capabilities within
the limits of USGA regulations conformance, it seems unlikely that manufacturers will be able to send retail prices
soaring ever higher on the wings of
claims of "revolutionary new technology," and current golf participation trends
may make significant new investment in
equipment a tough sell.
One other wind that blew, but later
changed into a passing zephyr, took place
recently when ClubCorp's Board of Directors put the word out that their worldleading collection of private clubs could
be had for the right price. Apparently
the publicly traded company got some
nibbles for portions of their portfolio, but
no takers surfaced who were willing to
swallow the whole meal at the right price.
Given that ClubCorp has grown significantly and has invested more than $800
Million in property upgrades and "reinventions" since KSL Capital purchased it
in 2006 for $1.8 Billion and subsequently
took it public, a private investor or, more
likely, investment group would have to be
hungry indeed. In the meantime, regardless of the fact that long time CEO Eric
Affeldt has announced plans to retire
once a successor is named, ClubCorp has
indicated that it will continue business as
usual, including acquisitions.
One breeze that may be gathering
impetus for graduation to wind status is,
quite frankly, nothing more than a rumor
that one industry player shared with me
recently, albeit one that seems to have
some legs. It seems that ClubCorp may
not be the only golf course portfolio that
could be had for the right price, and apparently some feelers have been extended
to potential buyers including both strategic and institutional investors. This is
known in the trade as a teaser - time will
tell.

The Players downright Masterful?
Blasphemous as it may seem, I find myself enjoying The Players Championship
almost as much, and maybe even more so,
than The Masters (gasp!). I'm not sure that
it makes any difference whether anyone
but the players themselves consider The
Players a fifth major, but the quality of the
field and perhaps even more so, the caliber
of the golf course make it seem like a major to me. Perhaps it's the fact that while
the infamous 17th hole at TPC Sawgrass
has long since become just as iconic as
the 12th at Augusta, the rest of the Ponte
Vedra course has recently changed significantly, and for the better to my taste. That
may have something to do with the fact
that I don't have to play it, but I think it's
more to the point that the pros do have to
play it, but there are a lot of ways they can
choose to do so.
The new 12th hole, for instance, is an
instant classic, reminiscent of the 10th at
Riviera. Both par 4's are easily within tee
shot range of most of the pros, but both
exact a painful penalty if someone goes
for it and goes astray. I can't wait to see
who will try to take the 12th on from the
tee as the tournament comes down to the
wire on the weekend.
The other thing that makes TPC Sawgrass so much fun to watch is the stretch
of finishing holes. Literally anything can
happen on 16-18, with good old 17 right
in the middle of it. Thursday's opening
round provided a perfect "tease" for the
weekend. Adam Scott was breezing along
in the first day lead at 6-under, while Sergio Garcia, he of the 2017 Green Jacket,
was struggling along at 4 over through
15. Presto, Sergio birdies 16, makes an
ace (!) on 17 and pars the brutal 18th to
finish a respectable 1 over. Meanwhile,
Scott, who had to follow Garcia to the
tee on 17, promptly dunked his tee shot
in the water and took a double bogey,
then did the very same thing with his
ill-advised second shot on 18. That fast,
6-under turned into 2-under for the day.
Now that, as golf goes, is must-see TV.
-Jim Dunlap

May 2017

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