Lawsuit Alleged Sexual Harassment At Bandon Dunes, Kemper

Bandon Dunes and parent company, KemperSports, are center of sexual harassment lawsuit reported on by Sara Roth of NBC's affiliate station in Portland, KGW.

The case centers around Bandon Dunes GM Hank Hickox, who was quoted in 2015 praising the woman who ultimately filed the suit after she was named hospitality professional of the year.

Roth writes:

Court documents show the allegations aren’t just limited to the golf club in Bandon, Oregon. Two employees claim the alleged misconduct has been pervasive for years at the corporate office. Top executives are accused by the lawsuit of not only condoning the behavior but also participating in sexually inappropriate conduct themselves

The video report:

Kemper's spokesman, in a story by Golf.com's Sean Zak, says the Bandon suit has been withdrawn but would not say it had been settled.

In a statement to GOLF.com, KemperSports' director of communications B.R. Koehnemann, wrote, "The article that was written yesterday refers to a case that has been withdrawn. On Friday, November 10, 2017, Ms. Hamblin acted to dismiss the lawsuit. The court was informed and the case was removed from the docket. When informed of the alleged inappropriate behavior at Bandon Dunes, the Company took decisive remedial action, and Mr. Hickox is no longer employed by KemperSports or Bandon Dunes. Independent outside counsel has been retained to further investigate the situation."

John Strege at GolfDigest.com also reviewed the story and contacted Kemper President Josh Lesnik, the subject of allegations in the lawsuit and reported on by Roth. When company failed to properly address Darla Hamblin's complaint, she soon learned from another employee of purported misconduct at KemperSports and the alleged company culture became part of the case.

“An incident did occur at Bandon Dunes." Lesnik said in a statement. "We handled it appropriately and effectively. Hank no longer works for us, and the staffer acted to dismiss the lawsuit. Any allegations about me are false, and our Board of Directors has launched an investigation that will find the truth.”

Bloomberg: Golf Course Deduction Currently Safe But Facing Increased Scrutiny In Trump Era

As Republican tax reformers are eliminating many write-offs, the current House version of a new tax bill currently includes the long-controversial deductions for golf course owners promising never to develop their land. While the "loophole" has come close to being closed, it's getting new attention with President Donald Trump's ownership of golf courses using the deduction in ways that contradict the spirit of the law.

Dan Wilchins and Prashant Gopal, reporting for Bloomberg, present a balanced picture, including the important counterpoint to arguments for eliminating the deduction and the relatively small amount of revenue that would be generated by closing the loophole.

In some cases, the tax benefit can make sense. There are communities where golf courses are some of the only open space available. Without the easements, an owner might be tempted to sell out to the highest bidder, which might develop housing on the space, said Sylvia Bates, director of standards and educational services at the Land Trust Alliance, a conservation group.

But in practice, the deductions that land owners take for golf courses are enormous compared with the conservation value, said Ruth Madrigal, a tax lawyer who worked on conservation easements for the U.S. Treasury department during the Obama administration. A developer can build homes and a nearby golf course, get a conservation easement on the links and claim a deduction that can pay for the entire development, she said.

Callaway, Acushnet Give Upbeat Q3 2017 Earnings Reports

It was encouraging to read upbeat remarks from the leaders of golf's two biggest publicly traded companies, Callaway (here) and Acushnet (here) each summarizing their third quarter 2017 earnings report calls with analysts.

Callaway announced big gains in all areas:

In the third quarter of 2017, as compared to the same period in 2016, the Company's net sales increased $56 million (30%) to $244 million. This increase was led by increases in all operating segments, namely Golf Clubs (+ 21%), Golf Balls (+20%), and Gear, Accessories and Other (+72%) as well as increases in each reporting region, namely the United States (+33%), Europe (+23%), Japan (+28%), Rest of Asia (+28%), and other countries (+23%). The increase in the Golf Clubs and Golf Balls segments reflects the continued success of the Company's EPIC line of products as well as the Chrome Soft golf ball franchise. The increase in Gear, Accessories and Other primarily reflects the successful acquisitions of the OGIO and TravisMathew brands which were completed in 2017. 

As a result of this significant increase in sales, as well as a 110 basis point improvement in gross margins, the Company recognized a significant improvement in profitability during the third quarter of 2017. Due to the seasonality of the Company's business, the Company often reports a loss for the third quarter. However, in the third quarter of 2017, the Company reported an $11 million increase in operating income to $6 million as compared to an operating loss of ($5) million in the third quarter of 2016.

CEO Chip Brewer's outlook:

"Looking forward, we are pleased that our year-to-date performance has allowed us to increase our full year sales and earnings guidance," continued Mr. Brewer. "We also continue to be cautiously optimistic about the golf industry overall, thanks to what we believe are improving fundamentals. Lastly, our brand momentum remains strong and we believe we are the #1 club and # 1 hard goods market share brand in every major region around the world." 

Other than not knowing what Acushnet (Titleist/Footjoy) COO David Maher meant with a mention of "a strong pyramid of influence validation," I could understand the earnings report and the numbers sounded positive, despite a small decline in golf ball sale profits chalked up to promotional pricing as they shift to a new product line.

CEO Wally Uihlein, on the state of business:

"We are encouraged to see that the global golf industry continues to structurally improve through the first nine months of 2017. While near term, US demand trends have been impacted as the focus shifted to important life priorities in areas hit by the recent hurricanes, it is good to see many areas are recovering well as a sense of normalcy returns.

"We are confident that our proven strategy, dedicated associates and valued trade partners will enable us to leverage a stronger industry and extend our success over the long term."

The numbers:

In the third quarter Acushnet posted sales of $347 million, up over 2% on a reported basis and up near 3% on constant currency. For the first nine months of 2017, sales of $1.209 billion were off 2.7% from last year or 2% on constant currency. Adjusted EBITDA for the quarter was $32.2 million, up 15% from last year and $182.5 million for the nine month period, a 4% decline.

At the segment level, golf ball sales were off 3% for the quarter and 2% year-to-date, both on constant currency. New Pro V1 golf balls have posted sales and share gains through the first three quarters of the year as golfers have embraced the new and improved Pro V1 and x models.

Sales of our performance models have declined as these have been most impacted by competitive promotional activity in what is the back half of their two year product lifecycles. We see this promotional activity largely as a byproduct of the retail correction as golf ball companies come to terms with the new inventory and retail square footage realities of the market.

Report: Golf Business Influencer Giles Morgan Leaves HSBC

John Hopkins at Global Golf Post says HSBC head of global sponsorship strategy Giles Morgan has left the financial services giant after 12 years.

Morgan has been a passionate supporter of professional golf and in efforts to grow the game, including this ambitious campaign. He also led the company to start an annual Golf Business Forum attended by many industry heavyweights, though a 2017 edition is not currently listed on the official website.

Hopkins noted the many events Morgan has steered sponsorship dollars toward:

As such he was the man behind his company’s commitment to events such as the WGC-HSBC Champions, recently held in Shanghai, China; the HSBC Women’s Champions event held in Singapore last March; and the Abu Dhabi HSBC Golf Championship, staged in the Middle East last January. HSBC was also one of the patrons of the Open Championship.

HSBC was also known for elaborate pre-tournament publicity stunts in the Morgan era, including this one apparently gone slightly awry for Henrik Stenson's ribs.

They're Back...Sort Of, The Costco Kirkland Is Back In Some Form

Thanks to all who sent the GolfWRX post identifying the latest Costco "Kirkland" ball to be offered for sale, just as the CEO promised in January. The original drew great attention and reviews and after selling out, has become a much-demanded cult classic.

While they are billing it as the same ball with "Hot List" branding, the current iteration is only for sale to Costco members, with a 2-order-per-membership limit and no certainty the latest ball is the same as the last (given that it was likely a one-off production run of old Taylor Made cores).

Nonetheless, it spices up discussions about the ball, adds more intrigue to the lawsuits and whether this is a legitimate contender in the golf ball market, as some originals proved to be, or just an occasional stunt.

Here they are Costco members...

Bridgestone CEO: Tiger More Valuable As An Endorser Than He Is As A Player

Catherine Campo at CNBC summarizes Bridgestone CEO Angel Ilagan's assertion that Tiger "on board" is spurring growth for the game and Bridgestone.

More fascinating is Ilagan's assertion that Tiger is better endorsing than playing.

"He actually has more power as an endorser than he does as a player," the CEO said.

He added that Woods is "the Michael Jordan of golf" and "the single golfer who's had the greatest impact of bringing consumers into [the game]."

Ilagan's suggested that as long as Woods is around (on or off the green), the golf industry is safe.

"I think the industry is in a little bit of panic, although it really need not be," he added.

All of the delusional talk can be viewed here...

Bridgestone bets on Tiger from CNBC.

Acushnet Announces Retirement Of Wally Uihlein, Effective January 1, 2018

Big news out of Fairhaven as the longtime leader of the Acushnet family of brands is retiring at year's end.

David Maher, the current top lieutenant at Titleist, will take over January 1, 2018.

For Immediate Release:

Acushnet Holdings Corp. Announces Retirement of Wally Uihlein, President and CEO, effective as of January 1, 2018

David Maher appointed President and CEO

FAIRHAVEN, MA – September 25, 2017 - Acushnet Holdings Corp. (NYSE:  GOLF) (“Acushnet”) announced today that Wally Uihlein, President and Chief Executive Officer, has notified the Acushnet Board of Directors of his plan to retire, effective January 1, 2018.  Uihlein started with Acushnet in 1976 and has been the senior golf executive since 1995.  Uihlein will remain on the Acushnet Board of Directors and also become Advisor to the Chairman.

Acushnet also announced that its Board of Directors has appointed David Maher, Acushnet’s current Chief Operating Officer, to succeed Mr. Uihlein as President and CEO, effective upon Mr. Uihlein’s retirement.  Mr. Maher, age 49, joined the Company in 1991 and was appointed Chief Operating Officer in June 2016.  Prior to that, Mr. Maher was Senior Vice President, Titleist Worldwide Sales and Global Operations from February 2016 to June 2016 and Vice President, Titleist U.S. Sales from 2001 to January 2016.   

Commenting on the announcement, Acushnet Chairman Gene Yoon said "We thank Wally Uihlein for his forty plus years with Acushnet and the terrific leadership he has provided during this time.  I am very happy that Wally will remain on the Board and also serve as Advisor to the Chairman.  Acushnet will continue to benefit from his extensive knowledge and experience in areas such as strategic planning, acquisitions, player promotion and golf equipment regulatory matters.”

Yoon continued "I also want to congratulate David Maher on his promotion to President and CEO.  During his twenty six years with the Company, David has demonstrated both the leadership and strategy skills that will ensure that Acushnet will continue to be one of the leading companies in the worldwide golf industry.”

Golf Datatech: Online Equipment Orders Up 50%

Mike Stachura parses the latest Golf Datatech numbers for GolfDigest.com and spots a few interesting trends, including online orders increases but also points out some numbers that suggest retailers will still sell most golf clubs for the time being.

According to the survey, online shopping for golf equipment was up more than 50 percent over a year ago. In addition, half of the survey’s respondents say they go online daily to get information about golf. In a 2016 GPAU study, when answering the question where they were most likely to make their next golf equipment purchase, respondents said an online retailer 13 percent of the time.

PXG Suing Retailers Over Taylor Made Irons Sets Bizarre Precedent Worth Watching

Having been rejected by courts in stage one of a patent fight over irons, PXG's Bob Parsons has taken his fight to the retailers selling Taylor Made's P790 irons, as multiple outlets reported.

From Mike Stachura's excellent Golf World analysis where he names Worldwide Golf (Edwin Watts, Roger Dunn), PGA Tour Superstore, Golf Galaxy and Dick's Sporting Goods as unsuspecting parties brought into the case by Parsons. But they apparently should not be shocked!

According to Allan Sternstein, professor of intellectual property and director of the IP and Entrepreneurship Clinic at the University of Arizona, “Those that infringe a patent are anyone who makes (manufacturers), uses (consumers), sells or offers to sell (retail outlets, golf shops, etc.) a product that falls within the scope of one or more claims of the patent. Accordingly, suing a retailer for patent infringement is totally appropriate under the law.”

Still, Al Morris, president of Worldwide Golf, said he was “blown away” when he learned Friday morning that he’d been sued by PXG. Morris was part of a team that successfully invalidated patents in a case filed by Max Out golf over clubfitting patents, a more than two-year struggle that cost Morris "hundreds of thousands of dollars" but ultimately culminated with victory in a review by the U.S. Patent and Trademark Office last month.

“I don’t understand it,” he told Golf Digest late Friday. “This shocks us. I think he’s doing a disservice to the industry. I just don’t get it.”

Chris Nickel noted this at MyGolfSpy:

By suing retailers, PXG is taking the road less traveled, but it is a road other have taken with some success. Strategically, the move might make sense, although it’s certain to draw the ire of the retail chains targeted, and likely the mainstream wing of the industry as a whole. The reality is these chains won’t ever be part of PXG’s business plan, so there’s no risk of PXG losing sales directly, and we suspect that PXG Founder, Bob Parsons, doesn’t much care what his competitors think.

It's stating the obvious: Parsons is going after retailers at a time they are struggling and yet still providing a more cost effective option for buying fitted clubs. Not everyone can afford the PXG experience and club, so feel free to think little of Parsons for dragging the good folks in retail into this fight. He certainly is entitled to protect his patents but if he cared about golf, he wouldn't drag the retailers into this.

Here is another angle worth noting: if we get to the "variable distance ball" or distance rollback stage where a product designed to be used on classic courses comes to market, patent wars may develop in an effort to slow down the manufacture and sale of such a ball.

Parsons may have set the stage for other manufacturers to go after retailers or even golf professionals who would sell a product designed to make a course more safe or to play as intended. 

What PXG Must Prove To Win Its Taylor Made Suit

Golf.com's Michael McCann tries to decipher what PXG must do to prove its patent suit against TaylorMade says this will come down to a battle over "new" and "existing" designs.

The lawsuit referenced by Parsons was filed in the U.S. District Court for the District of Arizona and is embodied in a 277-page complaint authored by attorneys from the law firms Loeb & Loeb and Jennings, Strouss & Salmon. The complaint asserts that TaylorMade has infringed upon multiple patents related to PXG's "revolutionary iron," which purportedly contains "an expanded sweet spot, having an ultra-thin club face, and an elastic polymer material injected in the hollowbodied club head."

PXG contends that the design of TaylorMade's P790 irons copies patent-protected designs for PXG's clubs.

Parsons Tweets He's Sued Taylor Made Over P790 Irons

Looks like we have a fun patent battle looming with PXG Founder Bob Parsons going after Taylor Made according to...Bob Parsons.

Taylormade Golf's new P790 irons infringe upon many PXG patents. Sued them in Federal court today!

— Bob Parsons (@DrBobParsons) September 12, 2017

Chris Nickel at MyGolfSpy reminds us that golf companies sue each other all the time, it's just a bit unusual for the founder of one to announce on Twitter.

While he isn't sure what the issue is, Nickel offers an assessment that includes this:

While neither TaylorMade nor PXG has offered any official statement, one has to think the basis for the suit has to do with the injection filled, hollow-body construction that is the foundation of most PXG products. While PXG uses thermoplastic elastomer and TaylorMade uses a TPU-based SpeedFoam, if the patents are broad enough, the material won’t matter. This case will likely boil down to process and construction, not the material composition of the goo.

Through the proverbial grapevine, MGS has learned that PXG anticipated this day would come, but it would have been impossible to foresee which OEM would step far enough over the line to prompt this response from Parson and PXG.

Even better, Parsons can travel to court in his new PXG helicopter reports Ben Aberstadt at GolfWRX.

Acushnet Files Answer to Costco Complaint With Gusto!

Not coincidentally around the announcement of a slight second quarter sales dip of golf ball sales, Acushnet has countered with a lively filing!

David Dawsey at Golf Patents picks apart the claim and notes some of the stronger rebuttal points against Costco's hot-selling Kirkland ball. His conclusion:

Acushnet’s complaint contains a lot of subtle, and some not so subtle, jabs at the Kirkland Signature golf balls. It is hard to comprehend that “over half of the Kirkland Signature Golf Balls tested by Acushnet Company cracked or became structurally unsound before the testing could even be concluded.” Maybe there is some truth to the old adage that sometimes you get what you pay for! Fortunately, most amateurs would probably lose the ball before it becomes “structurally unsound;” in other words, it may not be too smart to play the K-Sig’s that you find in the woods or fish out of the pond.

This was fun from the filing:

34. Distance Performance. The results of the distance tests for the Kirkland Signature Golf Ball and the Titleist® Pro V1® and Pro V1x® golf balls during Acushnet Company’s robot testing demonstrated that the Kirkland Signature Golf Ball travelled a shorter distance than both the Titleist® Pro V1® and Pro V1x® golf balls for 130 mph drives; that the Kirkland Signature Golf Ball travelled a shorter distance than both the Titleist® Pro V1® and Pro V1x® golf balls for 140 mph drives; that the Kirkland Signature Golf Ball travelled a shorter distance than both the Titleist® Pro V1® and Pro V1x® golf balls for 150 mph drives; and that the Kirkland Signature Golf Ball travelled a shorter distance than both the Titleist® Pro V1® and Pro V1x® golf balls for 167 mph drives.