6 Golf Inc. July/August 2017
in 1999. King’s aggressive marketing
approach helped it become the top driver
manufacturer in 2005, and sales continued
to increase until King le; TaylorMade in
2014. He was promoted to president of
adidas Group North America.
KPS Capital Partners is a private equity
;rm that specializes in manufacturing
companies. It has been recognized for
several deals by industry trade publications, including its 2014 acquisition of
Anchor Glass Container. ;e glass manufacturer was acquired for $435 million,
and KPS turned its ;nances around by
cutting expenses and refocusing its market. It sold the business in less than three
TaylorMade can expect a similar
approach. Most experts predict KPS will
focus TaylorMade on its core business.
;e company, which bought Ashworth
for $72.8 million in 2008 and Adams Golf
in 2012 for $70 million, has seen both
brands languish, and some expect the
brands to be sold.
KPS appears to have acquired
TaylorMade at the right time. Nike exited
the golf equipment business a year ago,
a;er dropping below $700 million in revenue. ;at helped TaylorMade land Rory
McIlroy as its latest spokesperson, which
it announced just 24 hours before the
sale. ;e company also had signed Tiger
Woods to an endorsement deal, though
that was prior to his recent legal troubles.
“When you look at where things were
with this deal 18 months ago, I think all
of those indications would say that the
private equity ;rm got a pretty fair deal,”
Brad Morehead, who teaches ;nance at
Northwestern University’s Kellogg School
of Management, told Golf World.
Adidas said the sale should conclude
later this year. It will “record a nonoperational negative P&L impact in the high-double-digit to low-triple-digit million
euro range, which will be reported in discontinued operations as part of the company’s 2017 results,” a statement from the
Private clubs boost local
economies, study finds
A recent economic study estimates that
private clubs in the United States have a
total direct economic impact of $21 billion.
;e Economic Impact Report 2016,
conducted by the Club Managers
Association of America (CMAA) and
Club Benchmarking, details the e;ect
that the 2,539 clubs managed by CMAA
members have on the economies in
their communities. (It does not account
for additional indirect ;nancial e;ects
related to employment and spending at
;e study found the economic impact
of the club industry to be highly local,
in part because most club members and
employees live near their clubs. ;at
means the majority of cash ;ow resulting from purchases of equipment and
supplies, employment, taxes, charitable
giving and other economic activities are
centered in the community in which the
club is located.
“;ese clubs will subsequently produce
a positive impact on members, employees and communities,” the study said.
;e report determined that median
operating revenue at the clubs (from
membership dues, food and beverage
sales, greens and racket fees and other
services) has increased by 6.9 percent
since a similar study in 2014.
At the same time, median capital
income (from building or improving
facilities and adding or updating equipment) has increased by 29 percent.
O;cials said capital income, which constitutes about 11 percent of a club’s total
income, has been growing at a more rapid
rate because of increases in initiation fees
and capital dues and assessments.
According to the report, membership numbers have stabilized at the great
majority of clubs. In addition, revenues
and activities are growing at more than
75 percent of the clubs surveyed.
“Clubs are engines of intense, local
economic activity,” the report concluded.
“O;ering sustainable, long-term, middle-class employment in a family atmosphere,
clubs are a critical ;ber of communities.”
salaries on the rise
Average age 46
in the profession 16.2
Average years in
current position 10. 4
Source: Golf Course Superintendents Association of
America’s 2017 Biennial Compensation and Bene;ts
TaylorMade continued from page 4