• Alec Fante

This is Just Good for Golf

Updated: Apr 14


[1]

In a year that has been full of unexpected consequences, the sport of golf has been no exception. As many recreational activities shut down, slow down, or attempt to wait out the storm, golf has emerged as a safe, socially distant activity during the pandemic, with participation continuing to surge. [2] The National Golf Foundation has tracked the effects of the COVID-19 pandemic on the golf industry over the past year and come to the conclusion that people are certainly playing a lot of golf. [3] Last April, half the courses in the United States shut down and play plummeted by 42%.[4] Golf courses were, however, among the earliest recreational activities to be permitted to open back up. It soon became clear that, “golf had the potential to serve as an ideal quarantine outlet.”[5] According to Golf Datatech, from June-August 2020 there were 27 million more rounds of golf played compared to the same period the previous year. [6] Texas, Arizona, and Florida saw the greatest increase in play, up more than 30%, but every single state saw at least a 2% rise in rounds played.[7] The question is, when things are “back to normal” will these new golfers stick around? Calloway Golf and DraftKings are both counting on it.

Golf, traditionally a game which attracted a very specific, stereotypical businessman or retiree, has evolved to a sport that attracts people from all walks of life. Topgolf has been credited with some of this increased popularity, attracting people who might otherwise have no interest in the game. Sports betting is another reason the game has increased in popularity. Golf is seeing a new face; an edgier, younger face which is a group traditional golf has struggled to attract. [8] With the rise of platforms like DraftKings, fantasy golf has become big business. Much like the question of whether Topgolf will be able to turn casual players visiting the fun venue to real players on actual courses, it is unknown whether the popularity of fantasy golf will translate into real golf. The theory is that the more financial interest in the sport, the more people will watch it on TV, and ultimately, more people will be playing on actual courses. [9]

Golf never used to be part of the popular fantasy league and sports betting phenomenon. In a tongue in cheek article, author Shane Ryan explained in Golf World back in 2018 how the golf fantasy team actually works. [10] Admitting how unbelievable its popularity has become he jokes, “we understand, you and I, that golf is the last frontier of fantasy sports.”[11] DraftKings continues to capitalize on this rise in interest. On June 1 of this year, the PGA Tour approved a policy change allowing players to enter into sponsorship deals with betting operators. [12] Golf is now the 4thmost popular sport for DraftKings daily fantasy contests. US Open winner Bryson DeChambeau became the first professional golfer to prominently feature the DraftKings logo at the Masters on November 12. [13] About the partnership with Dechambeau, cofounder and CEO of DraftKings says, “as one of golf’s most promising athletes and the current US Open Champion, DraftKings is strategically aligning with winning athletes like Bryson who embody and embolden competitive fire in our customers.” [14] DraftKings is betting on DeChambeau, hoping to spark even more interest in fantasy golf. For his part, DeChambeau looks forward to the new ways fans and players can engage suggesting, “as betting is becoming more widely accepted, I think it’s a great additive to the sport.” [15]

Ahead of the Masters, DeChambeau had become the “face of DraftKing’s golf” with the betting company signing him to a multiyear deal to wear the logo on his golf cap and represent Draftkings via an integrated brand, content, marketing, and VIP-centered collaboration.[16] DraftKings has been a significant presence in golf as the official daily fantasy partner and official betting operator of the PGA tour. Says DeChambreau about the collaboration, “the gaming industry has already helped golf reach broader audiences and I am proud to work with DraftKings on boosting fan excitement and engagement in the game.” [17] According to DraftKings, its golf sportsbook handle has grown over 10 times year over year. DraftKings counts on the ongoing potential of golf in its sports betting arena and as such has teamed with DeChambeau to gain “a notable new layer of mainstream brand exposure and fan experience.” [18]

DrafKings is not the only company betting that untraditional avenues will provide a gateway into golf’s popularity. Hoping to keep up the momentum of golf playing and betting interest, Calloway has announced its intention to buy Topgolf. [19] Calloway Golf Company has witnessed a dramatic turnaround for the golf equipment business. Last April, in the midst of the COVID-19 outbreak, Calloway CEO Chip Brewer announced he would relinquish his salary as the company searched for emergency capital during the pandemic. Now, just a little more than six months later, the recovery of the golf industry has been much better than expected prompting Brewer to initiate one of the largest deals in golf business history. [20] Calloway, already holding a 14% stake in Topgolf, announced in October a $2 billion merger where it will combine with Topgolf in an all-stock transaction. As Brewer sees the merger, “this is just good for golf.”[21] Calloway’s decision to buy Topgolf is being framed as an opportunity to, “convert Topgolf visitors into real golfers and thus, ideally, Calloway equipment buyers.” [22] None of this, of course, is a sure thing and one cannot predict whether or not pandemic driven golf play will continue to feed Topgolf business. But Chip Brewer is betting that social life will get back to normal and he is also betting that non-golfers who enjoy hanging out at Topgolf’s social atmosphere can be converted into real golfers. The way he sees it, “these businesses just make sense together.”[23]

Even after the pandemic is over, Chip Brewer does not think participation will decline; he is aware of the irony in enjoying business success during the pandemic admitting, “clearly, golf has been a net benefactor in all this.” [24] Brewer thinks that when it comes to the future of Topgolf and Calloway, the trend of people wanting to have safe, social connections and the trend of increased interest in golf point to the fact that, “both of these businesses are really well positioned for the trends and reality of a COVID world and a post-COVID world.” [25] Just like the novelty of seeing DraftKings advertised on the side of a pro golfer’s hat, Brewer wants to see the Topgolf brand on tour and on the sides of hats. He plans to aggressively market Topgolf believing, “they will drive us, and we will drive them. Both sides will grow.” [26] Brewer sees Topgolf as a fun way of creating new golfers much like being a caddie used to be. There are currently 58 Topgolf establishments across the country but there are plans for 200 in hopes to make it more of a national, rather than regional, entertainment venue. [27]


This year has brought unprecedented changes to almost every area of life we take for granted. Strangely, the pandemic has created a perfect storm of circumstances to enable golf to surge in popularity. Conditions such as the lower transmission rate of the virus that comes from being outdoors, having a place to safely and distantly socialize, enjoying more time off because of working from home, having few other recreational options, long stretches of favorable weather conditions, and the fact that golf can be enjoyed as a solo sport have all come together to create interest and profit in the world of golf. [28] As Chip Brewer sums up the Calloway-Topgolf merger proclaiming, “this is just good for golf,” the same could surprisingly be said for the COVID-19 pandemic.[29] It turns out that an unforeseen consequence of an otherwise devastating scenario is that as COVID-19 continues to surge through the United States, so does the interest in playing golf.

References:

[1] Photo, https://www.gamblingsites.org/news/bryson-dechambeau-draftkings-partnership-to-debut-at-masters/


[2] Dylan Dethier, New Study Shows Shocking Effects of Coronavirus on the Golf Industry, GOLF, (September 25, 2020),https://golf.com/travel/golf-rounds-played-increase-2020-coronavirus/


[3] Id.


[4] Id.


[5] Id.


[6] Id.


[7] Id.


[8] Golf is Becoming More Popular than Ever, Thanks to Topgolf, GolfShire, (June 2, 2019),https://www.golfshirehomes.com/blog/golf-lifestyle/golf-is-becoming-more-popular-than-ever-with-topgolf/


[9] Dominic Chu, Golf Struggles in the Real World, but does Well as a Fantasy Sport, CNBC, (April 9, 2015), https://www.cnbc.com/2015/04/09/golf-struggles-in-the-real-world-but-does-well-as-a-fantasy-sport.html


[10] Shane Ryan, The Details of the World’s Best Fantasy Golf League, Previously Secret, Have Been Leaked, Golf Digest, ( February 15, 2018), https://www.cnbc.com/2015/04/09/golf-struggles-in-the-real-world-but-does-well-as-a-fantasy-sport.html


[11] Id.


[12] David Purdum, Bryson DeChambeau to Sport DraftKings Logo at Masters, ESPN, (November 2, 2020), https://www.espn.com/chalk/story/_/id/30244719/bryson-dechambeau-sport-draftkings-logo-masters


[13] Id.


[14] Id.


[15] Id.


[16] Sam Carp, Bryson DeChambeau Strikes DraftKings deal ahead of the Masters, Sports Pro Media, ( November 3, 2020), https://www.sportspromedia.com/news/bryson-dechambeau-draftkings-the-masters-sports-betting


[17] Id.


[18] Id.


[19] Daniel Roberts, Calloway’s Topgolf Acquisition is a Risky Bet Amid the Pandemic, Yahoo News, (October 29, 2020), https://news.yahoo.com/callaways-topgolf-acquisition-is-a-risky-bet-amid-the-pandemic-191136062.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANLI6eCQypkPLfqyo6d5D5cYAIjpIX4Vw975x6Nz8w7UImp724Q6Xc-L3ghSzBOhl69mmdmFFBota12mqOv17xFqDZU1-B2YaHljauvrLJeRSoHzdxxdo6f962F9ZURYNyeoHO803LkO3Ub7b9SGfmNXP8CIKTUEE0ltjN_BkBNr


[20] Mike Stachura, Calloway CEO Chip Brewer on Topgolf Merger: ‘This is Just Good for Golf’, Golf Digest, (November 2, 2020), https://www.golfdigest.com/story/callaway-ceo-chip-brewer-on-topgolf-merger-this-is-just-good-for-golf


[21] Id.


[22] Daniel Roberts, Calloway’s Topgolf Acquisition is a Risky Bet Amid the Pandemic, Yahoo News, (October 29, 2020), https://news.yahoo.com/callaways-topgolf-acquisition-is-a-risky-bet-amid-the-pandemic-191136062.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANLI6eCQypkPLfqyo6d5D5cYAIjpIX4Vw975x6Nz8w7UImp724Q6Xc-L3ghSzBOhl69mmdmFFBota12mqOv17xFqDZU1-B2YaHljauvrLJeRSoHzdxxdo6f962F9ZURYNyeoHO803LkO3Ub7b9SGfmNXP8CIKTUEE0ltjN_BkBNr


[23] Id.


[24] Mike Stachura, Calloway CEO Chip Brewer on Topgolf Merger: ‘This is Just Good for Golf’, Golf Digest, (November 2, 2020), https://www.golfdigest.com/story/callaway-ceo-chip-brewer-on-topgolf-merger-this-is-just-good-for-golf


[25] Id.


[26] Id.


[27] Id.


[28] Dylan Dethier, New Study Shows Shocking Effects of Coronavirus on the Golf Industry, GOLF, (September 25, 2020), https://golf.com/travel/golf-rounds-played-increase-2020-coronavirus/


[29] Mike Stachura, Calloway CEO Chip Brewer on Topgolf Merger: ‘This is Just Good for Golf’, Golf Digest, (November 2, 2020), https://www.golfdigest.com/story/callaway-ceo-chip-brewer-on-topgolf-merger-this-is-just-good-for-golf