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Original Issue

My Shot

When it comes to keeping score, the golf industry could learn a lot from golfers

The game of golf prides itself on the integrity of its accounting. In 1968 Roberto de Vicenzo was famously denied a shot at Masters glory because he attested to an incorrect scorecard. The business of golf, however, practices fuzzy math, creating a world of guesstimates and inaccurate and incomplete data. And like the golfer with an eraser on his pencil, the industry is only hurting itself.

In 2000, after 20 years of analyzing market data on consumer packaged goods, I entered the golf business because I saw the need in a $30 billion industry for an independent, unbiased information source. I've since found that many of golf's stakeholders have little interest in such data.

Here are a few examples. First, in 2000 the PGA Tour claimed it had 95 million U.S. fans, a number that TV networks lapped up while agreeing to pay a record $850 million combined for the broadcast rights to Tour events over four years. But 95 million people equates to one in every three Americans, a ratio that has proved to be as ridiculous as it sounds, especially since TV ratings have fallen over the last four years. Secondly, a 2004 National Golf Foundation preseason survey of golfers projected an 18% increase in rounds by avid players (those who play more than 25 rounds a year) yet total rounds in '04 ended up being flat, which means there's no way avids increased by much at all. Such oft-repeated, seldom-challenged and largely inaccurate predictions are one reason why the 24% increase in course building between 1992 and 2002 resulted in a lot of lightly used, financially troubled courses.

You would think that over time the industry would learn from such mistakes. In January, Golf 20/20, the annual industry conference that was first held five years ago, took place in St. Augustine, Fla. The conference's ongoing goal is to help the game grow from 26 million U.S. golfers playing 500 million rounds a year in 2000 to 55 million golfers playing one billion rounds by 2020. Since there are presently fewer golfers playing fewer rounds than there were five years ago did Golf 20/20 revise its goal this year? No. Instead it chose to continue blithely deluding itself about the prospects for the future.

Why? Perhaps it's because the industry's flimsy numbers help sell golf to prospective course and equipment company investors and also pump up the game's value as a media property. Only later do the investors realize that a game built on integrity is backed by a business that has little.

James Koppenhaver is president and founder of Pellucid Corp., an independent company that sells information to the golf industry and whose clients include Acushnet, American Golf, E-Z GO, PricewaterhouseCoopers Golf Group, GE Capital and CB Richard Ellis. These opinions do not necessarily represent those of Pellucid's clients.

GOLF PLUS will next appear in the March 28 SPORTS ILLUSTRATED.



The author says the golf industry uses fuzzy math.