Ailing Callaway May Buy Conglomerate's Golf Business

Reuters is reporting that Carlsbad's Callaway Golf, which has just reported poor earnings and prospects, may join with Wall Street's Blackstone Group to buy the golf business of conglomerate Fortune Brands. Fortune announced late last year that it would sell or spin off its golf business, which makes Titleist equipment, among other things. Callaway reported Thursday (April 28) that its first quarter sales fell 6% and earnings per share dropped to 15 cents from 24 cents a year ago. Callaway also suspended its 2011 market because of the difficulties in Japan, its second biggest market. Callaway stock is down about 4% this morning (April 29).

Comments

Wow, another local case of how far the mighty have fallen. Nothing is going right for the golf equipment peddlers. Was it thirty years ago when Callaway and a couple other golf club makers could do no wrong? Or was that only twenty years ago? When every cockamamie gimmick in reinventing the golf club brought huge adulation to the designer? High tech ruled the game, not skill? It is about time that the popularity of the game and the pedestal it has been on got a second look. I still see plenty of golf being played on courses in my area, but the growth is over, and the days of getting a player to invest $ thousands every two or three years in new clubs is over for the time being. The success of the club manufacturers was bottomed on growth, and the sport isn't growing any more.

Another local growth industry on the wane--where will it end?

It was in the 1990s that Callaway and other local golf equipment companies could do no wrong. Golfers would shell out $500 for a high tech driver. There was little convincing evidence, however, that these clubs made of space age metals would really add that much distance or accuracy to one's game, if any. Ditto for golf balls. Golf is a very frustrating game (I found that out myself.) In many years, more people quit golf than take it up. The companies thought the rash of baby boomers retiring would boost golf -- aided by Tiger's persona. Golf courses became overbuilt and a rash of bankruptcies began hitting in the late 1990s and early 2000s. Golf has zoomed in some places overseas, but as the item mentions, Japan's woes are cutting deeply. Golf has been in a down period for a decade now. It will probably bounce back, but who knows? The popularity of games is cyclical. Best, Don Bauder

If you don't think people still shell out Hundreds of dollars for new high tech clubs and that those clubs don't improve their game, I fear your bias against gold is showing. It does happen.

Well, of course people still shell out hundreds of dollars for high tech clubs. But the number of rounds of golf played every year in the U.S. is declining. The jury is still out on whether the high tech clubs really are effective in improving one's game. Best, Don Bauder

Golf began its decline long before our current president took office. In fact, golf's rate of deceleration may have been steepest when George W. Bush, an avid golfer, was president. I think it's the old, sad story: overexpansion in expectation of a rip-roaring market (baby boomers in this case), but the market doesn't develop. In golf's case, rounds played are actually declining in the U.S., although not dramatically. Best, Don Bauder

A lot of golfing is and was about networking. That's is why the Japanese like it. It's how their culture enjoys spending time together to get to know each other. They self-disclose slower than Ameericans and others in the West.

A lot of business deals are made on golf courses. Just like the two (or was it three) martini lunch, the business golf game is dying. Time is scarce and can't be wasted chasing a ball around the park.

Golf, like bowling is dying. It's expensive, time consuming and really (especially with a cart) isn't a great sport for fitness. You can get the same health benefits walking (for free) on any trail or beach.

As far as equipment goes, you cna buy all the fancy graphite and titanium stuff you want at the local swap meet. The secondary market for high-tech golf equipment is huge and cheap.

Golf, like bowling is dying

Bowling is very fun, loads of fun.

When I was in school in Michigan, where the sun only came out 1 day per month during winter (and that is no lie or exageration either) we went bowling every weekend-either Friday or Saturday night, and the bowling alley was HUGE-200+ lanes, and every lane was packed. Lots of bowling leagues. Just packed.

Those were fun times, very fun.

Golf equipment makers and course owners are trying several approaches: one is the executive-type par three course. It's been around decades, of course, but some see it as a solution to the three-hour round. Another possibility: more 9 hole rounds. Golf is a great game, but it still has a lot of problems in today's world: it takes a lot of skill and continued practice. (That's true with classical piano players, in particular.) It's a very frustrating game. That's why so many quit. Best, Don Bauder

When I used to play golf, I hit into the trees out of bounds so often that I didn't get any conversation time with others. Best, Don Bauder

One pro golfer of yore had been a third-string quarterback or something like that at the University of Illinois. He said that golf was not athletics, or a sport. (I think his name was Goalby.) Golf certainly requires physical coordination. I would say it is a sport, but I would like to hear other opinions. I would say chess, which does not require physical coordination, is not a sport. Best, Don Bauder

Sport: An activity involving physical exertion and skill in which an individual or team competes against another or others. -- Wikipedia

Golf requires skill and physical exertion. Some forms of golf are team sports-- the Ryder Cup, for example. Best, Don Bauder

Sport: An activity involving physical exertion and skill

I don't challenge the skill portion (had/eye coordination), but the physical part I do challenge.

I am being a little sarcastic too.......

I suspect it takes a lot of exertion to hit a drive 300 yards. I wouldn't know, because I've never hit one anywhere near that far. Best, Don Bauder

Golf is a sport, but not a very strenuous one nowadays. The new course built in and by the City of Carlsbad prohibits walking the course to play a round. If it still demanded walking the entire distance, whether carrying the bag, pulling the bag on wheels, or using a caddy, that might make it a more legitimate sort of athletic activity. But most of the players I see today use electric carts, and that is not limited to the elderly ones. Too often I think people take up golf as a sort of status symbol, letting others know that they have "arrived" and can now afford to play the rich people's game. With fewer folks feeling rich now, there are fewer who want to try it, and fewer who want to keep spending the money on club membership buy-ins, club dues, green fees, balls, proper attire, and refreshments, let alone hundreds of dollars on fancy clubs.

The recession is definitely one factor in golf's decline. Best, Don Bauder

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