The Pellucid Perspective - April 2021 - 4

INDUSTRY EVENTS

post-merger Callaway have emphasized the synergy between
non-traditional golf activity and its potential to boost traditional golf interest; we have yet to see those results. As we have
pointed out previously; TopGolf has exposed over 20 Million
non-golfers to hitting golf balls to targets over the last 5 years
with little or no increased traditional golf participation - at
least until we see what happened to participation in 2020.
We got a sneak peak into the National Sporting Goods
Association's annual recreational survey results this week. The
NSGA found that we added about 2.1 Million new golfers in
2020. We haven't seen the hard data yet, so we don't know the
dispersion of " single round " players vs. those that played 2 or
more times; but we do know that the number of " single round "
players has been fairly consistent between 2.5 and 3.5 Million
for the past 20 years. Golf has not had a problem attracting
players - it has a problem keeping them and moving them up
the engagement ladder.
One of the questions regarding the merger was that the
pandemic forced closure of TopGolf facilities for several
months caused their lenders to require capital infusions from
TopGolf 's equity investors. There was speculation that this led
to Callaway's need to protect the value of the 14% share of
TopGolf they already owned. As we said in November, the
merger had some evidence that it was ultimately a " shotgun
wedding. "

More importantly, the 2.1 Million new golfers quantified
by the NSGA is at the low end of what Jim Koppenhaver and
I estimated in our State of the Industry in February. We'll
have to wait for the details, and this probably means that our
reliance on " avid " golfers is bigger than ever; but my question
for today is " if TopGolf was shuttered for several months, and
they do, in fact help traditional golf participation - should that
increase have been larger? " To be fair, it could also be possible
that the 50% of TopGolf visitors that are already traditional
golfers used their time and money to play more traditional
golf and contributed to the rounds demand bonanza in 2020.
As I say, it will be very interesting to see what happens in
2021. Callaway results on both the equipment and TopGolf
sides of the equation should be a good barometer.
In one for the memory banks, my 19 year old daughter
asked me to take her to our club's range for the first time since
she was 10 and doing Junior Golf. She started getting interested again last year after an 8 year detour into high level soccer
that took her to an IMG National Finals in Sarasota and playing tennis on a team that won 4 consecutive state titles. Some
of her friends and the pandemic got her back and she's been to
the local public range a bunch of times. She was also fresh off
a TopGolf excursion with one of her buddies in Chicago. She
texted me a picture of playing Angry Birds using TopTracer -
complete with a Geico ad on the monitor.

The Golf Club at Lansdowne
Lansdowne, Virginia

DISC OV ER

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4 The Pellucid Perspective

Cheyenne Woods
Team Troon

April 2021

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The Pellucid Perspective - April 2021

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