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adidas announced it finally has entered into a definitive agreement to sell its TaylorMade, Adams Golf and Ashworth golf brands. The new owner of the assets is a newly formed affiliate of KPS Capital Partners, LP. The price was US$ 425 million, which is approximately half of 2016’s annual sales of 892 million euros. The funding of the transaction is half in cash and the remainder in a combination of secured note and contingent considerations. The terms and value support the argument that adidas was more than motivated to unload TaylorMade. 

 

The transaction, which is subject to customary closing conditions, is expected to be completed later in 2017. Once completed, the transaction will trigger adidas to record a non-operational loss in the high-double-digit to low-triple-digit million euro range, which will be reported in discontinued operations as part of the company’s 2017 results. This further supports just how motivated (some could argue desperate) adidas was to wash its hands clean from the golf business.

 

“TaylorMade is a leading global golf brand with an exceptionally strong market position. We would like to thank all TaylorMade employees for their many contributions to our company and wish them all the best for a successful future under their new ownership. At the same time, we welcome all adidas Golf employees who will be integrated into our adidas Heartbeat Sports Business Unit,” said Kasper Rorsted, CEO of adidas AG. 

“Within our long-term strategy ‘Creating the New’, our focus is clearly on our core competencies in footwear and apparel and on our two major brands adidas and Reebok.” 

 

 

 

If Tiger Woods can’t even talk (press conference) what chance does he have to win a tournament anytime soon? Remember this is the guy who said repeatedly he only enters to win. Two weeks after pulling out of a tournament due to back spasms, its still plaguing him? And what we do know is that he flew to LA after flying back from Dubai and then was advised by his doctor to remain horizontal! This doesn’t add up or for that matter pass the smell test? It would seem prudence should intervene and in turn caution prevail. Is it too early to suggest the chances of seeing Woods in Augusta with his golf clubs are remote??? Meanwhile, his agent is on the record as saying, “The goal is to get everything to calm down, have it calm down for a while, continue to get treatment and get back to a place where he's chipping and putting and hitting balls. We're not talking about an extended break.” His body, if we are to believe everything we’re told, would appear to say otherwise!

 

People want it, while others do everything they can to prevent it. Ask anyone who plays and the number one thing they want is more distance off the tee. The motto for the USGA and R&A is to preserve the integrity of the game and the root of that centers around distance. Damned if you do, if you are the stewards of the game and damned if you don’t if you are the equipment manufacturer. In this eternal tug of war, it isn’t too difficult to see which side is really winning the battle.

The governing bodies recently published their annual review of driving distance. According to the organizations, driving distance data was used from seven of the major professional golf tours, based on approximately 285,000 drives per year. Data from studies of male and female amateur golfers has also been included for the first time. 

Key facts noted in the paper include:  

Between 2003 and the end of the 2016 season, average driving distance on five of the seven tours has increased by approximately 1.2%, around 0.2 yards per year.

• For the same time period, average driving distance on the other two tours studied decreased by approximately 1.5%.

• Looking at all of the players who are ranked for distance on the PGA TOUR and PGA European Tour, the amount by which players are “long” or “short” has not changed – for instance, since 2003 the 10 shortest players in that group are about 6% shorter than average, while the 10 longest players in the group are about 7% longer than average. The statistics are not skewed toward either longer or shorter players.

• The average launch conditions on the PGA TOUR – clubhead speed, launch angle, ball speed and ball backspin – have been relatively stable since 2007. The 90th-percentile clubhead speed coupled with the average launch angle and spin rate are very close to the conditions that The R&A and the USGA, golf’s governing bodies, use to test golf balls under the Overall Distance Standard.

When you consider the hundreds and hundreds of new drivers that have been introduced from the manufacturing community from 2003 to 2016, all promising greater distance its startling to think the data categorically refutes the marketing departments claims! Forget about all the times the word innovative has been used to articulate the next game changer being promised from marketing departments. The reality, according to the USGA and R&A DATA, is that simply isn’t the case. What this information supports is the argument that the driver you already own is just as long, if not as good as the one you’re about to buy!

Martin Slumbers, chief executive of The R&A, stated, “In the interests of good governance and transparency it is important that we continue to provide reliable data and facts about driving distance in golf. Driving distance remains a topic of discussion within the game and the review provides accurate data to help inform the debate.” Clearly Slumbers will never be confused for a marketing maven!

The 2016 report can be viewed at usga.org via this link and RandA.org.  

 

 

It was an unusual 2017 for the equipment business. Rounds played were flat once again. Despite the static play of recreational players Nike Golf clubs and retailer Golfsmith departed the landscape. TaylorMade was up for sale through the year and no one stepped forward to acquire it. That could change soon, but its  unlikely that it helped sales for the company in 2017.

Callaway Golf reported its full year sales were $871 million, up $27 million or 3% from 2015. Fourth quarter sales were $164 million, an improvement of $11 million on 2015, which aided the full year results. Metal wood sales for the year were $201.8 million, down $20.4 million in 2015. Iron sales were $205.5 million, up $6.4 million versus 2015. Putter sales were $86.3 million, down $251,000, while golf ball sales were $152.3 million, up $9.1 million. The area that represents the greatest improvement for the company was accessories. Callaway reported full year sales of $186.6 million, an improvement of $32.5 million over 2015. Clearly, the overall top line sales growth for the business came from the category of accessories and gear.

Looking at a geographical breakdown, US sales were $447.5 million in 2016, an increase of .3% from 2015. European sales were $122.8 million, down $2.3 million or 1.8%, while Japan reported $170.7 million, an increase of $32.7 million or 23.7% over 2015. It would be a safe conclusion that Japanese accessories were Callaway’s saving grace in 2016 for the sake of producing top line growth.

Callaway reported income before income taxes of $58.4 million in 2016, compared to $20 million in 2015. The company sold a portion of its investment in Topgolf last year, which netted it $17.66 million inflated one-time 2016’s results. 

 

The company's fourth quarter and full year 2016 financial results prepared in accordance with generally accepted accounting principles in the United States ("GAAP") benefitted significantly from the non-cash reversal of a significant portion of the Company's deferred tax valuation allowance. Callaway did not recognize any Federal U.S. income tax in its financial statements. As a result of this reversal, it recognized a non-cash income tax benefit in the fourth quarter of 2016 of $157 million. Also it was required to retroactively recognize Federal U.S. income taxes for all of 2016.  Callaway’s income tax provision therefore increased by $16 million for 2016 for a net benefit of $141 million related to the reversal of the valuation allowance.

 

A comeback story in sports really does something to warm any man or woman’s heart. Whether it’s in team sports such as football and basketball, or individual ventures like boxing and tennis, there will always be a soft spot for athletes who seem to rise from the ashes and claim glory once again. Take Tiger Woods, for instance.

After more than a year of being out of the PGA Tour, Tiger Woods recently announced he’s set to make a comeback – where it all started – in April’s Masters. The former world number one backed himself that he’ll be 100 per cent injury-free come the spring season, making the prospect of a fifth Augusta National green jacket all the more enticing. (Photo: pixabay)

As many recall, Woods went through grueling months of surgery and rehabilitation the past couple of seasons, so many media outlets see this comeback as an exciting time to relive his storied career. Golf experts Play Your Course even complied a handful of memes and featured those in their blog post, ‘Here are the Best Reactions to Tiger Woods Returning to Golf’.

The 14-time Major winner hosted his first press conference in 2017 at the exclusive Riviera Country Club near downtown Los Angeles. This same course will also be the venue of the Genesis Open, a golf tournament set to tee off on February 16th, hosted by Tiger Woods.

He’s slated to play four times in five weeks, including the Farmer’s Insurance Open at Torrey Pines in San Diego, the Dubai Dessert Classic in Dubai (a tournament he won in 2006 and 2008), and the aforementioned Genesis Open. In addition, Woods is preparing to play in the Honda Classic, this time in Palm Beach County, Florida.

As much as his fans are eager to see him on the course and make a comeback, Tiger Woods is more than thrilled to be part of the tour once again. During his recent press conference, he claimed: “I am very excited and just looking forward to competing again and getting out there and playing and being part of it again.”

“I feel good about playing four of the next five weeks and all I need to do is just go out there and do it and see what happens,” Woods added. “But then I know feeling good about it and then going out and doing it, is a completely different matter.”

Of course, many will welcome this comeback but whether he can ever achieve the greatness he reached earlier in his career will be extremely difficult. For Tiger Woods, maybe touring the world and playing in various golf tournaments – post-injury – will revitalize his 41-year-old body. But knowing how competitive the enigmatic Woods is, he will be looking to compete at the very top in the coming months. No one should rule him out regardless of his recent struggles. After all, this is Tiger Woods - arguably the greatest golfer to have ever lived. Here’s hoping for another touching sports comeback story.

 
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