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Web Street Golf Daily Pulse

VOLUME 1, NUMBER 234

Friday, December 3, 2010

ANY IDEA WHO SAID THIS? “There's been too big a deal made of it. The PGA TOUR won't miss me because, I mean, no one player is bigger than the TOUR. I don't feel it is, anyway.”

ON THIS DAY: In 1972, Jack Nicklaus won the Walt Disney World Open for the second consecutive year. He won by a tournament record nine strokes.

TIGER BECOMES A BUSINESS CASE STUDY: Carnegie Mellon University's Tepper School of Business has examined the relationship between Tiger Woods and Nike Golf as a case study to determine what effects, if any, were felt in the market by the revelations of his personal life. The research was conducted at the Tepper School of Business by Kannan Srinivasan, Rohet Tolani Distinguished Professor in International Business and H.J. Heinz II Professor of Management, Marketing and Information Systems; Timothy Derdenger, assistant professor of economics and strategy; and doctoral candidate Kevin YC Chung. Golf Datatech LLC, a leading provider of retail marketing information for the golfing industry, extended a rich data set for analysis.

"The industry-wide data that was made available and the unique circumstances involving a high-profile celebrity made this an excellent opportunity for us to study the real-economic impact of celebrity endorsement by focusing on a single product," said Derdenger. "The retail data shows clear movement in sales and brand market share at particular time points that coincide with Woods' endorsement of Nike products and during the period of negative publicity associated with his personal scandal, which began last year."

In golf ball terms, the endorsement of Nike products by Tiger Woods, which began in 2000, resulted in the acquisition of approximately 4.5 million customers and $60 million dollars in profit (in 1997 dollars) for the last 10 years, according to the research. In the six months following Woods' highly publicized personal scandal, Nike lost approximately 105,000 customers, according to the findings. However, these losses were not gained by other brands as the negative publicity resulted in a net loss to the golfing industry, overall, of $7.5 million in profit.

"Although several major sponsors cut ties with Tiger Woods -- Nike did not," said Derdenger. "So we examined the net effect on Nike's sales and market share. What we found is that by maintaining their relationship with Tiger Woods, Nike's overall profit in golf ball sales was $1.6 million greater than it would have been without him."

The thesis further projects that Woods influence extended beyond simply Nike, yet Nike was somewhat protected since it has a long standing relationship with him in place well before the revelations of his private life came to the surface.

"From the findings of this study, which involve one specific product, we conjecture that similar market impacts have been realized across a full line of golfing equipment, which Tiger Woods was paid $180 million for 10 years (in 1997 dollars) to endorse. Having found that $60 million was recovered in the golf ball sector alone, we project that this would intensify the overall profits and losses across the golfing industry," added Chung.  "Although we have found Woods' continued endorsement to be profitable for Nike, this may not translate into similar results with non-golf related consumer goods -- where the celebrity is not inherently part of the enthusiasts community or where his financial success is not directly tied to the use of the endorsed product," said Chung.

The study, "Economic Value of Celebrity Endorsement: Tiger Woods' Impact on Sales of Nike Golf Balls," was completed in November 2010 and is awaiting publishing.

WAIT UNTIL NEXT YEAR: Is there an off-season for golf? Its getting harder and harder to identify as professionals play 12-months out of the year and or for that matter new product introductions are immune to the calendar or seasons. Adams Golf (ADGF: NasdaqCM) is the latest to announce what it has coming early next year. The Speedline F11 drivers and fairway woods story centers on the Velocity Slot Technology (three visible channels precisely located on the sole and crown to keep the airflow attached to the club head longer). According to Adams Golf, it creates 35 percent less drag and increases club head speed, which represents over six more yards of carry distance in the F11 driver.

“As the leader in aerodynamic technology in driver design, we are pleased to offer golfers of all abilities a club that delivers more distance yet remains extremely easy-to-hit,” said Chip Brewer, President and CEO of Adams Golf.  “The addition of the Velocity Slot Technology to Speedline F11 has definitely created the fastest, longest and most forgiving driver on the market today.”

The Speedline F11 Fairway Woods will be offered in both stainless steel and titanium models. It features a deep, visible channel on both the crown and sole that acts as a leaf spring, according to Adams, to increase deflection and reduce stress on the face for stability at impact. According to Adams Golf research, the F11 fairway woods have 21 percent improvement in forgiveness across the entire face, better ball speeds and up to 12 yards of increased distance. Adams Golf staff members, including Tom Watson and Ryan Moore, who immediately placed the club in their bags.

“Historically, fairway woods had relatively low COR (coefficient of restitution) values due to the fact that their head and face sizes had to remain smaller for playability purposes,” stated Scott Burnett, Director of Advance Product Development for Adams Golf.  “By applying Velocity Slot Technology to our Speedline F11 fairway woods, we’ve been able to expand the COR across the entire face without adversely impacting size or durability, thereby setting a new standard for performance and forgiveness in the category. This improvement is directly proportional to the impressive COR improvements that occurred in drivers in the mid-2000s as their head size increased.”

The entire lineup of Speedline F11 products will ship to golf shops beginning February 1, 2011.  The men’s versions of the driver and the fairway wood will debut with a choice of high-performance shafts: the high- launch Aldila Voodoo VS or the mid-launch Matrix Ozik XCON.  The women’s versions are standard with lightweight Graffaloy graphite shafts. The suggested retail price (SRP) for the Speedline F11 drivers is $399.99.  The SRP for the Speedline F11 fairway wood is $299.99 for the stainless steel model and $399.99 for the titanium model.

HOW DOES NEXT YEAR LOOK: The PGA TOUR has released its schedule for the 2011 season, which includes 41 tournaments through the PGA TOUR Playoffs for the FedExCup, four Fall Series tournaments and a four-event swing through Asia and Australia to conclude the season. Among the notable scheduling changes from 2010 is an open week between the second and third Playoff events – the Deutsche Bank Championship and BMW Championship – and the Viking Classic’s move from the Fall Series to the PGA TOUR Regular Season, playing opposite the British Open (July 14-17). The Reno-Tahoe Open, which had been held the same week as the British Open, moves to the same week as the World Golf Championships-Bridgestone Invitational (Aug. 4-7).

“The 2011 schedule reflects the overall strength and stability of the PGA TOUR,” said PGA TOUR Commissioner Tim Finchem. “We continue to work on tournament sponsorship commitments and are pleased to welcome new sponsors in Hyundai (Tournament of Champions, Kapalua), Nationwide (the Memorial Tournament’s presenting sponsor) and Cadillac (World Golf Championships at Doral).

“In addition, we are delighted to announce that FedEx will be the title sponsor of the FedEx St. Jude Classic in 2011,” Finchem added. “We continue to focus on a multi-year commitment to assure the tournament’s future success in Memphis.”

A format change for the World Golf Championships-Accenture Match Play Championship will be implemented in 2011. The quarterfinals shift from Saturday morning to the afternoon and the semifinals move from Saturday afternoon to Sunday morning, with 18-hole championship and consolation matches being held Sunday afternoon. “We believe this will enhance the viewing experience for the fans on site as well as our NBC television audience,” Finchem said. To access the 2011 schedule CLICK HERE

NO NEED FORE A CHANGE: Bubba Watson is following the same plan as Louis Oosthuizen. He’s sticking with PING after his most successful year ever. “Everything came together this year,” said Watson. “I won my first Tour event, was close to winning a major, and played in the Ryder Cup, so it feels great. The people over at PING deserve a lot of credit. I’ve always played PING clubs because they feel right and I know they’ll perform, so I can play any shot I want. Their technology is amazing.” As a result, he signed a multi-year agreement to continue playing PING golf equipment.

“Bubba’s game is a lot of fun to watch,” said John A. Solheim, PING Chairman & CEO. “It was exciting to see him win for the first time and then carry that momentum through the rest of the year into the Ryder Cup. With his strong performances all season, especially at the PGA Championship, the golf world was reminded what a tremendous all-around player he is. We’re happy to continue a relationship we’ve had for many years.”

SISTER, SISTER: aboutGolf announced a new distribution partnership with Golf Master, Ltd in Russia. Sisters and professional golfers, Anastasia and Maria Kostina, discovered that the aboutGolf simulator is an invaluable tool for working on their own golf games and, as a result, wanted to bring the same opportunity for improvement to their fellow Russian golfers through their business venture, Golf Master, Ltd and a partnership with aboutGolf. READ MORE>>>

CHIP SHOT: Miura Golf’s featured dealer is Chip Usher out of Savannah, Ga. READ MORE>>>

WEB GEMS:

A LITTLE BIRDIE IS HELPING TO SHOW THESE GUYS HAVE PERSONALITY: One of the knocks on golf is that players often appear robotic. Player personalities rarely are on display, which has been a consistent theme regardless of the era in question. At best players have expressed themselves through clothing. Whether it was the late Payne Stewart or John Daly’s Loudmouth look that suggests more often than not he dressed in the dark, individualism hasn’t been considered an asset amongst the show ponies on Tour. But with modern technology, that is changing. The advent of Twitter might not seem like a big deal but in the 140-character outpourings of the game's biggest names it is possible to detect a revolution. READ MORE>>>

OUT OF THE WOODS: The former world No.1 has endured a tough 2010, however he put everything behind him to lead outright for the first time in over a year. Woods showed signs he is back to his best. READ MORE>>>

ITS STILL WIDE OPEN: Geoff Ogilvy seized the halfway lead at the Australian Open with a second round of 65. There were, however, contrasting fortunes for opposing Presidents Cup captains, Greg Norman and Fred Couples. READ MORE>>>

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ANSWER: Rory McIlroy

THE INFORMATION CONTAINED IS BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED. THE OPINION EXPRESSED IS THAT OF TERRY O AND SHOULD NOT BE CONSIDERED A SOLICITATION TO BUY OR SELL SECURITIES IN ANY OF THE COMPANIES DISCUSSED WITHIN THIS NEWSLETTER. CONTENTS OF THIS NEWSLETTER MAY NOT BE REPRINTED OR REBROADCAST WITHOUT THE EXPRESSED WRITTEN CONSENT OF TMAC GOLF