Golf is About Economics

Golf is all about economics. Despite what any golfer thinks, if the golf industry is not making money, there will be no golf industry. Of course, the consumer (us) thinks they have a great deal of influence, yet I am not entirely sure this is true. Over the years I have read many articles about “rabbit hole” issues that are the symptoms of my opening statement, but if you peel away the layers like an onion, money is the at the core.

The issue of Jason Day’s comment that he plays golf to win and he will use whatever routine he needs to make that happen is at the forefront of the recent media hype on slow play. Considered one of the slowest players on the PGA Tour, Day can be extremely tiresome to watch. But yet, there we sit living vicariously through his long drives and smooth chips. Golf pundits have wailed on the PGA and European Tours for being ineffective to change this issue and still nothing really changes! Why, because the revenue gained from TV sponsors regardless of the pace of play outweighs the efforts needed to fix the slow play issue. It is all about economics.

economics-and-golf

Economics is at the core of the golf industry.

I was a bit disappointed in Day’s statement from the National Post regarding slow play: “For recreational golf, I understand. But for golfers who are trying to win, and that one shot that could take you out of a playoff, that’s important because we’re driven by results; we want to be the best.… But the Average Joe just doesn’t get it.” My response to Day’s comments is that we get it, most of us do not have the time to dedicate and execute golf to an élite level. In all fairness, if I was playing for millions of dollars, my pace of play would be different!

Economics does drive golf. Most rule changes (local or otherwise), equipment innovations, or increased advertisements are all economic decisions. The world’s top golfers are a commodity used by companies to draw golfers to their product. Players like Jason Day, Rory McIlroy, Dustin Johnson, Tiger Woods, and Phil Mickelson are the standard bearers for golf. They are the draw! Despite what the minions feel, the golf industry is swayed by what, how and when these elites play golf. They, and many others, are the driving forces that generate the revenue needed to keep the golf industry alive! I suggest that if Jason Day was the 100th player in the world and not the 1st, he would be ‘politely asked’ to speed up his game because it was hurting the bottom-line.

On a side note, I wonder how many golfers purchased Nike clothing because Jason Day just signed a huge endorsement deal? Just wondering.

This economic mentality trickles down to the local golf courses as well. For the proprietor, their daily activities are centered around making money. I cannot speak for most courses, but I have watched many local owner/operator/proprietors work long hours to make their course a success. The behind the scene activities go unnoticed and unappreciated by most golfers. The goal of the golf industry is to enable as many people to play at any give time with the best experience so it  makes money. And in my opinion, this is what most amateur golfers forget: golf is an industry that requires a strong economic model or else it fails.

Golf is all about economics. Yet, we should not fool ourselves thinking that anyone associated with golf is making oodles of cash. There are some at the top of the golfing heap making buckets of money, but their numbers are small compared to the masses of amateurs doling out their hard earn cash every week to play the local municipal track. The fact that some pundits believe that Jason Day’s slow play can be a cause for new people to stay away from golf is crazy talk. Golf does have some challenges and if you peel away the layers, you will always find economics at its core.

I am a grateful golfer! See you on the links!

6 thoughts on “Golf is About Economics

  1. Jim,

    I think you’re right. As with a lot of things, it all comes down to dollars and cents. If people (courses, manufacturers, etc) aren’t making money, they will cease to exist, and take the sport with it.

    Cheers
    Josh

    Liked by 1 person

  2. Jim, great post.

    To a certain extent, Jason Day does get it and we amateurs don’t because if we did, thousands less of us would be running out to buy TaylorMade Burner SuperFast drivers because we think it will allow us to hit drives like Day. It’s nuts, and is totally market and dollar fueled, probably more than any other sport. Think any amateur baseball players are running out to buy the same bat that David Ortiz swings so they can hit more home runs?

    So that’s the downside of golf, but on the upside, less the appearance fees on the European Tour, golf is as close to a pure results-driven meritocracy that you’ll find. On the PGA Tour, there are no guaranteed contracts, and if you don’t play well, you don’t get paid. Gotta love it.

    Thanks!

    Brian

    Liked by 1 person

    • Brian

      I agree that golf is the closest to being performance based, except for the top players. For example, Jason Day who has paid his dues and worked his way to the top of the golfing world will make more money off the course than on this year. Therefore, I would suggest that playing well (for the prize money) is not as important as it is to say Jamie Lovemark who is ranked number 100 in the world.

      I will agree that golf is a unique sport and as long as the current economic model maximizes profits, nothing is going to change….not even slow play.

      Cheers
      Jim

      Liked by 1 person

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