Perfect Putt

A weekly newsletter breaking down the business side of golf ⛳️ Delivered to your inbox every Thursday.

[Perfect Putt @readperfectputt]

Full breakdown — the indoor golf equation, the five levers, and what Topgolf's $900M write-down actually teaches us about building in this category.

https://t.co/Q5nsTj0TCV

[Perfect Putt @readperfectputt]

9 million Americans played simulator golf last year.

Double the number from five years ago.

But demand ≠ durable economics.

This week we ran the indoor golf equation from first principles — what actually separates 40%+ EBITDA margins from a $900M write-down.

Thread ↓

[Perfect Putt @readperfectputt]

Topgolf's mistake wasn't the concept.

It was a $30–50M per venue cost structure that required sustained high traffic to service — and then traffic declined.

The operators winning today are deploying $1–6M per location w/ payback periods inside 3 years.

The model works.

[Jared Doerfler @DoerflerJared]

The amount of money at stake on the PGA Tour this week is insane.

• $100 million total
• $25 million to first

Here's how high that $25 million number stacks up.

• It would rank 84th on the PGA Tour career money list
• It would rank 15th on the DP World Tour career money list
• It would rank 1st on the LPGA Tour career money list

Here's a full breakdown of golf's richest week.

https://t.co/fY5bwXEQvj

[Jared Doerfler @DoerflerJared]

Topgolf has been discussed a lot over the last few weeks.

Here is a stat that is concerning.

For its second quarter - Topgolf same venue sales are flat versus 2019.

• 2024 vs 2019: 0% growth

And even worse - 3+ Bay (corporate) rentals are down 5% for the same period.

Topgolf is in a very interesting spot.

Do they get spun off, or does Callaway find organic alternatives to grow same-venue sales?

Click below to read the full piece and analysis.

https://t.co/t3MfhGeLF0

P.S. - this is the most shared piece I have ever written, so give it a read!

[Jared Doerfler @DoerflerJared]

Here's a pulse on the golf industry in the first six months.

• Rounds up 2%
• Golf equipment flat
• Golf apparel down 9%

Golf rounds are really the gold standard metric for the industry.

Rounds up 2% is a respectable number. They were up 5.5% during the same timeframe last year.

Golf rounds have outperformed pre-pandemic levels in 46 of the last 49 months.

Acushnet is seeing decent demand - up 1% on the year. While Callaway golf equipment is down 3.5%.

Definitely not blowing it out of the water like we've seen the last few years.

But certainly reasonable demand and growth.

Golf continues to be in a good spot going forward.

Check out the full piece for more data and charts.

https://t.co/mzRpFZcMUq

[Youth on Course @YouthonCourse]

Junior #Golf participation has continued to see record growth 📈

In a recent @readperfectputt article, it shows the impact @youthoncourse is making alongside metrics from @NGF_GolfBizInfo and @AspenInstitute.

Read more: https://t.co/1UWb30UU7E

[Jared Doerfler @DoerflerJared]

The Open makes up a significant portion of revenue for the R&A.

And the R&A's revenue has increased by 41% since 2019.

No one does tickets like The Open, either.

Children under 16 get in free for the week. And fans aged 16 to 24 get tickets at half price.

Today's piece broke down all things money behind The Open.

Check it out below.

https://t.co/0efGr2OwO5

[Jared Doerfler @DoerflerJared]

Inflation has risen 24.8% since 2019.

Golf has gotten more expensive in that time. But has it outpaced inflation?

Golf courses generally get a bad rap in increasing green fees. They are customer facing - it makes sense.

But I don't think it falls on them.

Labor, agronomy supplies, and turf equipment have increased dramatically cutting into the bottom line.

Here's a quick example.

A John Deere 9009A rough mower has increased 61% since 2019.

What caught my eye the most in researching this piece is what Country Clubs are charging for initiation fees.

Some have 10x since 2019.

Read the full piece below.

https://t.co/2N1W8ed5mq

[Jared Doerfler @DoerflerJared]

Golf has a problem.

Tee times.

Golf rounds were around 500 million in 2006 - that is when they started to decline.

In 2019 - there were 441 million rounds.

And golf course supply has generally followed that trend.

From 2006 to 2023, over 2,000 golf courses were closed in the United States.

And there have been 18 consecutive years of negative golf course supply.

Golf rounds were at 531 million in 2023. An increase of 90 million in just four years.

Tee times are more difficult to get, and green fees have increased.

My concern is that the growth could be stifled due to a lack of supply.

I did a survey last week (read the full piece to get all of the results).

659 people responded to the survey.

This is what surprised me most.

• 208 found it difficult to make a tee time
• 328 found it somewhat difficult to make a tee time

Of the 536 that answered the above. Nearly 60% have played fewer rounds this year.

I do think there are opportunities to help increase capacity with our current golf courses.

Check out the full piece below.

https://t.co/GlHNO9aiB0

[Jared Doerfler @DoerflerJared]

I'm going to write about the supply and demand issue of tee times next week.

Would love your help.

There is a link below to a quick survey - it will take 3 minutes.

No email capture, no name. Just trying to make my newsletter a little better.

And if you feel strongly about this issue - feel free to send me a DM!

https://t.co/yXZiaVpB5K

[Jared Doerfler @DoerflerJared]

College golf is following the trends of the current college athletics environment right now.

It's an arms race.

Alabama is spending $40 million on a golf facility.

Vanderbilt is spending an additional $11 million on upgrades to its facility.

Oklahoma is spending $7 million on renovations to its practice facility.

You need millions to compete right now on the Division I level.

A vast majority of the funding provided for new practice facilities is funded by private donors.

So why are donors spending money on a non-revenue-generating sport?

It's really the same answer as all the other sports. They want to win.

A wrinkle to this is the mid-major schools.

College golf has historically offered levels of parity.

But mid-major schools generally have fewer resources than major colleges.

And mid-major appearances in the National Championship are declining - there were only four this year.

It's the lowest number in the last five championships.

Mid-majors are going to have to find donors that are willing to help level the playing field.

Check out the full piece below.

https://t.co/YqnCTp7naQ

[Jared Doerfler @DoerflerJared]

I stumbled upon an interesting development in college golf.

And it isn’t coming from the powerhouses - or even a major conference.

Eastern Michigan University is investing millions of dollars to compete.

Here is what they have going on:

Eastern Michigan University has 16,000 students and is located between Ann Arbor and Detroit in Ypsilanti.

Their endowment is ~$95 million dollars. The lowest in the MAC conference.

For context - Eastern Michigan's neighbor to the west in Ann Arbor has an endowment of ~$18 billion.

Here is how their men’s and women’s golf teams have finished at their conference tournaments in the last seven years.
But an individual has a vision. A vision to transform Eastern Michigan.

His name is Keith Stone - an Eastern Michigan Alum.

Keith sold his company for over $600 million and is now making a significant impact on the University.

His non-profit has donated tens of millions.

• $2 million to faculty-led research
• $2 million to students in 2020
• $5 million to the College of Engineering

In total, he has donated over $14 million to the golf programs.

$8 million for a golf facility - the GameAbove Performance Center.

And recently, a $6.5 million pledge to the golf programs.

Eastern went out and hired two new coaches too.

They hired Josh Brewer on the women's side - who was at Georgia. He won 19 team team events at Georgia.

On the men's side, they hired Andy Walker - who was at VCU.

I personally can't get enough of a mid-major going all in on golf.

P.S. - Eastern Michigan's facility is incredible.

[Jared Doerfler @DoerflerJared]

Pinehurst's history is loaded with business stories.

From its founding by a soda fountain entrepreneur to a bank sale.

A quick thread:

[Jared Doerfler @DoerflerJared]

One of the biggest pop-up businesses in golf is happening this week.

Last year, the U.S. Open sold around 400,000 items over an 11-day stretch.

To make it happen - it is a multi-year planning process.

Here is how it works.

Merchandise preparation begins two to three years before the actual tournament.

It all starts with the logo.

The USGA works with the host club and an internal design team.

One of the primary keys of the logo? How well does it embroider.

The USGA has had prior championships at Pinehurst. They have data to understand what will sell and won't won't.

For example - black and navy don't do as well as other colors.

They take a look at weather and demographics and utilize market research to understand what will sell.

For LACC, they visited pro shops in the area a year in advance to see what colors and styles sold well.

Dozens of USGA employees and interns help in preparing the merch pavilion.

Some will be on-site for months before the event, while others will travel back and forth.

Last year at LACC - they had 20 UPS trailers to warehouse their inventory.

Hundreds of volunteers will assist in the 35,000-square-foot merchandise pavilion.

Merchandise for the U.S. Open is a crucial revenue generator for the USGA.

Other USGA Championships make up about 8% combined of what the U.S. Open does in both items and revenue.

At LACC they sold around 400,000 items - or around 3,000 items per hour.

If you throw out a hypothetical average price of $60 per item. That is $24 million.

Pretty good.

[Jared Doerfler @DoerflerJared]

The PGA of America moved its headquarters to Frisco, Texas, two years ago.

They spent a little over $30 million on a new facility.

They now have 600 acres including two golf courses capable of hosting major championships in their backyard.

Studies suggest that the move to Frisco could bring $2.5 billion to the local economy over the next 20 years.

The USGA is learning from that blueprint.

While the USGA isn't moving its headquarters - it recently opened a second location in Pinehurst with 70 employees - about a third of its workforce.

They invested $25 million on a six-acre campus that has two buildings.

And with the move - Pinehurst will host the U.S. Open five times in the next 23 years.

The partnership is expected to bring around $800 million in economic activity to North Carolina in the next ten years.

While only Augusta has a permanent major site. What the PGA of America and U.S. Open are doing in creating an anchor site is super interesting.

The partnerships are beneficial for all parties involved and the local communities.

I broke down all the numbers in today's newsletter.

Check it out below.

https://t.co/GtEyHNO8eY

[Jared Doerfler @DoerflerJared]

There have been 2.4 million net new golfers since 2018.

One of the main drivers of new golfers?

Females.

Since 2018 - 1.3 million net new females have taken up the game of golf.

The female participation rate is the highest its been since 2006.

And they are spending money on gear.

Three of the last five years have seen the highest google searches for 'women's golf clubs'.

Spending has surged too. Spending by female golfers grew by 66% from 2014 to 2021.

Junior golfers are the other primary drivers of growth. Over 1 million net new junior golfers have taken up golf since 2018.

These are the two fastest-growing cohorts in golf.

It is also why I believe golf is in a fantastic position for sustained long term growth. Rather than just being a Covid bubble.

Read the full breakdown.

https://t.co/xozfdFNdhW