2013 PGA Player Sponsorships – Predicting the Future

Trying To Be Buy #1 – The Changing Of The Guard Logo

While perhaps it’s not everything that it used to be, the professional – and more to the point, the PGA Tour still has the greatest impact on what the consumer buys. It’s the top of the pyramid of influence, and manufacturers know that if you can control the top, you control everything underneath it. There’s a direct correlation to being the #1 Driver, or the #1 ball on Tour and being the #1 whatever it happens to be in all of golf (which generally includes consumer-driven marketshare).

It’s not unusual for golfers to move from one brand to another. It happens every season. What makes this season unique is that not only are more players changing logos, never in my memory have so many moved between so few companies. If there was any doubt that Callaway and Nike were serious about overhauling their respective staffs with the hopes than an improved PGA presence would better position them to take on TaylorMade, this year’s signings should make it abundantly clear that both companies are absolutely serious.

Nike’s recent announcement that Rory McIlroy will be joining their Global Tour Staff effectively settles the dust on the busiest endorsement season in recent memory; albeit with all the suspense of an episode of the A-Team (spoiler alert: B.A. gets drugged, Hannibal and Co. save the town).

To suggest that Rory’s signing was the worst kept secret in golf would be disrespectful to poorly kept secrets everywhere. If you didn’t know Rory was joining Tiger, you weren’t simply in a coma, you were dead.

Of course, Rory wasn’t the only one swapping logos. More than a dozen other players significant enough to warrant an announcement either jumped ship or signed new deals outright – and that’s before we start talking about apparel contracts…which we’re not going to talk about.

Truthfully the ins and outs of what happens on the PGA Tour isn’t generally newsworthy around here (mostly we don’t care), but with so many ‘name’ players moving around, we decided to take a closer look at the signings and see what they could mean from an equipment perspective.

Admittedly taking on such a task is like trying to grade the NFL draft immediately following the selection of Mr. Irrelevant. Until these guys get their TV time with their new gear (and most haven’t yet), it’s far too soon to know what these signings actually mean…but it sure is fun to speculate.

Nike

Nike’s prevailing philosophy in any sport is “we want to have the best players in the world”. In the NBA it’s as true today (LeBron, Kobe, Durant) as it was back in the proverbial day (Jordan). The same holds true in tennis (Federrer, Nadal), Soccer (admittedly Nike would probably love to trade Ronaldo for Messi), and even American football.

Even if the presence of Tim Tebow on the Nike staff might suggest otherwise, in a sport where being the best is harder to define, names like Polamalu, Suh, Clay Mathews – and of course Bo Jackson before them – suggest Nike always wants to have the very best players wearing the Swoosh.

It’s that commitment to having the best player in the world that led to Nike luring Rors away from Team Titleist. At just 23 years of age, McIlroy already has 6 PGA Tour wins (including 2 majors), and is unquestionably the best get of the season. He’s by most accounts the best player in the world today…and if he’s not, for now anyway, Nike still has Tiger Woods.

There’s still some doubt whether Rory can move the needle (golf clubs and apparel along with it), but if you’re going to gamble that somebody can, Rors is going to give you the best odds. Titleist never really marketed him to sell clubs. Nike will.

Of course, Rory McIlroy wasn’t the only new signing for Nike. Team Swoosh also added Nick Watney (5 PGA Tour wins), Kyle Stanley (1 PGA Tour win), as well as Seung Yul Noh, and Thorbjorn Olesen.

Granted, those last two names probably don’t exactly get your heart thumping, but Seung Yul Noh could serve as Nike’s gateway to the lucrative South Korean market. Thorbjorn Olesen…that’s just fun to say. Try it with me…Thorbjorn Olesen. Thorbjorn Olesen.

Even without McIlroy, the combination of Watney and Stanley is arguably the best combo pickup of any OEM. Toss McIlroy into the mix, and there’s simply no doubt that, on paper anyway, Nike out-signed its competition.

Prevailing Philosophy:  Rory Knows Winning Sells.

Callaway

Ask anyone at Callaway, and they’ll all tell you the same thing. “Things are different now”.

We’re not certain exactly what that means, but there are absolutely signs of real change coming out of Callaway.

The R&D guys won’t talk about clubs without mentioning Chip Brewer’s influence. We’re seeing a more social approach to customer engagement, and a concerted effort to redefine the brand. If the revamped Tour Staff is any indication, what Callaway wants more than anything is to associate themselves with extreme (XTREMEly, XHot) distance.

From what I can tell, while still in its infancy, the approach is starting to gain a little traction, but success at retail in the US still begins, and may even end, with success on the PGA Tour.

To that end, and not be outdone – at least not in terms of the raw numbers –  Callaway signed Andres Gonzales, Nicholas Colsaerts, Gary Woodland, Ryo Ishikawa, Chris Kirk, and long driver monster, Jamie Sadlowski.

Colsaerts and Woodland are two of the longest hitters on tour. Jamie Sadlowski is as close to a household name as you’ll find for a long drive competitor (which is still as far as he can hit the ball away from actually being a household name) Gonzales is an affable character that seems to resonate well with fans (he covers the engagement piece of the equation), and Ishikawa gives Callaway the top Japanese golfer – which like Nike’s signing of Seung Yul Noh, gives them better access into a lucrative foreign market where they’re already well positioned. Ishikawa also brings a youthful face to a brand that is otherwise starting to look a little dated.

On paper, it reads pretty well. But…

For all the hoopla, Callaway’s 6 name signings bring a grand total of 2 PGA Tour victories to the table. If winning with distance doesn’t pan out, we could be looking at the single biggest waste of sports dollars since the Raiders inked JaMarcus Russell.

At the risk of stating the Johnny-Miller-obvious; this all comes down to Colsaerts and Woodland. If they play to their perceived capabilities, Callaway’s new guard could be major factors in their 5 Year War to overtake TaylorMade. If they don’t, Callaway still has Mickelson, Els, and I suppose, Timberlake.

Prevailing Philosophy: Distance Sells.

TaylorMade

Nobody in their right mind is going to suggest that anybody that joined team TaylorMade this season even loosely qualifies as a major impact signing.

While PGA Rookie of the Year John Huh could turn out to be something, Stewart Cink is arguably the most recognizable addition – even if his only TaylorMade tools will be his driver and fairway woods. Of course, he’ll be carrying them around in a TaylorMade bag, which should give them all the brand recognition they really need.

Other signings – Ryan Moore, J.J. Henry, and Brian Davis, aren’t expected to give good TV face late Sunday afternoon, but like many others in the TaylorMade stable, they add to the spread, and all of the above – even Cink, are still capable of competing in, and even stealing a win, in just about any tournament they enter.

Take Cink (6 PGA wins / 1 Major) out of the equation, and the new TaylorMade guys still have one more combined PGA win than the new faces of Team Callaway.

Prevailing Philosophy: What We’re Doing is Working, So We’ll Just Keep Doing It (which is different from “Just Do It”).

Cobra-PUMA

There are 3 companies in golf that will more or less admit that they desire to be #1. TaylorMade is already there. Nike and Callaway have made it known that they’re coming for them. Nearly everyone else will tell you that they’re not trying to compete in quite the same fashion…at that same level.

Most of the time, I don’t believe them. I believe PING would love to be #1 across the board. Titleist too. But Cobra-PUMA…their story is they’re not trying to be #1 at anything, and I actually believe them.

Cobra-PUMA is building a culture brand. I say that with no intent to detract from clubs that perform as well as anybody’s, but rather to illustrate that Cobra-PUMA is trying to develop a brand identity that resonates with a specific set of consumers.

As a brand, It’s not just about what they make; it’s about who they are and what they represent.

Case in point is the recent signing of Jesper Parnevik. Apart from Rory McIlroy, the Parnevik signing is perhaps the most significant of the season. He’s probably not going to win many tournaments, and he’s probably not going to be competitive in the majors, but more than any other signing, he fits perfectly within the larger scheme of the brand he now represents.

There’s no better guy to help Cobra-PUMA expand its identity from the brand for the young to the brand for the young at heart. As I said in a recent forum post, Jesper Parnevik can make it cool for older guys to dress like Rickie Fowler – and that makes it cool for me to dress like Jesper Parnevik.

Think Parnevik doesn’t matter? Check out the margins on apparel sometime.

Worth noting – although he’s past his prime, his 5 career PGA Tour victories are only 1 behind Cink and McIlroy, and equal that of Nick Watney.

Prevailing Philosophy: Golf is Fun…or at least it should be.

Titleist

If there’s a loser in all this tour staff shuffling, it’s Titleist. Of the 17 names I’ve listed above, 8 of them (including McIlroy, Watney, Stanley, and Colsaerts) left Titleist to sign with new sponsors.

Usually when there’s this much looting it’s preceded by an earthquake. The end result is the appearance that Team Titleist is playing an unfortunate game of reverse musical chairs where there are plenty of seats and not nearly enough asses.

Now in fairness, while this is perhaps as hard as the brand has ever been hit by turnover in a single season, it’s very much Titleist business as usual. Woods, Els, Mickelson, even Fowler, all left Titleist as they’re careers were beginning to take off.

In many respects Titleist serves as the Tampa Bay Rays of the Golf World. They develop the talent, and then it gets too costly they let them move elsewhere. Some, kinda like Wade Boggs, will eventually return and end their careers with Titleist.

The good news is Titleist still has Steve Stricker, and Adam Scott. They’ve got real talent in younger guys like Bud Cauley and Patrick Cantlay, and they’ve still got plenty of the other guy’s staffers playing the ball.

I’m  not sure how much longer the ball thing will last as TaylorMade and Nike put more pressure on staffers to play their own balls, but for now anyway, Titleist, despite losing some of its most well-known talent, is still well positioned to compete exactly as it has for the last several years.

Prevailing Philosophy: We Still Have the #1 Ball in Golf

Other Notables

PING retained Louis Ooshuizen, Hunter Mahan, and Bubba Watson. For now it appears that Keegan Bradley, and Graeme McDowell are staying put with Cleveland, and Luke Donald is staying with Mizuno.

Predicting the Future

While nothing is absolute, the recent signings suggest that both Callaway and Nike are serious about trying to overtake TaylorMade. TaylorMade is doing its part to stay on top.

Ultimately who proves to be the most successful at leveraging their staff to achieve retail success will be determined by who is best able to mesh traditional advertising with aggressive online campaigns and customer engagement.

TaylorMade has a strong history of doing just that. New Callaway endeavors like their Callaway Talks and Friday Office Golf lessons show real signs of promise, but they’ll need to sustain and grow the momentum. Nike’s social media following absolutely dwarfs the competition, but thus far they’ve been unable to translate that to real engagement and ultimately retail success.

I expect these 3 companies to fight it out for the next several years, with the new leader in 3, or even 5 years determined not by who creates the best performing products, but rather by who is best able to leverage The Tour while avoiding a major disaster at retail.

For everyone else…PING, Cleveland, and even Titleist, it’s business as usual.