The Acushnet Company, which manufactures the Titleist and FootJoy brands, and Rory McIlroy, jointly announced that McIlroy's relationship with Acushnet will not extend beyond December 31, 2012. Since he turned professional as an 18-year old in September 2007, McIlroy has played Titleist and FootJoy equipment, which helped to propel him to become the world’s #1 player.
"Our goal has been to provide Rory with the best equipment and service that would help him be the best player he could possibly be," said Wally Uihlein, Chief Executive Officer, Acushnet Company. "He has been a great ambassador for the Titleist and FootJoy brands, and in turn, we are proud of how our equipment has contributed to his success. We wish Rory all the best, both personally and professionally, going forward."
In his young career on the PGA TOUR, McIlroy has earned six victories, including two majors. He has amassed over $13 million in official earnings, including more than $8 million in 2012, before turning 24 years old. He has also won four times on the European Tour in his career and ranks first in the Race to Dubai with European Tour earnings to date of 1,190,937 Euros.
"I would like to thank Wally Uihlein and all of the tour staff and employees at Titleist and FootJoy for everything they have done for me since I turned professional in 2007,” said McIlroy. "I have enjoyed five very exciting and successful years with the company and I will always appreciate the contribution Titleist has made in helping me become the player I am today.”
Speculation has swirled in recent weeks that a deal is already in place that will see McIlroy head to Nike Golf for his future equipment needs. It has yet to be confirmed where the world’s #1 player will in fact land. The impetus for such a move is believed to be economically motivated. Published reports have already pegged a deal to secure McIlroy’s services at $25 million a year. Regardless of the amount, its apparent the cost of doing business (whatever the true amount is) didn’t fit into Acushnet’s business model. Titleist’s primary strategy is to be the most played ball consistently in competitive golf. This strategy validates the performance platform of its golf ball brand. The Titleist strategy is "how many" versus "who" as it has a history of letting some of the bigger fish go such as Tiger Woods and Phil Mickelson before McIlroy. The departure of such notables hasn’t disrupted its business to date. Presently, Titleist has in the neighborhood of 70-80 full product line players around the world that use its golf ball and golf clubs. It’s these players and specifically their performances respectively that help to validate the performance of Titleist’s metal woods, irons, wedges and putters. Once again it is a product validation strategy, in numbers, not a "who strategy." Nick Watney’s recent victory at the CIMB Classic is an example of the company’s strategy.
The Acushnet Company has a history of exercising fiscal prudence in running its business. This year Titleist has enjoyed a large number of highly world ranked players (Rory McIlroy, Adam Scott, Webb Simpson and Jason Dufner inside the top 10 along with the likes of Steve Stricker and Nick Watney) to help tell its story. It represents both an enviable situation of strong players playing extremely well on a week-to-week basis but a potentially untenable financial reality such as McIlroy that deserves a significant pay hike. Its reasonable to suspect that despite McIlroy’s popularity, he wasn’t going to be able provide anywhere near the return on investment needed to justify the additional spend to keep him in the Titleist/FootJoy stable of players. Time will tell where he lands and whether he is able to deliver on and off the golf course based on the new economics for his next partner.