Tiger to PXG?

[nja17825]

Parsons has already said that he most likely wouldn't be interested if Tiger decided on PXG. Staffing Tiger would not be too beneficial for PXG at this point.

[Shilgy]

I just bought 1,000 of these hats. Gonna be worth big bucks one day.

 

Meantime, Im lookin sharp ; )

 

You're doing it wrong. They're still in the neon hat business. It's the funky a** putter business they've gotten out of ;-)

Ya mean the ones that looked like a Cameron that looked like a Ping?

[jmck]

They broke the mold when they made this one:

 

[Shilgy]

^^ Ping Doc17 was worse lol. But that is bad imo.

[jmck]

The Doc17 was indeed brutally ugly, but at least they managed to make it symmetrical. Let's give credit where credit is due.

 

There are worse out there too:

 

http://www.golfwrx.com/forums/topic/385469-got-an-ugly-putter-lets-see-it/

 

http://www.golfwrx.com/forums/topic/408950-top-five-ugly-terrible-putters-ever-made/

 

http://www.golfwrx.com/forums/topic/696936-the-ugly-putter-thread/

 

And there are worse color combos available on that Nike above. I just grabbed the one with the marketing because it's absolutely fantastic: "Nike Method. The face of CONFIDENCE."

[drn92]

A few of the noteworthy things from the article:

• Parsons envisioned a scenario where Nike was paying a PGA Tour player $7 million to use its clubs and wear its apparel and shoes.
  
• With Nike out of the golf equipment business, he said he could pay the player $3-4 million to use PXG clubs, with Nike paying $2-3 million for the player to wear its apparel and shoes.
  
• Parsons said he fielded more than 30 phone calls from players affected by Nike’s decision. He’s open to adding 4, 5, 6 or even more endorsees to the PXG roster.
  
• Parsons sees endorsement deals shrinking, but offering greater flexibility in terms of how many of the sponsor’s products golfers must use
  
• Parsons also sees PGA Tour players and their agents getting more creative with endorsement deals, relying less on golf equipment businesses for revenue. “You could see a lot more hats that say ‘Phil’s Steakhouse,’ or something like that”
  

It all seems to make sense, there are already a ton of guys who seem to be following this path that Parsons is talking about.

 

My struggle with PXG is he already has a few players under contract and would need to sell an insane number of clubs to break even. Even if he is worth $1B+, the math is tough to work out.

 

For example ... Rory wants $5MM per year for clubs. PXG makes $2700 on a set of clubs ($3k less $300 in raw materials). To just break even on Rory PXG needs to sell 1850 sets of clubs. That doesn't include the salaries for R&D, sales, distribution and freight, and other associated costs.

 

Multiply Rory by the number of other players (even at lower annual contracts) and there is no way PXG is selling 20,000 sets of clubs every year just to break even. And, most rich billionaires didn't get rich by losing money.

 

drn92

[drn92]

Did TW play Ping Eye 2's as an am????

 

I would bet that 50% of players had Eye2's at some point.

 

At least anyone older than 35.

 

drn92

[llewol007]

Why would Parsons invest in a player who is not shown during tournaments this day in age. It is all about publicity and if you want somebody to show how well your clubs can perform, than go with somebody other than Tiger. Tiger is injured and not even sure he will get back to the competitive level he would like to be at. So rather than playing in smaller tournaments, he would much rather fully heal up which he might never be, and play the big tournaments and either bow out due to a reinjury or not play well enough to matter. Parson is rich but so is Tiger, if Tiger was smart, he would go back to Titliest or even Mizuno to that matter. Tiger does not need money and he sure as heck does not need Pxg.

[EKELLY]

A few of the noteworthy things from the article:

• Parsons envisioned a scenario where Nike was paying a PGA Tour player $7 million to use its clubs and wear its apparel and shoes.
  
• With Nike out of the golf equipment business, he said he could pay the player $3-4 million to use PXG clubs, with Nike paying $2-3 million for the player to wear its apparel and shoes.
  
• Parsons said he fielded more than 30 phone calls from players affected by Nike's decision. He's open to adding 4, 5, 6 or even more endorsees to the PXG roster.
  
• Parsons sees endorsement deals shrinking, but offering greater flexibility in terms of how many of the sponsor's products golfers must use
  
• Parsons also sees PGA Tour players and their agents getting more creative with endorsement deals, relying less on golf equipment businesses for revenue. "You could see a lot more hats that say 'Phil's Steakhouse,' or something like that"
  

It all seems to make sense, there are already a ton of guys who seem to be following this path that Parsons is talking about.

 

My struggle with PXG is he already has a few players under contract and would need to sell an insane number of clubs to break even. Even if he is worth $1B+, the math is tough to work out.

 

For example ... Rory wants $5MM per year for clubs. PXG makes $2700 on a set of clubs ($3k less $300 in raw materials). To just break even on Rory PXG needs to sell 1850 sets of clubs. That doesn't include the salaries for R&D, sales, distribution and freight, and other associated costs.

 

Multiply Rory by the number of other players (even at lower annual contracts) and there is no way PXG is selling 20,000 sets of clubs every year just to break even. And, most rich billionaires didn't get rich by losing money.

 

drn92

Agree 100%. Tiger never translated to clubs sales, neither did Rory. Duval even had his glory years with Titleist.......Other than Tiger, and whoever actually made his clubs, Nike never took off. PXG is like a Ferrari, even those loaded with money think they are too expensive. I've never hit them, but i don't believe they are THAT much better, if any at all.........I thought the Nike stuff was okay, so I'm not a hater........

[Shilgy]

A few of the noteworthy things from the article:

• Parsons envisioned a scenario where Nike was paying a PGA Tour player $7 million to use its clubs and wear its apparel and shoes.
  
• With Nike out of the golf equipment business, he said he could pay the player $3-4 million to use PXG clubs, with Nike paying $2-3 million for the player to wear its apparel and shoes.
  
• Parsons said he fielded more than 30 phone calls from players affected by Nike’s decision. He’s open to adding 4, 5, 6 or even more endorsees to the PXG roster.
  
• Parsons sees endorsement deals shrinking, but offering greater flexibility in terms of how many of the sponsor’s products golfers must use
  
• Parsons also sees PGA Tour players and their agents getting more creative with endorsement deals, relying less on golf equipment businesses for revenue. “You could see a lot more hats that say ‘Phil’s Steakhouse,’ or something like that”
  

It all seems to make sense, there are already a ton of guys who seem to be following this path that Parsons is talking about.

 

My struggle with PXG is he already has a few players under contract and would need to sell an insane number of clubs to break even. Even if he is worth $1B+, the math is tough to work out.

 

For example ... Rory wants $5MM per year for clubs. PXG makes $2700 on a set of clubs ($3k less $300 in raw materials). To just break even on Rory PXG needs to sell 1850 sets of clubs. That doesn't include the salaries for R&D, sales, distribution and freight, and other associated costs.

 

Multiply Rory by the number of other players (even at lower annual contracts) and there is no way PXG is selling 20,000 sets of clubs every year just to break even. And, most rich billionaires didn't get rich by losing money.

 

drn92

The every year might be an issue, but not this year. I am guessing they are well over that already. I know of 6-10 in my little part of the world.

[jffuller]

Anecdotal evidence does not suggest a larger trend.

 

They've been in hard goods for ~15 years and have gone from 0 to 1 to 2 to 3% market share. Who knows what exactly they were originally projecting, but given that they just announced they're getting out of hard goods I reckon it was more optimistic than 3% after 15 years.

 

I agree with you, but my comments are in regards to shoes, where they are one of the top two companies. Just because they aren't seen at one course doesn't mean they're not popular elsewhere. They're an established shoe and apparel company.

[drn92]

A few of the noteworthy things from the article:

• Parsons envisioned a scenario where Nike was paying a PGA Tour player $7 million to use its clubs and wear its apparel and shoes.
  
• With Nike out of the golf equipment business, he said he could pay the player $3-4 million to use PXG clubs, with Nike paying $2-3 million for the player to wear its apparel and shoes.
  
• Parsons said he fielded more than 30 phone calls from players affected by Nike’s decision. He’s open to adding 4, 5, 6 or even more endorsees to the PXG roster.
  
• Parsons sees endorsement deals shrinking, but offering greater flexibility in terms of how many of the sponsor’s products golfers must use
  
• Parsons also sees PGA Tour players and their agents getting more creative with endorsement deals, relying less on golf equipment businesses for revenue. “You could see a lot more hats that say ‘Phil’s Steakhouse,’ or something like that”
  

It all seems to make sense, there are already a ton of guys who seem to be following this path that Parsons is talking about.

 

My struggle with PXG is he already has a few players under contract and would need to sell an insane number of clubs to break even. Even if he is worth $1B+, the math is tough to work out.

 

For example ... Rory wants $5MM per year for clubs. PXG makes $2700 on a set of clubs ($3k less $300 in raw materials). To just break even on Rory PXG needs to sell 1850 sets of clubs. That doesn't include the salaries for R&D, sales, distribution and freight, and other associated costs.

 

Multiply Rory by the number of other players (even at lower annual contracts) and there is no way PXG is selling 20,000 sets of clubs every year just to break even. And, most rich billionaires didn't get rich by losing money.

 

drn92

The every year might be an issue, but not this year. I am guessing they are well over that already. I know of 6-10 in my little part of the world.

 

I still do not believe the numbers work out. Let's say there are 25MM golfers in the US. PXG is targeting the top of the market ... Let's be conservative and say the top 10%, or 2.5MM golfers. Of those, maybe 25% get new clubs each year (probably high, but maybe). That would equal 625k sets of clubs sold each year. I do not think that PXG can get to a 3-5% market share to get the revenue they need to break even. There are ten other manufactures fighting for that space.

 

Those numbers may be way high. There may only be 10MM "core" or "avid" golfers in the US. Top 10% = 1MM. 15% replace clubs annually (that they pay for), leaving 150k sets of clubs sold annually. I do not see PXG getting a 10-15% share of that market.

 

I am sure they make awesome stuff. I dig the industrial look and the evolution of the Ping design. Even if our ffamily income was greater than the average golfer, there is no way I am dropping that kind of coin for a set of clubs. First, I have way too much fun "hunting" for deals to pay full retail. Second, I am a Ping guy and can find dozens of sets that are my specs on eBay for 25% of the cost of new Pings (or 10% the cost of PXG's). Third, I have other stuff to spend my hard earned cash on, namely biking and skiing.

 

I hope I am wrong and do not have the full picture of the market size and market opportunity. I wish PXG the best of luck. But when you look at them building a stable of athletes (PGA, LPGA, Champions Tour) and shelling out $25MM+ annually just for endorsements they better hope the market is there.

 

drn92

[Shilgy]

A few of the noteworthy things from the article:

• Parsons envisioned a scenario where Nike was paying a PGA Tour player $7 million to use its clubs and wear its apparel and shoes.
  
• With Nike out of the golf equipment business, he said he could pay the player $3-4 million to use PXG clubs, with Nike paying $2-3 million for the player to wear its apparel and shoes.
  
• Parsons said he fielded more than 30 phone calls from players affected by Nike’s decision. He’s open to adding 4, 5, 6 or even more endorsees to the PXG roster.
  
• Parsons sees endorsement deals shrinking, but offering greater flexibility in terms of how many of the sponsor’s products golfers must use
  
• Parsons also sees PGA Tour players and their agents getting more creative with endorsement deals, relying less on golf equipment businesses for revenue. “You could see a lot more hats that say ‘Phil’s Steakhouse,’ or something like that”
  

It all seems to make sense, there are already a ton of guys who seem to be following this path that Parsons is talking about.

 

My struggle with PXG is he already has a few players under contract and would need to sell an insane number of clubs to break even. Even if he is worth $1B+, the math is tough to work out.

 

For example ... Rory wants $5MM per year for clubs. PXG makes $2700 on a set of clubs ($3k less $300 in raw materials). To just break even on Rory PXG needs to sell 1850 sets of clubs. That doesn't include the salaries for R&D, sales, distribution and freight, and other associated costs.

 

Multiply Rory by the number of other players (even at lower annual contracts) and there is no way PXG is selling 20,000 sets of clubs every year just to break even. And, most rich billionaires didn't get rich by losing money.

 

drn92

The every year might be an issue, but not this year. I am guessing they are well over that already. I know of 6-10 in my little part of the world.

 

I still do not believe the numbers work out. Let's say there are 25MM golfers in the US. PXG is targeting the top of the market ... Let's be conservative and say the top 10%, or 2.5MM golfers. Of those, maybe 25% get new clubs each year (probably high, but maybe). That would equal 625k sets of clubs sold each year. I do not think that PXG can get to a 3-5% market share to get the revenue they need to break even. There are ten other manufactures fighting for that space.

 

Those numbers may be way high. There may only be 10MM "core" or "avid" golfers in the US. Top 10% = 1MM. 15% replace clubs annually (that they pay for), leaving 150k sets of clubs sold annually. I do not see PXG getting a 10-15% share of that market.

 

I am sure they make awesome stuff. I dig the industrial look and the evolution of the Ping design. Even if our ffamily income was greater than the average golfer, there is no way I am dropping that kind of coin for a set of clubs. First, I have way too much fun "hunting" for deals to pay full retail. Second, I am a Ping guy and can find dozens of sets that are my specs on eBay for 25% of the cost of new Pings (or 10% the cost of PXG's). Third, I have other stuff to spend my hard earned cash on, namely biking and skiing.

 

I hope I am wrong and do not have the full picture of the market size and market opportunity. I wish PXG the best of luck. But when you look at them building a stable of athletes (PGA, LPGA, Champions Tour) and shelling out $25MM+ annually just for endorsements they better hope the market is there.

 

drn92

Nike had what, 3% of the market? And yes, they had balls and bags in there but did $706m in the last fiscal year. So you might be underestimating the market. And all of these brands sell outside the US as well.

[drn92]

I might be underestimating the market, but I bet at least $600MM of the Nike revenue was clothing and shoes, and maybe golf balls. All items that PXG does not have. Every trade show I attend about half of the people are wearing a Nike golf shirt with company logos embroidered.

 

However, if we take the US market and multiply it by 5x for a global market, but only increase the sponsorship dollars by 2x to reflect an overall lower level of investment (and cost for many overseas markets ... and potentially offsetting dollars from a clothing, bag, hat, etc. contract), then I could see PXG making a go of it.

 

I still think a US only model does not work, but if they can scale globally and keep the endorsement dollars reasonable they may turn a profit.

 

drn92

[nsxguy]

Why pay a guy not to play?

 

Isn't Nike still paying Michael ?

[Cwing]

I don't see Tiger playing anything but a forged club with tons of feel. That's not pxg..

[Guia]

I doubt that Tiger would start his own Golf Company, Nicklaus' had limited success with Golden Bear Clubs. Up and coming new golfers don't identify with Tiger the way players did 1 or 2 generations ago.

 

Tiger will sign with someone, I don't think it will be PXG, I don't think Titleist can afford him. I would think it will be a Japanese company with deep pockets. I don't think too many companies will be knocking down his door, his marketability is waining. Should be interesting.

[Shilgy]

I doubt that Tiger would start his own Golf Company, Nicklaus' had limited success with Golden Bear Clubs. Up and coming new golfers don't identify with Tiger the way players did 1 or 2 generations ago.

 

Tiger will sign with someone, I don't think it will be PXG, I don't think Titleist can afford him. I would think it will be a Japanese company with deep pockets. I don't think too many companies will be knocking down his door, his marketability is waining. Should be interesting.

Even the guys gust getting started grew up idolizing Tiger. Think about it. A typical 22 year old just getting started at professional golf was aged 5 to 15 in Tiger's prime. That is the age level heroes are chosen.

[Guia]

That could be, but Pro's aren't buying the clubs. This generation is strong on Rory, Jordan, and Day, I think they will have a bigger influence than Tiger. New hero's have been made. Now, don't get me wrong I am a Tiger Fan, IMHO, he is the best that has ever played the game. I would love to see him win often again, but odds are against it, and winning is what it takes to sell clubs.

 

Tiger, like MJ, is/were the biggest in sports, and both have gone more popular than their sport, and none of the current players have their charisma. However, they are in the rear view mirror.

[Lancj1]

Tiger will purchase the Lynx name from ailing GolfSmith for $99, and introduce a new line of "Big Cat" clubs, including but not limited to:

 

"Feral Cat" for the junkyard dog players.

"Bengal Tiger" for those who think they are great.

"Kitty" line for juniors.

"pu$$y" line of low compression balls for slower swing speeds.

"Navy Seal" ball retrievers.

 

(feel free to add your own ideas)

 

Alley Cat, for, well, you know...

[ats200]

This is a long shot in the dark with no target but no one has mentioned Hogan despite how well reviewed they've been and how clean their design is. Probably no money there but who know's what Tiger's motivation is anymore.

 

For Rory, I wouldn't be shocked if he considered Cobra because both he and Ricky have similar tastes in terms of bright colors, etc. He's not going to get that from PXG, Titleist, or Mizuno.

[Guia]

In order for any company who sign a SuperStar to make money they must build many products around him/her. The sale of clubs alone will not support the cost of their endorsement.

 

I assume that Nike will continue to make the Tiger Woods line of apparel, if so what company would realize a profit from the sale of clubs only by signing Tiger to a multimillion dollar club deal. For those top Pro's playing Nike equipment I would assume they will not receive the huge sum of money with another sponsor.

 

I say all of this with limited knowledge of how to market these stars. Who besides Nike (who has a very broad base) could afford a $100 million contract? There must be some kind of deal to restructure these immense contracts or to buy them out. Two weeks notice and 3 months severance :stink:

[starsail85]

Maybe Nike pulled out because tiger isn't coming back?

[EKELLY]

Ok hear me out before tossing me off the boat:

 

Bob Parsons is a former military man, and we all know Tiger is obsessed with the Seals. So much so that he actually did military training and there were even rumors of him giving up golf to enlist (never happened obviously).

 

Bob Parsons also is a very rich man, and potentially would throw as much money at Tiger as needed to sign him. Imagine how many people would buy PXG if Tiger was on their staff of tour players?

 

Lastly, Titleist is the only other club manufacturer that I think suits Tiger, and they are notorious for not paying their staffers as well as other companies.

 

Thoughts? Doesn't sound as crazy as many would think imo.

If a Seal couldn't swim he wouldn't be desired by the Navy, or be a Seal at all........Tiger isn't Tiger anymore, or did some people not get the memo.......Parson's is NOT going to give $$$ away without a return in sales. He's already said, "Tiger's career is up in the air"....lol......

[Strike Force]

Maybe Nike pulled out because tiger isn't coming back?

 

It doesn't matter if Tiger tries to come back or not, he won't be a competitive factor...any more than [say] David Duval is now when he plays.

[DatSliceDoe]

Tiger won't go to PXG if he ever comes back. They would have to make a one off club for him with no screws. He's a simple looks kind of player.

[hogans71]

Why pay a guy not to play?

 

Isn't Nike still paying Michael ?

 

Have you seen the amount of, air Jordan shoes/apparel people are wearing these days?

[dunn]

Tiger plays musclebacks, pxg isn't that type of iron.....

[dlygrisse]

Tiger plays musclebacks, pxg isn't that type of iron.....

 

His most recent set of Nike irons are not true muscle backs.

[Strike Force]

PXG Interested in Rory McIlroy but Not Tiger Woods