Suppose you are a celebrated engineer in Silicon Valley. The smartphone is your baby. But you are told that your smartphone is too smart. You have to dumb it down — maybe all the way back to the beginning of the 21st Century, when it was first developed.
Something like that is happening in San Diego County, the center of the golf-equipment industry.
In the 1990s, golf gear went high tech: manufacturers began using aerospace metals and other exotic materials to put out golf clubs that sold for $500 each and sometimes more. But the governing high priests of the game, the United States Golf Association (USGA) and Britain’s Royal & Ancient Golf Club of St. Andrews (R&A), are shaking a finger at equipment supposedly designed to give a boost to the duffer and give incredible distance to the pros’ drives off the tee.
Purportedly to preserve the sanctity of the game, on June 6 these two ascetic groups published a study that rattled the San Diego industry, which is largely based in the Carlsbad area. The 18-page document concluded that between 2003 and year-end 2015, the average driving distance of members of the Professional Golf Association (PGA) Tour, along with three other tours, rose only 1 percent, or 0.2 yards per year. In another group of less well-known tours, the average drive length went down 1 percent in those same years.
In six centuries of golf, equipment has improved greatly, conceded the United States and Britain ruling authorities. “While generally welcoming this progress, the USGA and R&A will remain vigilant,” vowed the groups. “The purpose of the rules is to protect golf’s best traditions, to prevent an over-reliance on technical advances rather than skill, and to ensure that skill is the dominant element of success throughout the game.”
Take that, Carlsbad! This was a right hook to the snout of publicly held Callaway Golf and its operations, such as putter-maker Odyssey Golf, and local companies owned elsewhere, such as Aldila, the shaft maker; Cobra, a club manufacturer; TaylorMade, which is number one in drivers, and Ashworth, the clothing maker. The club manufacturers have been taking out ads to show that their space-age models can drive a ball further. But if skill is more important than equipment, maybe golfers should spend their money on lessons, not gear, suggest the purists.
Maybe that is why sports-shoe maker Adidas has put three San Diego operations — TaylorMade and its unit Adams Golf, and Ashworth — up for sale. The last two are losing money, dragging the parent company down.
In its 2015 annual report to the Securities and Exchange Commission, Callaway stated that its main products have a life cycle of two years. If skill is the most important element of success, golfers should hardly get a new set of clubs every two years. “Yes, there was a two-year product cycle, and some manufacturers got down to 18 months,” says Bud Leedom, who has a money-management firm in Rancho Santa Fe and formerly had a publication, Golf Insight & Investing. “This hurt the game. You can’t make quantum leaps every two years.”
From the 1990s to the early part of the new century, the manufacturers not only used space-age metals, they also designed huge club heads, and golf shafts with more whip in them, says Leedom. In that period, distances did improve, at least for pros and really good golfers, and the regulators reacted. Golf-course managements were complaining that the long drives “made courses obsolete,” says Leedom, who thinks distances definitely improved in the 1990s.
The industry had gone on an expansion spree in the 1980s, anticipating the retirements of baby boomers. “The National Golf Foundation said the industry had to build a course a day, and it wound up building one and a half a day,” says Jim Dunlap of Oceanside, editor-in-chief of the online golf publication Pellucid Perspective. “Now 15 courses are closing for every one that opens, and that is a good thing for golf-course owners; the industry is so overbuilt.” San Diego County has lost Escondido Country Club, San Luis Rey Downs Country Club, Carmel Highland Golf Course, and Fallbrook Golf Course. In San Diego County, “Nobody in their right mind would build a daily fee course,” because of a dearth of players, sky-high real estate prices, and the drought, which has driven up prices of water.
Nationwide, the number of golfers has come down from 30 million to 21 million, Dunlap says. The National Golf Foundation has a rosier view, saying it dropped from 30 million in 2005 to 24.1 million last year.
Callaway’s revenue and earnings both declined in the first quarter of this year, as sales of woods, irons, and putters all dropped close to 4 percent compared with the same quarter of the prior year. However, the company forecasts that things will get better the rest of the year, partly because millennials (those aged 18 to 36) will rush into the game.
But the millennials may not take up the sport, just as the retiring baby boomers found other recreation. Says Dunlap, “The millennials are not coming in at all,” he says. They are “looking for fun and experiences,” but it takes four or five hours to play a round of regulation golf. He points to a new game attracting millennials: TopGolf. Players hit golf balls containing microchips that track a shot’s distance and accuracy. Points are awarded for hitting targets. All the while, rock music is playing loudly and people are boozing it up.
A private golf club costs less but remains expensive ($300 to $400), and a round of golf on a regulation course is not cheap. Two buddies playing a weekend round and sharing a cart at Balboa Park Golf Course will pay $55 if they are San Diego city residents, $65 if not. Many courses are more expensive. For all the attempts to democratize the game of golf, it remains an upper-crust recreation. According to the National Golf Foundation, household income for the average golfer in the 30-to-39 age range is $93,000. The largest percentage of golfers (27 percent) have household income of $125,000. According to Oxfam, the worldwide anti-poverty group, a mere 62 individuals hold wealth equivalent to 3.6 billion people, or about half the world’s population.
To a potential golfer, wealth and income disparity is a real handicap.