The Impact of Tiger Woods on Golf and Implications of his Fall from Relevance

The following exchange with a friend on Facebook last Friday got me thinking about golf in a post-Tiger world. 

Patrick – Tiger put me on to Golf! Can’t bear to see my hero struggle like this, yo sonny get the bird dog and my 12 bore shot gun, time to put his driver out of its misery! 

Jonathan – You popped a thought in my head. Will all the people who didn’t care about golf 15 years ago stop caring about golf when there is no more Tiger? 

Patrick – Although a lot younger back then, I didn’t care for the sport, but now do, I think viewership will decline and so will the money. More so that Americans aren’t doing well. Golf is looking for a savior and Tiger and Phil are both done! They need a draw! So to answer your question, I will play more than I watch although I am trying to get my kids to try the sport. 

Tiger’s impact on golf over the past fifteen years has been immense, which is still an understatement. He has brought millions of new fans to the game, which has brought many millions more in dollars to the sport. 

The legion of new the huge increase in interest in the game led to significant changes in media coverage of the sport. Prior to Tiger’s arrival on the PGA Tour, golf was rarely front page news outside of the four major tournaments each year. The Golf Channel was a small, fledging specialty network. Golf coverage on television was limited to 2-3 hours each Saturday and Sunday on CBS, ABC or NBC. 

Today, golf is front page news every time Tiger plays in a tournament. All four rounds of each tournament are televised, with the Golf Channel showing the first two rounds. Most weekends the Golf Channel adds an additional 90 minutes of coverage before the weekend network coverage. The Golf Channel also provides four round coverage of almost every European Tour event.

The expanded media coverage is best shown by the larger purses of the PGA Tour events. With increased popularity come increased sponsorship and television rights fees. The following chart shows the number 1 and number 125 money winner on tour in five year increments, starting in 1987, ten years before Tiger’s first full season on tour. I list the 125th spot as the top 125 in money retain their PGA Tour cards for the following year.

 Tiger’s success makes comparing the #1 money winners over time difficult.  A great year used to be three or four victories.  Tiger moved the bar by winning five times or more on nine different occasions. 

Looking at the 125th spot gives a better perspective on the increase in purses over time.  In the ten years before Tiger was on tour, the money increase roughly 160%.  In the first ten years with Tiger on tour, the money increased 340%.  Troy Merritt’s $787,000 won last year would have ranked 30th on the 1997 money list.    

The fact that the 125th spot on the money list hasn’t really changed in the past four years is telling.  It suggests that sponsorship money is no longer growing.   Looking ahead, a tour without Tiger as the marquee star is likely to see purse decreases.  With the current television contracts due to expire at the end of 2011, the PGA Tour will be forced to renew in the wake of Tiger’s second straight year without a victory on tour.   A very weak US economy will create uncertainty over title sponsorship and the number of events held in future years. 

To cope with the downward pressure, the PGA Tour may take a page from the European and LPGA Tours and expand its schedule to include events around the globe (the PGA Tour currently holds second rate tournaments in Puerto Rico and Mexico up against World Golf Championship limited field events).  Arguably the Tour should have made this move at the height of Tiger’s popularity.  There are no guarantees that an expansion program will provide a long term growth solution.  Its short term success will be in large part dependent on Tiger’s willingness to take his game around the world without the guaranteed appearance money he currently receives for non-PGA Tour sanctioned events.  

As big as Tiger’s impact has been on the PGA Tour, Tiger has had an even bigger impact on the game of golf itself.  Tiger’s popularity has resulted in millions of new duffers around the world.  Golf manufacturers have been able to invest heavily into research and development thanks to the increased popularity of the sport.  Thus, the significant improvements in golf club and ball technology and performance can be indirectly linked back to Tiger.* 

* Two sides of the coin here.  The golf ball goes straighter and further, which is great for the average golfer.  The increased distance has resulted in some courses becoming obsolete and many new courses being impossibly difficult.  The increased popularity of the game has greatly increased the cost to play a round of golf.   All thanks to Tiger.   

The golf manufacturer that was most impacted by Tiger’s arrival was Nike.  Before Tiger, Nike was exclusively in the business of selling golf clothes and shoes.  They signed Tiger in 1996 and soon invested into manufacturing golf balls (1999) and golf clubs (2002).  Over time, Tiger began using Nike equipment which resulted in exponential growth for Nike.  Nike’s best year was 2008 with sales of $725 million.  

 The improvement in golf technology and Tiger’s dominance changed the professional game of golf.  Premiums on accuracy and precision were replaced with the ability to simply overpower the golf course.  Tiger with a wedge from the rough could score better than those with a six iron from the fairway.  An attempt to ‘Tiger-proof’ golf courses was the result. 

Below are the leading and 125th ranked average in driving distance on the PGA Tour in 1996 and 2011.

The increase in driving distance over the past 15 years is shocking.  The John Daly of 1996 would barely crack the top 125 this year.   By way of comparison, the top driving distance in 1981 was 280 yards.   

The increase is one part technology and one part improved fitness levels of the average tour player.  Gone are the middle-aged, chain smoking pros with beer bellies.  In their place are chiseled fitness freaks.   Leading the fitness revolution was Tiger Woods.   

Tiger and Daly were in a class of their own in driving distance between 1997 and 2001.  By 2007, Tiger had slipped to 12th in driving distance.  He was down to 21st in 2009.   Tiger’s ability to overpower a course is now a common trait amongst the twenty-something new stars of the game that grew up idolizing Tiger.  The new stars also happen to hit it straighter than Tiger which is a primary reason that Tiger has not won for a while and will struggle to dominate as he did in his prime.   

Patrick’s Facebook comment over the weekend caused me to daydream about the golfing world in ten or fifteen years.   Would the new stars of today be enough to keep Tiger’s fans interested in the game?  Would golf revert back to being a regional sport with a passionate but much smaller fan base?   As I thought about these questions, an interesting name popped into my head: Wayne Gretzky. 

I thought about Gretzky’s impact on the National Hockey League after he was traded to the Los Angeles Kings back in 1988.  The popularity of the sport increased in the United States which changed the economics of the game.  Player salaries skyrocketed; in 1989, Gretzky and Mario Lemieux were the only two players who made more than $1 million per season.  In 2010, the average player salary was $2.4 million with a minimum salary of $500,000.   

Gretzky brought a focus on hockey in the United States that didn’t exist previously.  The NHL quickly added nine new teams to the league in non-traditional US markets and moved two Canadian franchises south of the border. 

Hockey today is a much better game because of Wayne Gretzky, with more quality players from the US than ever before.   On the flip side, the NHL has struggled to cope with life after Gretzky.  The popularity in the US has fallen dramatically, with the sport sliding back to second tier status behind the NFL, MLB and NBA (arguably NASCAR and golf have overtaken hockey in recent years).  The league is now littered with struggling franchises across the southern US.   

There is no doubt that the NHL is still a strong league with tremendous fan support throughout Canada, the northeastern states, Detroit, Chicago and parts of California.  The challenge for the league has been adapting back to this reality.  The move of the Atlanta team to Winnipeg this offseason was a good start.  A serious look at expanding in Europe is probably the next logical move after getting another couple of teams in Canada.   

I think the PGA Tour is going to face a similar challenge after Tiger has packed away his golf clubs.  The key will be for the Tour to correctly gauge its relative importance in a Tiger-less world.  Smaller television audiences and smaller corporate budgets will shrink the purses and the media coverage.  Over time there may be fewer people taking up the game in the United States.   The great news is that the game is filled with great new stars emerging from all corners of the world.   

The challenge for the PGA Tour will be in capturing that world market and not overreacting if the US market and purses were to shrink.  An unrealistic view of reality could result in a number of tournaments struggling to be financially viable.   The PGA Tour will go on without Tiger, but it will never be the same.

 

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