Why are purses increasing?

bladehunter · June 23, 2017

I dont understand when ppl say golf is dying. If I don't make my tee time for the weekend on like Wednesday, every course around me is booked solid. Any weekday after 3pm every course is jammed with leagues. If I drive to my local golf shop on a sunny day to check out equipment I have to park across the street at the range because the shop is so busy. I could keep going but I think you get the point...

i agree with you.. its this way in my home town too.... you cant even just walk into a muni during the week and get on before noon.. and our green grass shop thats been here since 1974 is never not running over... parking lot holds 40 cars or so and is rarely not near full....

I think maybe that the pundits that spout this are in with the oems and what they mean by "'dying" is that it isnt growing at the Tiger rate... well duh... but who cares ?

thug the bunny · June 23, 2017

I dont understand when ppl say golf is dying. If I don't make my tee time for the weekend on like Wednesday, every course around me is booked solid. Any weekday after 3pm every course is jammed with leagues. If I drive to my local golf shop on a sunny day to check out equipment I have to park across the street at the range because the shop is so busy. I could keep going but I think you get the point...

i agree with you.. its this way in my home town too.... you cant even just walk into a muni during the week and get on before noon.. and our green grass shop thats been here since 1974 is never not running over... parking lot holds 40 cars or so and is rarely not near full....

I think maybe that the pundits that spout this are in with the oems and what they mean by "'dying" is that it isnt growing at the Tiger rate... well duh... but who cares ?

I agree, but probably 50% of WRXs insist that it is dying, and will come up with all kinds of numbers to support that position..

klebs01 · June 23, 2017

I don't think anybody here can give you an explanation unless they are involved in the Tour. Everyone else is just speculating
You are kidding right? Basic business model....make more money and find accounting transaction on books indicating you are writing it off. Corporate tax structure in the country is idiotic...

This too. Most of the tournements are run by 501©(3) offshoots of Corporations as charities and the purses are written off, even though they are "really" advertising dollars.

Sounds pretty smart to me

Marketing expense is tax deductible as an ordinary business expense. There is no additional tax benefit for sponsoring companies because of the tournament's nonprofit status. I really think 90% of people don't understand what a write off is or what it actually means.

bmaas03 · June 23, 2017

I dont understand when ppl say golf is dying. If I don't make my tee time for the weekend on like Wednesday, every course around me is booked solid. Any weekday after 3pm every course is jammed with leagues. If I drive to my local golf shop on a sunny day to check out equipment I have to park across the street at the range because the shop is so busy. I could keep going but I think you get the point...

i agree with you.. its this way in my home town too.... you cant even just walk into a muni during the week and get on before noon.. and our green grass shop thats been here since 1974 is never not running over... parking lot holds 40 cars or so and is rarely not near full....

I think maybe that the pundits that spout this are in with the oems and what they mean by "'dying" is that it isnt growing at the Tiger rate... well duh... but who cares ?

I agree, but probably 50% of WRXs insist that it is dying, and will come up with all kinds of numbers to support that position..

Because anecdotes don't equal data.

c7015 · June 23, 2017

1) inflation

2) golf is not exactly dead or dying but it makes for a great story ( be careful how you interpret those stats, maybe not as many new golfers but it does not mean the void is not being filled by the existing ones)

3) marketing & demographic factors ... nobody says yeah let's close this deal with a game of hoops ... business is done on the golf course so it is still a fairly lucrative market to advertise and connect with regardless of the fact that it may not be growing at the pace it was with Tiger. It is (may always be) highly saturated with high net worth customers making it highly sought after market to advertize in.

JoeyD12 · June 23, 2017

Pretty easy anwser actually One only has to research the current deal that was struck between a few years ago by Finchem & Co with the network coverage outlets. In those deals it was reported that purses were still set to increase on a yearly basis, albeit by a smaller margin than in the Tiger Prime era. This was all made public when it happened and really isn't a secret

The USGA got a crapload of money by Fox for it's coverage, The PGAoA has always been a high purse Major.

So whether participation or viewership is dying or not is irrelevant at the moment. The deal has been made.

^^^^ This. Every televised sport has bigger television contracts now than they ever had before. This is the real reason why they play for what they play for, regardless of whether or not Tiger is playing.

Hattie Pants · June 23, 2017

I don't think anybody here can give you an explanation unless they are involved in the Tour. Everyone else is just speculating
You are kidding right? Basic business model....make more money and find accounting transaction on books indicating you are writing it off. Corporate tax structure in the country is idiotic...

This too. Most of the tournements are run by 501©(3) offshoots of Corporations as charities and the purses are written off, even though they are "really" advertising dollars.

Sounds pretty smart to me

Marketing expense is tax deductible as an ordinary business expense. There is no additional tax benefit for sponsoring companies because of the tournament's nonprofit status. I really think 90% of people don't understand what a write off is or what it actually means.

Sounds pretty smart to me

NevinW · June 23, 2017

Golf isn't dying.

QuigleyDU · June 23, 2017

Good question. Looking just at the thread title, I was about to reply sarcastically 'but I thought golf was dying'. If golf participation is dying, then tournament viewership should also be declining (I never ever watched golf until I started playing), which means sponsorship should also decline. Makes no sense. Let's wait for the explanations to roll in.

My thoughts are the 'golf is dying' numbers are contrived. By whom? Hmmmmm.....

i have said it many times. Golf is not dying. every course i go to is busy, and takes forever to play a round. it is just golf equipment sales are declining as i think that consumers have gotten savvy and are not purchasing equipment as much and they are tired of the constant release and attacks on their wallets. that is my opinion.

Vindog · June 23, 2017

This thread remindss me of a topic not to long ago, maybe a year or so, where a poster was adamant that if golf stopped being televised then the game would be DEAD in 4 years or less.

I nearly fell out of me knickers.

Vespar · June 23, 2017

Unfortunately, golf is dying. Less people play and less people watch every year. So on an economic level, can someone explain to me why purses continue to go up?

simple, the purses have gone up due to sponsorship...btw many of the sponsorships cater to a much older audience, like insurance, Viagra, health care, luxury automobiles, brokerages and business software. The 20 & 30 year olds are fairly broke when it comes to expendable income.

Here is another analogy I love watching hockey, especially the stanley cup finals. I have not skated in decades, no longer own a hockey stick or skates and have no desire to go skating....may people are like this concerning watching golf

Vespar · June 23, 2017

Good question. Looking just at the thread title, I was about to reply sarcastically 'but I thought golf was dying'. If golf participation is dying, then tournament viewership should also be declining (I never ever watched golf until I started playing), which means sponsorship should also decline. Makes no sense. Let's wait for the explanations to roll in. My thoughts are the 'golf is dying' numbers are contrived. By whom? Hmmmmm.....
i have said it many times. Golf is not dying. every course i go to is busy, and takes forever to play a round. it is just golf equipment sales are declining as i think that consumers have gotten savvy and are not purchasing equipment as much and they are tired of the constant release and attacks on their wallets. that is my opinion.

No one is saying its dead, but the growth has been pretty much a flat line. Many courses have closed- that may explain the busy prospects in your area. Over 400 courses have closed, not resold, not transfer of ownership...CLOSED. Many of these were public, many were munis. These courses are the life blood of future growth of younger golfers. If your local course(s) are busy, thats great, BTW are they multi use facilities ( country clubs) ??

If business is so good when was the last non ultra rich private course/club opening in your area?. I just checked my area, in the entire state and neighboring state in the past 3 years only one new public course has opened- and its 9 holes.

As far as manufacturers sales go, true those are down. and some companies can be practically a penny stock like callaway a few years ago, where they have no where to go but up. Throw millions into marketing and you can make anything look promising. 4 companies account for 80% of all hard goods sales in golf. Taylormade, Titleist, Ping and Callaway....this 80% will soon be 90%. Titleist, one could argue is an overwhelming ball sales. But cobra, cleveland/srixon/XXIO and Mizuno, hardly fill in 10-14% collectively.

Many of the numbers that are being blasted out of how many golfers are IMO somewhat skewed. For example play one round of golf in one year and you are a golfer. Estimated to be 24 million, but ask that question again of golfers who have played 6 rounds in one year- once per month in many areas and that number drops to about 15 million.

so is golf dying, not quite but from a manufactuer's view, looking ahead its of grave concern with too many vendors here in the united states.

Darth Putter · June 23, 2017

Golf is dying?

As a Scot once said...

All sports die, not every sport really lives.

klebs01 · June 23, 2017

Vespa- where do you live? Your experiences are very different than mine. We have multiple public access courses opening or under construction/development right now in my state. I can't think of a single muni that's closed recently. Munis are busy and clubs seem to be rebounding nicely.

Thrillhouse · June 23, 2017

Golf is dying in the "golf is for everybody" sense that was pitched for several years is dying. Courses are getting less plentiful and more expensive, and equipment prices are rising again. The tiger boom and the real estate boom was an attempt to bring golf to the middle class in a new way (not in the muni/knockoff club way we had in the 90s), in an "everyone can play nice courses with top of the line equipment" sort of way.

So that isn't really happening, because it's not sustainable. Something that is sustainable though is that corporate people/business people LOVE golf more than ever. That crowd has a ton of money to spend and watches a lot of golf on TV, and is a valuable demographic for advertisers to market to. For that reason the PGA tour remains viable and remains a great way to reach an important advertising demographic. So purses are increasing.

What we're seeing is a return to the bifurcated golf culture that existed before 2000. Affordable golf will be found largely at municipal courses and country courses, and affordable equipment will either be used or off brand. And those who can afford it will have their country clubs and high end daily fees that cater to the corporate crowd, and will buy the $600 drivers and $1600 sets of irons.

So it will be different, and the middle class golfer is going to be the one who suffers in all this. The plus side is that the game is still great and there will still be a place for everyone who sticks around. It just won't be as egalitarian as the I Am Tiger Woods commercials promised.

thug the bunny · June 23, 2017

Golf is dying in the "golf is for everybody" sense that was pitched for several years is dying. Courses are getting less plentiful and more expensive, and equipment prices are rising again. The tiger boom and the real estate boom was an attempt to bring golf to the middle class in a new way (not in the muni/knockoff club way we had in the 90s), in an "everyone can play nice courses with top of the line equipment" sort of way.

So that isn't really happening, because it's not sustainable. Something that is sustainable though is that corporate people/business people LOVE golf more than ever. That crowd has a ton of money to spend and watches a lot of golf on TV, and is a valuable demographic for advertisers to market to. For that reason the PGA tour remains viable and remains a great way to reach an important advertising demographic. So purses are increasing.

What we're seeing is a return to the bifurcated golf culture that existed before 2000. Affordable golf will be found largely at municipal courses and country courses, and affordable equipment will either be used or off brand. And those who can afford it will have their country clubs and high end daily fees that cater to the corporate crowd, and will buy the $600 drivers and $1600 sets of irons.

So it will be different, and the middle class golfer is going to be the one who suffers in all this. The plus side is that the game is still great and there will still be a place for everyone who sticks around. It just won't be as egalitarian as the I Am Tiger Woods commercials promised.

The Thrill is back. This is correct. Haha, I remember the I Am Tiger Woods campaigns (little girls and old women and Innuits and Buddhist monks and Pygmies etc saying they are Tiger Woods) and getting the distinct feeling that it was a contrived marketing push. Now the market is returning to equilibrium and while the executives are scrambling, golf at the local level is alive and well.

'It's the end of world as we know it, and I feel fine...'

bladehunter · June 23, 2017

I dont understand when ppl say golf is dying. If I don't make my tee time for the weekend on like Wednesday, every course around me is booked solid. Any weekday after 3pm every course is jammed with leagues. If I drive to my local golf shop on a sunny day to check out equipment I have to park across the street at the range because the shop is so busy. I could keep going but I think you get the point...

i agree with you.. its this way in my home town too.... you cant even just walk into a muni during the week and get on before noon.. and our green grass shop thats been here since 1974 is never not running over... parking lot holds 40 cars or so and is rarely not near full....

I think maybe that the pundits that spout this are in with the oems and what they mean by "'dying" is that it isnt growing at the Tiger rate... well duh... but who cares ?

I agree, but probably 50% of WRXs insist that it is dying, and will come up with all kinds of numbers to support that position..

Because anecdotes don't equal data.

whos data? the OEM powered data?

bscinstnct · June 23, 2017

Golf is dying? ��

As a Scot once said...

All sports die, not every sport really lives.

Its too bad golf wont live.

But, then again, what does?

; )

bladehunter · June 23, 2017

Good question. Looking just at the thread title, I was about to reply sarcastically 'but I thought golf was dying'. If golf participation is dying, then tournament viewership should also be declining (I never ever watched golf until I started playing), which means sponsorship should also decline. Makes no sense. Let's wait for the explanations to roll in. My thoughts are the 'golf is dying' numbers are contrived. By whom? Hmmmmm.....
i have said it many times. Golf is not dying. every course i go to is busy, and takes forever to play a round. it is just golf equipment sales are declining as i think that consumers have gotten savvy and are not purchasing equipment as much and they are tired of the constant release and attacks on their wallets. that is my opinion.

No one is saying its dead, but the growth has been pretty much a flat line. Many courses have closed- that may explain the busy prospects in your area. Over 400 courses have closed, not resold, not transfer of ownership...CLOSED. Many of these were public, many were munis. These courses are the life blood of future growth of younger golfers. If your local course(s) are busy, thats great, BTW are they multi use facilities ( country clubs) ??

If business is so good when was the last non ultra rich private course/club opening in your area?. I just checked my area, in the entire state and neighboring state in the past 3 years only one new public course has opened- and its 9 holes.

As far as manufacturers sales go, true those are down. and some companies can be practically a penny stock like callaway a few years ago, where they have no where to go but up. Throw millions into marketing and you can make anything look promising. 4 companies account for 80% of all hard goods sales in golf. Taylormade, Titleist, Ping and Callaway....this 80% will soon be 90%. Titleist, one could argue is an overwhelming ball sales. But cobra, cleveland/srixon/XXIO and Mizuno, hardly fill in 10-14% collectively.

Many of the numbers that are being blasted out of how many golfers are IMO somewhat skewed. For example play one round of golf in one year and you are a golfer. Estimated to be 24 million, but ask that question again of golfers who have played 6 rounds in one year- once per month in many areas and that number drops to about 15 million.

so is golf dying, not quite but from a manufactuer's view, looking ahead its of grave concern with too many vendors here in the united states.

what you are saying is true to a point.. BUT its nothing more than a natural re-balance of a market thats been on a boom... its exactly what should happen.... instead of trying to artificially keep the bubble alive just to have it burst and ruin the game.... I know of several courses in Mrytle Beach that did close.. But i know that each and everyone was poorly run, not kept well and deserved to go under.... it wasnt because there wasnt enough business. it was because they didnt offer as good of a product as the other guy ..

bmaas03 · June 24, 2017

I dont understand when ppl say golf is dying. If I don't make my tee time for the weekend on like Wednesday, every course around me is booked solid. Any weekday after 3pm every course is jammed with leagues. If I drive to my local golf shop on a sunny day to check out equipment I have to park across the street at the range because the shop is so busy. I could keep going but I think you get the point...

i agree with you.. its this way in my home town too.... you cant even just walk into a muni during the week and get on before noon.. and our green grass shop thats been here since 1974 is never not running over... parking lot holds 40 cars or so and is rarely not near full....

I think maybe that the pundits that spout this are in with the oems and what they mean by "'dying" is that it isnt growing at the Tiger rate... well duh... but who cares ?

I agree, but probably 50% of WRXs insist that it is dying, and will come up with all kinds of numbers to support that position..

Because anecdotes don't equal data.

whos data? the OEM powered data?

Some from the National Golf Foundation, some from Pellucid, and sure...some from OEMs.

Itsjustagame · June 24, 2017

In the demographic golf advertisers care about golf is doing fine.

BlackDiamondPar5 · June 24, 2017

Based on the number of tee shirt & Jean wearing guys, beat up pickup trucks, along with fancy cars at the course I frequent, I'd say golf still transcends the classes.

Vindog · June 24, 2017

Based on the number of tee shirt & Jean wearing guys, beat up pickup trucks, along with fancy cars at the course I frequent, I'd say golf still transcends the classes.

My clubs lived in the back of my truck from May to October.

Always kept a change of clothes though

MtlJeff · June 24, 2017

Golf is dying in the "golf is for everybody" sense that was pitched for several years is dying. Courses are getting less plentiful and more expensive, and equipment prices are rising again. The tiger boom and the real estate boom was an attempt to bring golf to the middle class in a new way (not in the muni/knockoff club way we had in the 90s), in an "everyone can play nice courses with top of the line equipment" sort of way.

So that isn't really happening, because it's not sustainable. Something that is sustainable though is that corporate people/business people LOVE golf more than ever. That crowd has a ton of money to spend and watches a lot of golf on TV, and is a valuable demographic for advertisers to market to. For that reason the PGA tour remains viable and remains a great way to reach an important advertising demographic. So purses are increasing.

What we're seeing is a return to the bifurcated golf culture that existed before 2000. Affordable golf will be found largely at municipal courses and country courses, and affordable equipment will either be used or off brand. And those who can afford it will have their country clubs and high end daily fees that cater to the corporate crowd, and will buy the $600 drivers and $1600 sets of irons.

So it will be different, and the middle class golfer is going to be the one who suffers in all this. The plus side is that the game is still great and there will still be a place for everyone who sticks around. It just won't be as egalitarian as the I Am Tiger Woods commercials promised.

I agree though I think for the foreseeable future the middle class golfer is still fine if he's an educated consumer. There will always be courses that cater to that marker (my country club basically decided to dominate that class rather than go high end) and with aftermarket club sales not going away they'll be able to get good stuff

But overall I very much agree

ray9898 · June 24, 2017

The success of the PGA Tour is not necessarily connected to the health of the game at the local level. Anyway, the purses you see today are a result of contracts signed in the past promising increases in size.

Roadking2003 · June 24, 2017

Unfortunately, golf is dying. Less people play and less people watch every year. So on an economic level, can someone explain to me why purses continue to go up?

Why do you think golf is dying?

And BTW, purses have been going up for more than 50 years. For example, The US Open first prize went up 300% in the 1980s and 213% in the 1990s.

nicoy3k · June 25, 2017

The internet

new2g0lf · June 25, 2017

The golf fan base is a great demographic, typically middle class to wealthy with disposable income and traditionally altruistic. What other professional sport can you sponsor an outing for charity that provides tons of promotion for its sponsors?