Will Nike buy TaylorMade?

[tsecor]

Nike to buy TM??

 

I saw this youtube vid.....makes sense but do you think this will happen? Why or why not? 

 

 

[VNutz]

Those who do not learn from history are doomed to repeat it.

[the bishop]

No.

[toc]

No, but Tiger should that'd be cool

[cbeau166]

16 minutes ago, toc said:

No, but Tiger should that'd be cool

 

Tiger is smarter than that. He knows not to buy high and sell low.

[Ferguson]

Not likely.   No synergy.  

 

[elwhippy]

No point. They peed a lot of players off when they left the hardware game. 

[cbeau166]

26 minutes ago, elwhippy said:

No point. They peed a lot of players off when they left the hardware game.

 

I'm not sure I follow this line of thought. Do you really mean to suggest that if Nike bought Taylormade, players who have held a five-year grudge would transfer that anger to Taylormade in a way that would appreciably impact sales? Cause that would be absolutely wild and totally unbelievable.

Edited March 1, 2021 by cbeau166

[MtlJeff]

I don't see why they would. They got out of equipment, so i'm not sure why they would get back in...And what else does TMAG offer Nike that they don't already do? Nike's clothing business i imagine is as good as TMAGs

 

Now seems like an odd time to buy an equipment MFR

[grm24]

22 minutes ago, MtlJeff said:

I don't see why they would. They got out of equipment, so i'm not sure why they would get back in...And what else does TMAG offer Nike that they don't already do? Nike's clothing business i imagine is as good as TMAGs

 

Now seems like an odd time to buy an equipment MFR

Taylor Made and Adidas (TMAG) are no longer the same company. Adidas sold off TM in 2017.

Edited March 1, 2021 by grm24

[Loose_Ferrule]

Not sure it makes sense at the price they are looking for currently. May have made sense when it sold previously at approx $400M but not now.

[Baitkiller]

No. I do not purchase Nike products.

[Soloman1]

Apparel business = $. Buy cheap crap from sweatshops and mark it up 1,000%.

Golf club business = Making stuff is hard and way too much work. Margins are low.

[TiScape]

No. That videos title is click bait. If you actually watch the video (I don’t recommend it) one of the guys main reasons Nike should buy TM is because TM has big name players right now... Uh, didn’t Nike already have some guy named Tiger and another named Rory amongst others playing their clubs? Hopefully he got a lot of clicks and increased his ad revenue 🤪

Edited March 2, 2021 by TIScape

[golfortennis]

3 hours ago, Ferguson said:

Not likely.   No synergy.  

 

 

I believe they have also divested some of their prior acquisitions.  Do they still own Umbro or Cole Haan?

 

I've moved away from Nike as well, but as a business case I do not see why they would, especially at the price being bandied about.  I can't imagine how they could ever achieve a decent ROI on that.  

[tw_focus]

Nope, the acquisition makes no sense. The golf club business is rotten as Nike learned first-hand, you have competition at the top and Costco eating its way up from the bottom. Better to sell shirts, shoes and clothing.

[Thayneil]

8 hours ago, Soloman1 said:

Apparel business = $. Buy cheap crap from sweatshops and mark it up 1,000%.

Golf club business = Making stuff is hard and way too much work. Margins are low.

If shirts sell for 85$ the mark up may be higher than that!

 

I know someone who owns a shirt factory.Air con and 5 day weeks.10 hour dsys though.Means staff can go.home at weekends.

[Ferguson]

11 hours ago, golfortennis said:

 

I believe they have also divested some of their prior acquisitions.  Do they still own Umbro or Cole Haan?

 

I've moved away from Nike as well, but as a business case I do not see why they would, especially at the price being bandied about.  I can't imagine how they could ever achieve a decent ROI on that.  

 

Cole Haan  - APAX, cash deal. 

Umbro went to Global or Iconix, can't remember.  

 

[iNeedMoreGolf]

They will... just to make me buy... then exit right after.

[driveandputtmachine]

I would say no chance Nike buys them.   Nike screwed up their first foray into clubs, and when they left you saw the biggest jump in distance on the PGA tour, because a bunch of people playing Nike were able to go somewhere else.  Nike should have bought and existing club company that already had manufacturing deals and club designers in house with a long history.  But NO, Nike thought they could basically start from scratch and do it better, because they knew nothing about industrial manufacturing.

 

Building clubs isn't just about the best designers.  It's about those designers knowing tolerances with the metals and factories they are already working with to eek out a little more here or a little more there.  You can design a great club, but then working with a newish factory for your designers with a slightly different material and your tolerances are different.

 

No one touches TMAG at 2 billion.  Sure the Investment group fixed some things, tightened up the ship, and didn't allow the company to start blowing out 5 and 6 month old drivers at 100 to 150 off.  I think the SIM went on sale the week before the SIM 2.  Aushnet is a 3 billion company, Callaway is a 2.5 or so.  Both are more than just golf equipment, way more.  Acushnet alone with their shoes and balls makes them worth at least twice as much as TMAG.  Callaway with their shoes and clothing brands and other investments makes them worth twice as much as TMAG.

 

Current sales will not hold once the pandemic is over.  People who's kids stopped travel soccer, tennis, lacrosse, softball, that are buying equipment and playing will slow down or stop.  Kids that are playing golf instead of many of those sports will do the same.  Golf will go back to just above pre pandemic levels(some back to golf and new comers will stick, but most will not), anyone with half a brain expects this.

 

Will someone buy TMAG?  Yep.  Anywhere near 2 billion?  Nope.  TMAG was purchased for 250 mill cash and an overall price of about 425 mill or so in 2017.  TMAG sells for 1.15 at the most and I would guess not to Nike.  

[Frankensteins Monster]

Why? Nike is the most visible brand on the PGA Tour, and they don't sell a piece of swung golf equipment.

[the bishop]

Posters keep referencing "TMAG" in this thread, but as someone else pointed out, TMAG no longer exists.  So knock it off.  Lol.

[PostandGhost]

PGA Tour Superstore, Golf Galaxy, Golf Town, and any other retailers that hold large inventories are scared to death this will happen!

Edited March 2, 2021 by From_Parts_Unknown

[Ger21]

11 minutes ago, driveandputtmachine said:

 Nike screwed up their first foray into clubs, and when they left you saw the biggest jump in distance on the PGA tour, because a bunch of people playing Nike were able to go somewhere else.  Nike should have bought and existing club company that already had manufacturing deals and club designers in house with a long history.  But NO, Nike thought they could basically start from scratch and do it better, because they knew nothing about industrial manufacturing.

False.

They did buy an existing company, and started with a well respected club designer.

[driveandputtmachine]

38 minutes ago, Ger21 said:

False.

They did buy an existing company, and started with a well respected club designer.

Please read instead of trying to jump in and be cool.

 

I stated this......

"Nike should have bought and existing club company that already had manufacturing deals and club designers in house with a long history.  But NO, Nike thought they could basically start from scratch and do it better, because they knew nothing about industrial manufacturing."

 

Key words there, LONG HISTORY and BASICALLY START FROM SCRATCH.

 

The company Nike bought did not have a a club designer with a long history of working with a specific factory understanding the exact properties of the titanium they produced.  They had a great designer, but that is really less than half of the battle in industrial manufacturing.  Impact golf and Tom Stites even his time at Hogan could maybe be a candle if you compared it to the bonfire of TMAG, Callaway or Ping as far as money spent in design, computers used in aiding design and relationship lengths.  If you think all 6/4, 15-3-3-3, SP700 and other grades of titanium are exactly the same at every factory and every factory has the same abilities then I have a bridge to sell you.  Also some tooling at some of the factories they use for only some manufacturers, because the manufacturers paid for that tooling.  The differences in the metals, abilities of each factory is what can push you right to the limit, which is something Nike never did since the biggest jump in average driver distance on the PGA tour happened when Nike got out of the club business.  Since they had a well respected club designer, the only option for why they had these issues would have to be on the manufacturing side.

 

Nike made some great irons, they made some good putters and wedges, there are some that like fairways and hybrids they made.  They real issue was their drivers.  They were a niche market, they weren't designed or fabricated as well as TM, Cally, Ping, Title, etc.  That lack of a good performing and fitting driver doomed their business.  Well that and an over reliance on TW, and from reports thinking that being Nike was enough and no drive to be great or the best.  

Edited March 2, 2021 by driveandputtmachine

[MattyO1984]

Speaking from my Team Titleist perspective, I would be quite happy if Nike bought TM and did what they did with their own brand equipment 😂

 

In all seriousness though, it makes absolutely no sense for them to do that. Seems like when Nike do that sort of thing, they buy the company, gut the good parts of it, take the most lucrative contracts and then dump the brand - see Umbro, Bauer, Hurley. Given how poorly received Nike were in the golf equipment market before now, if Taylor Made were to suddenly become Nike-Taylor Made, I am not sure that golfers would be overly keen. 

[cgasucks]

Phil Knight would laugh in your face in front of everybody if someone asked that question to him.  He knows how hot the hard goods golf kitchen is and doesn't want to go back there again.

Edited March 2, 2021 by cgasucks

[cn34]

53 minutes ago, driveandputtmachine said:

Current sales will not hold once the pandemic is over.  People who's kids stopped travel soccer, tennis, lacrosse, softball, that are buying equipment and playing will slow down or stop.  Kids that are playing golf instead of many of those sports will do the same.  Golf will go back to just above pre pandemic levels(some back to golf and new comers will stick, but most will not), anyone with half a brain expects this.

 

Interesting perspective that I hadn't considered and factored in to where golf equipment sales go from this recent boom. I've got a kid who plays soccer at a competitive level and as games and tournaments have resumed, I'm definitely playing a little less. I think this definitely could be the case. What will be interesting is, for the kids who have started playing or are playing more during pandemic due to impact to their other sports, will they keep playing golf? Or, if they do keep playing, how much time will be dedicated to golf versus their other sports?

 

And to chime in on the main topic. Nike isn't buying TM. I would speculate they are not really even interested in being in the golf apparel business except for Tiger.

[cbeau166]

11 minutes ago, cn34 said:

I would speculate they are not really even interested in being in the golf apparel business except for Tiger.

 

Nike is interested in pursuing any market which will make them a good ROI. And selling specialized clothing made of cheap synthetic materials at a tremendous mark up to a market of mostly wealthy customers who will spend, for example, $600 on a new putter because Tiger uses it, is definitely gonna make good returns.

Edited March 2, 2021 by cbeau166

[AmazinBlue]

One, I hope they don't.

Two, I think it would foolish to do.

 

Nike has a global company that makes HUGE profits off grossly overpriced sportswear, taking advantage of workers getting paid pennies for their hard labor.  Why would they want to cut into those profits by buying a company that, on the surface, loses millions of dollars each year in unsold and failed equipment.  Taylormade has been bought sold more than any existing golf equipment company.  I was told many years ago, don't invest in sports equipment manufacturers, the chance to make a profit is so slim.

 

The one exception was Cobra when Greg Norman invested heavily in the company and became the main ambassador.  He put Cobra on the golf map and made a fortune off it.  Now Cobra is a fringe company that has a very small presence on the Tour and that's where the main marketing for an OEM is done.

TM pays huge amounts to Rory, DJ and others and despite their recent success with a couple of recent offerings, the company as a whole doesn't seem to be a worthwhile investment, especially at the reported $2B price tag.