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“Golf is a good walk spoiled,” growled Mark Twain, and in recent years, more and more Americans have been agreeing with him. The industry hopes that the U.S. Open, played June 9 through 15 at Torrey Pines, will create enough excitement to put a roadblock in front of that slow but steady erosion. Over four days, there will be 30 hours of live television coverage, and the Saturday and Sunday telecasts will appear on prime time in the Eastern markets. (They will run from 4:00 to 10:00 p.m. EDT on Saturday and 3:00 to 9:00 p.m. EDT on Sunday.) Verily, that is a lot of TV golf.

Of course, much will depend on whether the sport’s icon, Tiger Woods, is in contention. He is recovering from knee surgery. He says he will compete in the U.S. Open, but if he does, he will not have played in a tournament in two months. “If Tiger is in the running, there will be a significant jump in ratings,” says San Diego stock analyst Bud Leedom of California Equity Research. “If not, I would be surprised if there are good ratings.”

“It’s called the ‘Tiger Factor,’ ” says Ron Bain, a San Diegan who was formerly president of CBS TV Sports and vice president of NBC TV Sports. “When it is just another event on the tour, when he is not playing, ratings can go down 10 to 15 percent. When he is playing, they can go up 10 to 15 percent. In a major event like the U.S. Open, the ratings have gone up as much as 50 percent when he is leading or in contention.” The best possible scenario for TV and the golf industry “would be Tiger leading and [San Diegan] Phil Mickelson chasing him.” For Mickelson, Torrey Pines is like a home course, but “Tiger has won more times than Phil” there.

However, explains Bain, advertisers on televised golf tournaments are less ratings-obsessed than other advertisers. They are reaching an upscale, largely male audience, and there are few other avenues for targeting that group on TV. The ratings for even a major golf tournament are below the ratings for an average pro football game. Who cares? It’s not how many. It’s who.

But even a U.S. Open that draws a record-breaking TV audience, including oodles of the well-heeled, probably won’t help golf that much this year. Leedom, who publishes the California Stock Report, isn’t recommending golf stocks, because the industry is deeper in the doldrums now with the economy in recession. Golf participation and equipment sales could be down as much as 5 percent in this year’s economic anemia, he says. In the late 1990s, drivers made with space-age metals would sell for $500. “A $500 club is extreme now. You don’t see those prices as much. Something at $300 is the sweet spot,” says Leedom.

That’s not good news for San Diego County. Carlsbad and environs constitute the center of golf equipment manufacturing. Callaway Golf sells the most irons and putters. TaylorMade, a unit of adidas, seized the leadership in drivers in 2005, but Callaway gives it a tough fight. Cobra, a unit of Fortune Brands, has a solid position in drivers and other clubs. Publicly held Aldila, a maker of graphite shafts, has seen its stock drop from $35.60 two years ago to below $8, as its earnings slipped severely. Stock of Ashworth, a maker of golf clothing, has plunged to a little above $3 as the company wallows in red ink.

In the last seven years, stocks in the BusinessWeek/Golf Digest stock index have declined an average 15.5 percent, while the overall market has risen around 10 percent.

In a report on Callaway, Casey Alexander of New York’s Gilford Securities says the domestic golf equipment business right now is “a lousy market” because of weak consumer spending. The result? Whiff. “Most of the time, investing in the golf industry is akin to sinking your feet in cement shoes,” Alexander told BusinessWeek.

But just how far has the total golf industry sunk? Some are overstating the woes. In February, the New York Times, citing data from the National Golf Foundation of Jupiter, Florida, stated that between 2000 and 2006, the number of golfers had fallen from 30 million to 28 million. “It’s all wet. They imply the numbers are ours. They are not,” says Joe Beditz, chief executive of the foundation. He says the number of golfers actually rose slightly in that period. The number of rounds played between 2000 and 2006 declined from 518 million to 500 million, says the foundation — a modest drop. Beditz concedes that the number of core golfers (those who play eight or more rounds a year) fell from 17.7 million to 15 million in the period.

But the statistics quoted in the Times had legs. In March, the Motley Fool, an online stock-assessment service, picked up the Times numbers and gave a double-bogey report on golf stocks. Jim Cramer, who leaps up and down, shouting, on his Mad Money TV show, is sober when discussing golf. He said recently, “There’s a secular slowdown in golf…as much as we think there’s a lot of business done in golf, it is a declining industry, so I am not going to recommend [Callaway].”

Says Leedom, an expert in the golf industry, “It has been in a gentle decline.” It could go up or down 3 percent a year over a long period, with occasional steeper dips or rises such as this year, but the trendline slants only a bit to the downside. He doesn’t believe there have been double-digit declines.

Golf got overexuberant in the late 1990s. As Tiger Woods roared on the scene, the industry began salivating about baby boomers who would be retiring in a few years. After 2001, about 1180 golf facilities opened, but 560 closed, according to the National Golf Foundation. In recent years, a few more people have dropped the game than started it. Golf requires patience, brains, and a long attention span. Such qualities are declining in today’s society. It takes four or five hours to play 18 holes on a standard course. That’s too much time these days.

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Fred Williams June 13, 2008 @ 9:10 a.m.

Back to the subject of golf subsidies:

http://www.reason.com/blog/show/126990.html

Funny and revoluting simultaneously...

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Fred Williams June 4, 2008 @ 2:53 p.m.

It continues to astound me how fixated on sports and tourism we are as a city.

Other places focus on how to build manufacturing, trades, and jobs that provide a good living.

But here in sunny San Diego, we seem to be continually subsidising a leisure society. The well-heeled are treated well, while the working folks who support the economy are ignored. We subsidize sports events that cost hundreds of dollars just to watch, and close pools and libraries to pay for this generosity to the wealthy.

I've played golf a few times, and was bored out of my mind. It's so pointless and wasteful. How could anyone who cares about the environment feel comfortable knowing that thousands of gallons of water are being squandered growing grass, while we are in a severe shortage?

And the city owns these courses?

Why?

It doesn't seem to benefit the city, but to be yet another gift to the haves from the have-nots. I guess in a winner-take-all society, the devil truly takes the hindmost. But would a similar amount of money invested in City Heights be better spent?

Well, what do I know? I guess since I think books and education are more important than golf, baseball, or football, I'm just an oddball.

Still, I fear that there will be hell to pay some day soon for wasting our resources pampering the well-off. We'll have a two-tiered society, with a small sliver at the top enjoying the servitude of the masses of waiters and waitresses who can barely afford rent in San Diego, and watch their children sink into a culture of violence and envy.

It sure looks to me like this US Open bet depends on one single man having a healthy knee. If so, we might break even. If not, we lose yet more money subsidising sports of the past instead of investing in our future.

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Don Bauder June 5, 2008 @ 7:33 a.m.

Response to post #1: You make several excellent points. First, the establishment's intense desire to subsidize billionaire pro sports owners is clearly one reason that the infrastructure is in such bad shape. San Diego already has a two-tier society: the rich and the rest of the people. This is more pronounced in San Diego than in most other cities. The system of government is more like a plutocracy, or even a cashocracy, than a democracy, as elections show. Best, Don Bauder

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qqqqqjim June 5, 2008 @ 12:26 p.m.

Great article, Don!

I think the last time San Diego promoted something like this was when the City hosted the America's Cup races. Of course we all know that yachting is a working man's sport. When someone from out-of-town recently asked me what was the major industry in San Diego besides tourism, I couldn't come up with an answer. Maybe you know, but damned if I could think of anything other than Qualcomm. San Diego has to be the only major city in the country that makes a big deal out of a new company locating here that will eventually employ maybe 50 people. Probably makes the front page of the Union Tribune along with a bunch of other worthless 'news' items.

Jim Fawcett

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Don Bauder June 5, 2008 @ 2:25 p.m.

Response to post #3: Yes, San Diego subsidized the America's Cup -- a sport for the superrich if there ever was one. The U.S. Open is not quite the same, but similar. As to San Diego's major industries, there are some surprises. For example, San Diego is one of the biotech centers of the U.S. But biotech jobs provide only 2 percent of county employment. Telecom is a large employer. Of course, the military and other government entities are very large employers. Tourism is quite large, although the pay is generally poor. Generally speaking, one of the largest employers is private sector services. By and large, this represents people doing each other's laundry. Best, Don Bauder

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JohnnyVegas June 5, 2008 @ 4:25 p.m.

For example, San Diego is one of the biotech centers of the U.S.

But only since the late 90's has biotech taken off in San Diego.

I think we could get a larger business base-but I think it would have to be home grown, with the City and County doing a better job of keeping start up's here happy.

San Diego does have a fairly decent sized TV/Film industry. We also have the largest military port in the world, although all government, it brings in huge dollars-and it is not getting outsourced anywhere.

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Russ Lewis June 5, 2008 @ 4:52 p.m.

Jim and Don, what I hear from SANDAG, I think, is that San Diego's biggest industry is not tourism, as is commonly believed, but manufacture, with biotech being a good chunk of that. If that's wrong, somebody tell me.

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anony_mous June 5, 2008 @ 5:17 p.m.

Actually, Johnny, NNB Norfolk is the largest naval station and, based on the number of military personnel it supports, the largest military station in the world. Remember NAB Coronado and NAS North Island aren't considered to be part of NAVSTA San Diego. Even if you include the Naval Submarine Base over on Pt. Loma, NNB Norfolk is about twice as big.

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Don Bauder June 5, 2008 @ 8:36 p.m.

Response to post #6: In the last report from the Employment Development Department, the county had 101,300 employed in manufacturing. There were 1.12 million in services, ten times more. There were 163,100 in leisure and hospitality. SANDAG is no doubt talking about economic output when it says manufacturing is largest. That's not the same as employment. But manufacturing has been shrinking alarmingly in San Diego, even more so than in the U.S. Best, Don Bauder

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anony_mous June 5, 2008 @ 10 p.m.

According to a 2007 Ernst & Young review, the biotech industry's U.S. public companies lost $277 million in 2007, compared to a $5.6 billion overall loss in 2006. San Diego has The countries 3rd largest group of publicly traded biotechnology companies at 42 firms, behind the San Francisco Bay Area with 77 and New England with 62. However,the region also had the distinction of having its publicly traded biotechs post the largest combined loss of any region in the country at nearly $1.5 billion. That compares with a loss of $755 million for New England companies and a profit of $2.65 billion for Bay Area firms. According to the most recent data I could find, the median salary for bioscience workers in the U.S. is about $70,000. With around 40,000 jobs, that is putting a decent chunk of change into the economy. But with a cost of living index north of 180 and a cost of housing still more than twice the national average, it's still expensive to live in San Diego even at that salary.

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Don Bauder June 6, 2008 @ 8:08 a.m.

Response to post #9; Biotech salaries are definitely higher. But the money amassed in biotechs comes from insiders and venture capitalists getting filthy rich on the initial public offering of biotech stocks. They get the shares for a penny or two apiece. After Wall Street runs the stock up, they start dumping with the stock at $30 or $60 a share. The prominent biotech people who get written up with the Beautiful People have probably gotten rich dumping stock in a biotech that eventually failed. Best, Don Bauder

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JohnnyVegas June 6, 2008 @ 11:57 a.m.

Actually, Johnny, NNB Norfolk is the largest naval station.

Did I say Naval Station or port????

San Diego has the largest MILITARY port in the world. Bar none.

We have North Island, 32nd STreet, The OTL in I.B., Miramar (OK, a little inland), SPAWAR, Point Loma, Sub base-add em all up- the BIGGEST by far.

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Don Bauder June 6, 2008 @ 12:49 p.m.

Response to post #11: The military's presence helps the economy. The real estate industry quietly covets the land owned by the military. But if that land became a real estate development, it would boost the economy one time, in construction. But not very much afterward. Best, Don Bauder

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Don Bauder June 8, 2008 @ 1:52 p.m.

Response to post #13: Water could be the bete noire of San Diego's golf craze.Even though the courses may use recycled water now, that could be in short supply. Best, Don Bauder

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Fred Williams June 8, 2008 @ 1:04 p.m.

The UT today ran a paeon to golf and it's unquestioned goodness. I was almost as nauseating as Matt Hall's fluffer piece on Sanders.

No mention of how much the city spends on golf each year. While we cut back on pools and swimming programs for inner-city kids, we can lavish money on a sport for the elite.

Guess that drought doesn't bother golfers who demand freshly watered and manicured greens. Lawn farming is where the city spends its money, instead of libraries, roads, and ensuring the future water supplies for the city.

Gotta pamper the wealthy, after all. They're the ones who write the campaign checks, so they must be served. If they want golf, they get golf. We can ignore the corruption, mismanagement, and militarization of our police forces. Golf is more important.

What's that?

We're still woefully unprepared for firestorms?

Well, at least we've got golf to save us!

Huh? Still over two billion in the hole on our finances?

Let's go play a round or two! Scott Peters will be out there every Friday, since it's more interesting and important than actually studying what he's voting on.

Yep. We sure have the city "back on track".

Unfortunately, that track is heading into a long dark tunnel, and the light that is coming toward us isn't from the sunshine, but from another speeding train called the economy. And it might be too late to switch tracks now.

Trainwreck alert anyone?

Nah, let's play golf instead.

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Don Bauder June 11, 2008 @ 8:36 a.m.

Response to post #15: That sad fact not only highlights the power of TV: it shows how pro sports is considered far more important than academics in San Diego. No one should be surprised at that. Best, Don Bauder

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MarkScha June 10, 2008 @ 8:09 p.m.

One more data point to show the power of television: UCSD is delaying commencement by a week to accomodate the US Open at Torrey Pines.

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anony_mous June 11, 2008 @ 11:47 a.m.

Response to 11: Have to disagree with you JV. You said military PORT. By your "list", you are speaking in general terms in regards to the military facilities. So are you referring to military port facilities or military facilities in general, because your "list " includes both. For someone who claims to be a lawyer, you seem to not pay attention to your own details on occasion. How many of the facilities you mentioned fall into the port catagory??? I don't believe Miramar, NAS NI, IB, ect are really military port facilities, do you? Each "port facility" currently has 14 working piers although Norfolk has an additional 6 not being used. 78 ships are ported in Norfolk, 56 in San Diego. The port facilities in San Diego are not the biggest. If you want to compare NAVSTAs as a whole, Norfolk is almost 3 times bigger in area. According to DoD,based on supported military population, it is the largest military station in the world. So if what you are really talking about is how much money come in to the local economy, I think the fact that Norfolk supports the largest military population gives you the answer. If you want to compare all of the facilities in the general 32nd St area to all of the faciities in the Norfolk area, they are about the same size. And of course, if your just trying to prove your point with complete disregard to logic by comparing all of the facilities in San Diego county to prove your point, then of course San Diego is larger due to the facilities at Miramar and El Centro.

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Don Bauder June 12, 2008 @ 7:50 a.m.

Response to post #17: I await Johnny's response. Actually, the subject of just how much the military contributes to the San Diego economy is worth a detailed and objective study, since the real estate industry covets those bases. Best, Don Bauder

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Don Bauder June 13, 2008 @ 12:42 p.m.

Response to post #19: Well, $500,000 is better than the $300 million given the Padres, owned by a near-billionaire. Best, Don Bauder

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