The Week That Was, november 30, 2014

     Dan Washburn, the author of The Forbidden Game, is hearing disturbing things about the state of the golf business in the People’s Republic. He’s heard, for example, that the industry is currently “in a full stop mode” and that “big-time golf development is absolutely over in China for the foreseeable future.” Among the reasons: Cooling real estate markets, severe water shortages, and stricter lending practices that have tightened the money supply. Also, the government is again enforcing its 10-year-old moratorium on golf construction and has sent shivers down the spines of developers by threatening to close as many as 100 existing golf courses. Though he’s viewed as an expert on golf in China, Washburn doesn’t know what to make of it all. “Maybe this is truly the end of the boom,” he muses. “Maybe it’s just another bump in the road.” Either way, those who still think that China is golf development’s promised land surely have another think coming.

     New business ventures, including what’s been described as “a major branding deal” and “an increased devotion to digital,” are on the horizon for Nicklaus Companies. Within the next six months or so, according to a report in Forbes, Jack Nicklaus’ marketing apparatus plans to unveil Nicklaus-themed airport restaurants (how did we ever live without them?) and new food and beverage products (we all scream for ice cream!), and it may move the company into what a company official calls “golf entertainment.” Golf-course design will continue to be the firm’s primary line of business, but in recent years Nicklaus has supplemented the architectural division’s revenues by putting his name on apparel, wine, eye wear, household goods, home appliances, limited-edition pens, calendars, golf balls, memorabilia, and other mostly unnecessary stuff. Forbes says that the forthcoming ventures are an effort “to institutionalize the Nicklaus Companies’ brand so that it could live on indefinitely.” Next year, Nicklaus will celebrate his 75th birthday.

     It’s going to be a really swell Christmas for the equity members of a private golf club in suburban Toronto. A residential developer has offered $412 million for the 400 acres occupied by York Downs Golf & Country Club, a price that values each member’s share at $200,000. The members haven’t yet agreed to the offer -- a vote will likely take place early next year -- but a sale appears to be foregone conclusion, seeing as how the club’s initiation fee had been only $30,000. “I don’t know how the club would exist if we turned this down,” a member told Global News Toronto. “It is simply too much money to ignore.” With its windfall, York Downs could conceivably relocate or buy out a competitor, but the news service reports that the idea “doesn’t seem to be gaining traction.” The members would prefer to take the money and run.

     Graeme McDowell, the professional golfer from Northern Ireland, has registered a complaint about the “elitist” nature of golf. “We have to make the game cheaper, more accessible, faster, and more fun,” he wrote in a recent blog post for the BBC. “When I go to different parts of the world, I see that golf is still elitist. It doesn’t encourage people who can’t afford to play. We need nine-hole, par-3 courses, like the one I grew up on. I don’t understand why we don’t see more of that, especially in the United States.” McDowell deserves credit for drawing attention to one of the golf industry’s major problems, but he isn’t being honest when he suggests that he doesn’t know why nine-hole, par-3 tracks are so few and far between. And while we’re on the subject, it’s worth noting that life on the “elitist” PGA and European tours has benefited McDowell handsomely. Yahoo! Sports says that McDowell has earned nearly $27 million during his career, an amount that likely doesn’t include money earned from endorsements, investments, and other ancillary income streams. If McDowell thinks the golf business would be better off if it had a greater number of short, easy-to-play courses, he can certainly afford to build a few.

     CEOs who are adept at keeping their eyes on the ball at the golf course often lose sight of it in their executive suites. According to a statistical analysis by a trio of college professors, the companies of CEOs who play more than 22 rounds of golf annually have “lower operating performance” than companies with CEOs who keep their noses somewhat closer to the grindstone. The professors came to their conclusion by analyzing the corporate performance of 363 U.S. chief executives who posted their golf scores at a USGA website, a practice that will undoubtedly soon end.