By Matthew Rudy
Illustrations By John Cuneo
July 2008
Hank Haney is most famous for his prominent role as Tiger Woods' teacher, but long before he started working with the world's No. 1 player -- and charging $500 for an hour lesson -- Haney was a shrewd golf businessman.
Starting with a ranch he bought from World War II hero Audie Murphy in 1991, Haney expanded that McKinney, Tex., range into seven practice facilities and three golf courses across the state.
Seventeen years later, despite a struggling economy, the most famous athlete in the world is a professional golfer (and a $100 million Nike Golf endorsee), PGA Tour purses are at all-time highs, the largest equipment manufacturers are reporting record sales, and industry groups are noting that the overall golf "economy" -- including equipment sales, golf tourism and golf course real-estate development -- has never been larger.
But many people affiliated with the golf industry aren't celebrating. A series of studies shows that rounds played are flat or declining. Television ratings for PGA Tour events are only level. Traditional hot spots for vacation golf activity like Myrtle Beach and northern Michigan have seen a raft of course closures -- either from a lack of play or because of the tough business credit climate. Even Haney's flagship golf ranch became a more enticing business proposition as a real-estate play than it was as a driving range, and he sold to developers.
So is the patient sick or healthy?
Many of the recent participation surveys undertaken by the National Golf Foundation, the National Sporting Goods Association and the industry consortium Golf 20/20 are less than comprehensive or cover only a period up to 2005. So, in spring 2008 Golf Digest and BusinessWeek commissioned Longitudes Group, an Omaha-based research and marketing company, to take the current temperature of the golf industry by exhaustively analyzing market supply trends and geo-demographic data.
The resulting picture of the industry -- a mix of Longitudes' research and the existing surveys and economic data -- is a complicated one. Interest in the game among sports fans and kids has never been greater. But a combination of a weak economy, a September 11-related travel hangover and fiercer competition for consumers' time and entertainment dollars has crunched margins at resorts, mid-range country clubs, small retail stores and daily-fee courses.
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