The TopGolf money maker keeps rolling...

Nor should the news of October 28, 2020 that Callaway Golf Ltd., which already owned a 14% stake in the company, has decided to purchase the company outright. Estimates are about $2B. Chip Brewer, Callaway’s CEO said in an interview with Golf Magazine:

“Callaway is an iconic brand. We’ve been around now for a long, long time and we’re global leader in the golf equipment market. We have a strong relationship with consumers globally. And Topgolf is creating new golfers, but they’re also entertaining existing golfers — half the visitors that go to Topgolf venues are already golfers themselves. So the access and the reach and the added growth and value that we think we can great through that consumer overlap and the consumer growth.”

While other aspects of golf struggle, TopGolf and the idea of having fun while playing golf continues to thrive. There is no other company in the golf industry in my opinion that could be labeled as a juggernaut in the industry. Yes there is growth in the investment culture, but nothing like the growth that they have accomplished. Congrats to both companies for this terrific accomplishment. If you look down the chart from the CEO Dolf Berle to Top Tracer President Ben Thorpe, they have given the public a new insight into how golf can be fun (when it’s presented in an entertaining light) and STILL lead new people to play the grass courses and buy new equipment.

Dolf Berle makes his case for why Topgolf has become the iconic brand in the industry that is has:

“There are different types of golf as the game is moving forward, which is awesome. And we should celebrate that. That’s the best thing that’s ever happened to golf, right? It isn’t all tournament golf. It isn’t all country club golf or even private vs. public golf, right? Golf doesn’t have to be a four-hour round on a golf course or a five-hour round or, if you’re playing in college, a six-hour marathon. But the metrics show that 75% of the people that are non-golfers and visit Topgolf have a strong desire to then go play traditional golf. Another survey that was just done at the venue showed that half of these non-golfers intend to play golf on a golf course in 2021. So you’re clearly creating new golfers.”

In this vein, I am curious why there is still such a pushback from the golf industry to try to incorporate other fun aspects to golf to bring new players and facility users to the grass courses. After all, when golfers are not playing, how do grass courses make money? Well, they can rent out the clubhouse to weddings, but that won’t necessarily bring new customers to the course to play golf. If I’m a Billy Casper Management down to Lindsey Management or even Marriott Golf, I’m looking to expand my footprint and create shareholder value whether private or public.

The Indoor Golf Course for example, was designed to be in addition to the grass courses. It only takes up 8 acres either on a course or as a standalone and is designed to create a fun atmosphere to lead the new group of golfers to the grass courses. Think about how smartphones grew; the wireless companies literally gave them away at the beginning and made money on the service. Printers cost nothing but once you use them you’ll buy the ink. Now how many people are paying up to $1000 for the phone and STILL paying for the service? To create the next growth spurt in golf, we need to get people playing in as many different ways as possible to introduce them.

Especially if these new golf products can create a terrific income.

One other item Brewer discusses is theTop Tracer technology. It lends me a question. Here’s his idea:

“There’s a huge advantage of scale that we’d be able to provide there, because as you put it (TopTracer)into these facilities, like the driving range you’re referring to, we can have interconnectivity between various locations and we can run contests and tournaments and the scale of the different games we could put in. A player like you can go to that driving range and track your shots and run through a combine if you’re working on your game, looking at it from a better player’s perspective.”

Now I get licensing your product to driving ranges (I wish they would call them practice ranges) since it is a source of income. But I don’t see how that prepares a golfer for the course. Yes it can be used for metrics but what high to mid handicap golfer knows how to use metrics without a pro to interpret them. That being the case, shouldn’t they just go to the pro? It almost becomes a video game. It also is the same problem with TopGolf translating to a course. At TopGolf , you don’t have unruly inconsiderate golfers yelling at you or hitting at you or slowing down play during your pod-time. There is no bar to go to or wait service on every hole. I may be nitpicking here but I would be interested in these people who play at TopGolf, then play a course, then come back to TopGolf and talk about the experience.

Even with that, I still say Congratulations to the TopGolf team for creating a golf product that has more pros than cons-figuratively.