Bob Parsons Says Next PXG's Will "Cost A Lot More"

Thanks to reader Steve for Scott Bordow's AZCentral.com profile of Bob Parsons and PXG. If you've been following the story of this premium--$5000 for a set--clubmaker, the story and quotes will sound familiar. Except the last one.

Discussing the future, Parsons says the next generation PXG's will actually cost more.

"We’re working on a process that has never been done before and is incredibly expensive," Parsons said. "Our next set of clubs are going to cost a lot more."

I'm not sure if this is a statement about the actual cost of the clubs, or a cost passed along by signing tour players, or simply Parsons' sense that there is an audience wealthy enough to pay even more. But it's fascinating!

Costco Board Chairman: The Kirkland Ball Will Be Back

Thanks to reader Jeremy for Zosha Millman's story quoting Costco co-founder and board chairman Jeffrey Brotman saying the wildly popular, thought-to-be-a-one-time-overrun Kirkland ball, will be back!

Millman says Brotman responded to an email request:

"The golf balls will return," wrote Brotman in an email.

TaylorMade Still Very Much For Sale

Daniel Roberts at Yahoo wonders what the signing of Tiger Woods means for TaylorMade's future as a company, and even suggests that landing Woods might make parent company Adidas reconsider its plan to have sold the company.

Roberts writes:

Instead of selling, might Adidas just hold on to TaylorMade, after a double-digit sales rise in the second quarter of 2016, and now that it boasts the most famous active golfer on the planet in its portfolio? Adidas still says no. “There are no changes to our plans for TaylorMade,” a spokesperson says.

Roberts insists the Woods signing "changes things."

It might help the company climb back market share, which would make it more attractive to a buyer. And it makes the brand more relevant and will surely give it new exposure, as all eyes are on Woods whenever he competes. The 41-year-old this week said he is “looking forward” to playing at The Masters in April.

The result could be finally finding a buyer, as Adidas hopes, or a cancellation of that effort.

Given that Woods' previous equipment maker has left the business, it's no guarantee that he or any player can sell enough clubs for today's conglomerates.

As for the specifics of Woods' new deal, Golfweek's David Dusek outlines what Woods will have in the bag.

At his press gathering here at Torrey Pines, Woods said it'll take time to get a set of irons he will play in competition. He also shed some light on the thinking behind his wedge designs.

Q.  Tiger, what process was followed by switching out your clubs, the irons and the wedges and how long do you think that will take.

TIGER WOODS:  With TaylorMade, they're allowing me to take my time and we're going to develop my irons and make the irons and the blades that I want and that will fit my game and what I like to look at in not only the playing position but also feel and obviously what shot window I want to hit it through.  So we're in a process of building that and it's going to take a little time.  And the same with the wedges, but I'm going to use my same grind.  They're going to make my grind on the wedges that I've used over the years.  I've used a couple different grinds over the years with Nike and we're probably going to have a couple of those different grinds available just because when I play in different sands, different parts of the world, I like to switch out my 60s every now and again.  So we're going to have that availability as well.

2017 PGA Show Coverage Primer

The annual gathering of golf industry pros convenes in Orlando (again?) to talk shop and bemoan the state of the industry. I'm sensing a lot more apathy this year compared to most, with the 7-letter word starting with O and ending with O most frequently cited. 

This, even though a trip to Las Vegas every few years would serve up some easy miles for the east coast elite and western energy, the show will carry on in Florida with plenty of coverage.

Golfweek.com sets the table here with a show preview touting 1000 brands and companies.

Golf Channel's full broadcast schedule is here, anchored by Morning Drive setting the table each day. SiriusXM is also all-in on the show, and will be broadcasting from Orlando starting Tuesday.

Their schedule is here.

PGA.com is live blogging the proceedings.

WSJ On Costco Ball: Probably Doomed By Low Price

Thanks to reader JacksonWharf for the Wall Street Journal's Brian Costa effort backing up reports by MyGolfSpy and this site suggesting the Costco Kirkland ball is likely done for now due to a one-time, ultra low dump of cores.

I kept the analogy at Trader Joes $6.99 and $12.99 bottles, but Costa went for the Two-Buck-Chuck metaphor. He says the suppliers of the cores allowing Costco to sell the ball for so little are now unhappy because of golfers' changing expectations.

According to a Nassau executive based in Europe, the company believes the expected retail price for the ball would be closer to $45 per dozen, all costs considered.

This executive said that both Nassau and TaylorMade, its biggest client, are unhappy with the rise of the $1.25 golf ball and that the company won’t sell excess supply in such large quantities again. A TaylorMade spokesman didn’t respond to a request for comment.

Costco's Disruptor Ball Appears Dead, What Did We Learn?

Kudos to MyGolfSpy for reporting the likely demise of Costco's Kirkland ball sold for so little and performing so admirably.  I've been trying to track down details on the Kirkland story and my reporting mirrors that of MyGolfSpy in all but one key area. This we agree on: it's unlikely we'll see Costco replicate such a ball at the same price.

To recap, the $15-a-dozen ball is no longer even pictured on Costco's website after supplies became constrained, largely after MyGolfSpy's rave November 7th, 2016 review comparing the pellet favorably to Titleist's Pro-V1.

Tony Covey writes:

Our source inside Costco has not responded to our calls, however, a source familiar with the situation has told us that Costco has suspended production of the Kirkland Signature until further notice. Whether you want to call it a shortage or a total outage, the lack of Kirkland golf balls available to the consumer is being blamed on supply chain issues.

We're told that, internally, Coscto is saying that production will resume at a later date (and that an email will be sent to customers when stock is available), but we have good reason to believe that is an unlikely scenario.

Essentially Costco was the recipient of a one-time bargain-buy on golf ball cores that allowed them to produce the ball inexpensively. Any Trader Joes shopper knows that vineyards with extra stock but not wanting to taint their brand selling their wine at a lower price will sell otherwise nice product to the chain. Trader Joes then slaps their label on what amounts to limited editions, tells us where the grapes were grown and teases us about its heritage without ever outing the vineyard. Some of the wines are better than others, but they are almost always an excellent value.

So which vineyard dumped these cores on Costco at a low, unlikely-to-be-replicated price? Covey writes:

A representative of Nassau Golf (originally listed as the manufacturer of the Kirkland Signature Ball on the USGA conforming list) has told MyGolfSpy that Costco purchased overruns of Nassau's European-market-exclusive Quattro ball. There is some indication the sale was made through a third party, and that Nassau may not have been directly involved in the deal. The same source confirms that while the Costco balls have a different core color, the material composition and layer thickness are absolutely identical to the Quattro.

With the initial supply of overruns exhausted, Costco effectively has nothing left to sell.

Multiple sources I contacted felt that cores were from an overrun of Taylor Mades that needed to be disposed of when Adidas demanded that their subsidiary squeeze cash out of anything they could. The intent was not to disrupt the industry, but instead to cash in however they could on unused inventory. When GolfWRX noted the initial frenzy and MyGolfSpy's review hit, the ball became a disruptor.

Covey does note that the Kirkland ball's manufacturing location is now back to its mission of making Taylor Made golf balls and that a similar situation to the 2016 "K-Sig" is unlikely anytime soon, if at all.

I mention TaylorMade in particular because the company's tour balls are produced at the same factory as the Costco/Nassau balls, and there are some indications that production of new TP5 has pushed smaller companies to the back of the production line. Even if Costco otherwise had the capability to produce balls immediately, which it appears it doesn’t, the K-Sig wouldn’t be given priority over larger brands and long-term customers.

So what have we learned from this brief disruption of the ball market?

--MyGolfSpy's review was incredibly powerful, GolfWRX once again fueled interest in a product and the tide may have turned for golf equipment reviews. As other sluggish traditional publications sat on the sidelines, perhaps for fear of upsetting major manufacturers or simply because Costco is not a potential advertiser, independent internet reviews fueled the frenzy. (GolfWRX first posted about a "frenzy" on October 28th and while Mark Crossfield only posted a review three days ago, internet influencers established even greater power thanks to the Kirkland ball.)

--A lot of people don't like Titleist. There was much behind-the-scenes joy at Titleist facing a scary competitive hit around the time of their IPO. Some of the hostility could be chalked up to their longtime spot atop golf ball sales. Some of the glee was over the incredible brand loyalty Titleist inspires. Some of it related to their hostile position toward distance rollback advocates. But most hostility centered around about the price of a dozen ProV's compared to others and was aired on forums. However... 

--A lot of people don't know what goes into the cost of a golf ball. The anger ignored how much Titleist and other major manufacturers spend on R&D and manufacturing in the USA. That's right, unlike the Costco ball, we are talking about an American made product. I was amazed how many golfers were not aware that ProV's and Callaway Chrome Softs are made in Massachusetts by American workers. If you like to buy "Made in the USA" products, this episode was an eye-opener.

--Costco now looms as a potential market disruptor under the right conditions. Yes, it took some luck and timing, but they do have the ability to inflict temporary damage on major manufacturers. On the other hand, the episode may have legitimized them as a seller of golf equipment of any kind.

--Golfers and their brand loyalties were tested. Many pushed back on Twitter at my intial skepticism over the long term success potential of the ball. I questioned whether golfers could announce they were playing "a Kirkland 3 on the first tee." While I'm all for anything that lowers prices and increases competition, common sense says most golfers are attracted to their favorite brands for reasons both sane and insane.

--The episode did at least include one fun viral video. And look at it this way Wally, there were much worse clips they could have used!

Club Corp Headed For Breakup?

Greg Roumeliotis and Lauren Hirsch of Reuters report that investors are pushing for ClubCorp to be broken up and that the company has formed a committee to carry out a review.

They write:

It is a serial acquirer in the golf course industry, buying 12 new clubs in 2015 and 2016. It looks to buy locally-owned golf courses and then refurbish them by adding or improving amenities such as up-scale dining and event rooms.

Shareholder FrontFour Capital Group LLC in September published a letter highlighting ClubCorp's low trading multiple as compared with leisure industry peers such Six Flags Entertainment Corp (SIX.N). It questioned some of its business decisions such as ClubCorp's model to pour money into refurbishing its golf course acquisitions.

"It is obvious to us that ClubCorp's reinvention capital expenditures are transformative in nature and are in no shape or form 'maintenance,'" the letter wrote.

How dare they try to transform their properties for a new generation!

Private equity firm KSL Capital bought ClubCorp for $1.8 billion in October 2006 before taking it public in 2013. The company operates more than 200 properties but it saddled with major debt issues.

Callaway Purchases Ogio, True Spec To Invest In Miura

There were two intriguing moves on the business side of golf that became official this week, with Callaway paying $75 million for luggage, golf bag and golf apparel maker Ogio, while investors and True Spec have purchased clubmaker Miura for an undisclosed sum.

Mike Stachura of GolfDigest.com on the Callaway purchase designed to beef up their soft goods operation. The background on Ogio:

Formed 30 years ago after founder Michael J. Pratt developed a sports locker tote bag called the Travel Cube, Ogio (the name stands for “our gear is organized”) became known in golf circles for its unique problem-solving golf bag designs. Notable technologies included the rugged “SLED” (an acronym that stands for Structural Load Equalizing Deck) feature on its rolling luggage and golf travel bags, a hard plastic base and back panel that adds durability and structure. There was also the ZPB (for “zipperless ball pocket”), a pocket with a hinged opening that allowed users to open the pocket with one hand. Ogio also redesigned its golf bags top opening to create easier access, and in 2015 debuted the Silencer, a bag top that locked clubs in place at both the top and bottom of the bag to prevent the clubs from rattling against each other while riding in a cart.

Ogio also has been a player in skateboarding, motocross and BMX, including sponsoring teams of riders in all three sports. It also has an extensive line of backpacks and work bags, as well as the athletic bags the company was founded on.

The full press release, including quotes from CEO Chip Brewer, who will share more in a Thursday conference call.

Meanwhile, GolfWRX's Zak Kozuchowski follows up on an original report about high-end iron maker Miura being sold, by talking to New Miura Golf president Hoyt McGarity. His True Spec Golf will invest and manage Miura.

If you aren't familiar with True Spec, they are an impressive, brand agnostic club fitting system with locations across the globe. I toured their facility at Turnberry and it's nothing short of jaw-dropping in both vision and presentation. But McGarity insists that True Spec will continue to be brand agnostic in fitting their customers, while preserving Miura's clubmaking process.

“True Spec will always be brand agnostic,” McGarity said. “If [another brand’s clubs] are better than Miura’s, that’s a Miura problem. We’re always going to sell the best-performing clubs to our customers.”

True Spec will act as a “fulfillment center” for Miura, McGarity said, specifically as “a shipping and storage place.”

A few photos from the True Spec space at Trump Turnberry:

Oh, and nothing like having the lighthouse as your fitting target!

Golf Digest's What People In Golf Make

Golf Digest's annual list of top salaries in golf took a Parade magazine-style twist this year with the inclusion of more than just overpaid execs. We've got coaches, caddies and other random jobs in the game. It's instructive to see these other jobs worked in given how many lavishly-paid pro-golf executives there are and how lightly paid folks are for prestigious jobs in other sectors.

I did, however, find some of the numbers mentioned by Alan Pittman to be low for positions like General Managers, superintendents and architects at leading clubs. A few even need to be doubled, at least. ($500k for a "leading architect" fee and $100k for a leading architect remodel might have been accurate in the mid-1980s.)

Also peculiar: how many executives listed are retired or gone from their organizations, including one high up the list who has been gone so long he's already been fired from his next non-golf industry job! Another execs name was wrong, but his $407k salary will soften the blow. Shoot, he might even like his salary not being Google-search friendly.

R.I.P.? The (New) Ben Hogan Equipment Company

MyGolfSpy.com is reporting exclusively that the entire workforce at the Ft. Worth company has been laid off.

They conclude:

Sources tell MyGolfSpy that personnel reductions were discussed at a recent Board of Directors meeting, but nothing to this extent.

Other sources also tell MyGolfSpy that Hogan owes money to several media outlets and vendors, and has so for a while, which is always an indication of a struggling operation. Other sources report that Perry Ellis, the owner of the Hogan brand who licensed the name to the Ben Hogan Company, has had concerns over the current status of the golf equipment company.

Besides the obvious job losses, this is a huge downer for those who loved the idea of a restored brand and the irons that had been brought back in grand fashion.

Update on Tuesday, January 3, 2017 at 10:59 AM by Geoff

**John Barba of MyGolfSpy shared this from Ben Hogan Co. CEO Scott White...

Just in from @BenHoganGolf CEO Scott White: Hogan is NOT shutting down-instead "voluntarily implementing reorganization"

— John Barba (@golfspybarbajo) January 3, 2017

Update on Tuesday, January 3, 2017 at 11:58 AM by Geoff

**A statement from the company...

Today

More Splashy Signings: Bubba To Volvik Ball, Lydia To PXG For $10 Million Over Five Years

The high profile switches continue, and while we know Bubba Watson has moved the equipment needle before, can he make golf ball buyers go pink?

Golf.com's Michael Chawra says that's the color Bubba hopes to play even though the model he's selected is not sold in pink.

Bubba says it was his idea to play the Volvik ball after watching the World Long Drive. Jeff Babineau reports from Maui for Golfweek.com on Bubba's claim and notes this about world top ten golf ball usage:

With Watson playing a Volvik ball, five companies now are represented among the top 10 players in the world. With Rory McIlroy expected to return to Titleist (Pro V1x) when he competes in South Africa this month, Titleist will have four of the top 10 (two playing Pro V1, two playing Pro V1x). Also represented are TaylorMade (two), Callaway (two), Srixon (one) and now Volvik.

Continuing its high profile splash into the equipment business, my sources say PXG's Bob Parsons has signed Lydia Ko for a whopping $10 million over five years, while also adding Brittany Lang, Christina Kim and Ryan O’Toole as new members of the staff.

Beth Ann Baldry, reporting for Golfweek.com says Parsons is going after LPGA players in search of international sales:

“In 2016 we saw remarkable growth in international sales,” PXG founder Bob Parsons said in a news release, “but we recognize that we have only scratched the surface. Tour validation is important, and the ladies tour is wildly popular in many countries.”

Here is Lydia discussing her switch on Morning Drive, which will also include a PXG putter:

Ko also did a nice demo on Aimpoint Express, using Golf Channel's new virtual putting green.

The full PXG press release:

PXG Adds #1 Ranked Golfer Lydia Ko to Its Roster of Champions
2017 Tour Lineup Supports PXG’s International Growth Strategy
 
Scottsdale, AZ (January 3, 2017) – Today, PXG (Parsons Xtreme Golf) revealed a tour strategy designed to help accelerate and capitalize on global excitement surrounding the company’s brand and revolutionary equipment. In a bold move, PXG has focused solely on signing LPGA Tour talent for the 2017 season. At the top of the list is world number one, Lydia Ko.

“This year PXG is looking at golf and the tour from a global perspective,” said PXG founder and American entrepreneur Bob Parsons. “In 2016 we saw remarkable growth in international sales, but we recognize that we have only scratched the surface. Tour validation is important, and the ladies tour is wildly popular in many countries. We had five exceptional ladies on staff in 2016 and this year that number has grown to nine. These players, as well as our top-notch PGA TOUR pros, will help us bring PXG’s unmatched technology to passionate golfers around the globe.”

New #PXGTroops include:
    •    Lydia Ko, 14 time LPGA Tour Winner
    •    Brittany Lang, Reigning U.S. Women’s Open Champion
    •    Christina Kim, 3 time LPGA Tour Winner
    •    Ryan O’Toole, 2011 Solheim Cup Team Member

“It was always my dream goal to become world number one,” Lydia Ko shared. “Now that I have reached that benchmark in my career, I am focused on consistently playing the best golf I can. When I first hit PXG’s clubs I was extremely impressed by how they felt. They felt solid and the performance was – wow!”

Known for developing leading technology that delivers indisputable performance. The company invests heavily in research and development, and does not prescribe to traditional product cycles.

“I’ve had PXG clubs in my bag for several months and all I can say is they are the real deal,” said Christina Kim. “The wedges have got to be the best I’ve ever played and the rest of the clubs are simply excellent. I couldn’t be more excited about being part of a company that is disrupting norms and taking risks in the name of innovation and performance.”

PXG’s professionals represent some of the very best talent on the PGA TOUR and LPGA Tour. The new players will join current #PXGTroops James Hahn, Billy Horschel, Charles Howell III, Zach Johnson, Chris Kirk, Ryan Moore, Charl Schwartzel, Cristie Kerr, Alison Lee, Sadena Parks, Gerina Piller and Beatriz Recari.

“I have so much respect for PXG and Bob Parsons,” Brittany Lang said. “Being on staff is really a special opportunity.”

“From founder to fitter, every representative of PXG is passionate about golf and dedicated to making sure golfers are able to experience incredible results on the course. I have never been so impressed by a company,” Ryann O’Toole added. 

January 1: First Big Player Switches Become Apparent

This year should be a little more chaotic in the player-endorsement turnover game, especially with players seemingly more comfortable playing mixed bags (perhaps not by choice either).

Throw in Nike's equipment exit, PXG entering the equation and Callaway adding its biggest name since Phil Mickelson, it should be fun to hear the stock quotes, spin and speculation.

Jason Day took to Instragram to confirm the expected (and lucrative) move to Nike apparel with a thank you to all of his sponsors:

Don't make a New Years resolution. #Justdoit @nike @swingoilofficial @lexususa @rolex @taylormadegolf @netjets

A photo posted by Jason Day (@jasondayofficial) on Dec 31, 2016 at 9:00pm PST

Nike was more transparent, with their first image accompanied by his "narrative." Melodramatic...

The Ace Born without a silver spoon Only a heart of gold on the gold coast. Six holes a day from the day he turned 6. Measured himself against the man. Turned two a days into three a days. Turned handwork into hardware, and tragedy into triumphs. He's lost more than tournaments. And gained more than confidence. Collapsed and kept going. Never rattled. Always ready. As cool as a November morning on the course. Started from the bottom. Standing at the top. No plans on leaving. Eyes on greatness. Eyes on the goat. He knows his game is impossible to perfect. But that's what makes it perfect. Welcome to the Club, Jason. #NikeGolfClub Nike.com/golf

A photo posted by Nike Golf (@nikegolf) on Jan 1, 2017 at 9:00am PST

Jonathan Wall at PGATour.com with a few more details on a dream-come-true moment for Day.

Rory McIlroy's move to a Callaway-Odyssey-Titleist setup was most eye-opening in the irons and putter department. First reported by No Laying Up, McIlroy had been rumored for weeks to be leaning toward Callaway's forthcoming Epic driver, but adding their irons and replacing the Scotty Cameron he put back in the bag with an Odyssey putter appears to be a big change. Meanwhile Titleist, battling off Costco's foray into their territory, brings McIlroy back into the ball family.