Callaway Wants to Give You $16,253

Written By: Tony Covey

In case you missed it, yesterday Callaway announced what they’re calling THE  BIG BIG BERTHA PAYDAY contest. The bold caps were their idea. It’s so huge that you can’t simply talk about it, it needs to be screamed:

THE BIG BIG BERTHA PAYDAY!

I’ll be honest, I’m less on-board with Callaway’s version of the equipment hype machine than others in my particular sphere of the media, and as a general rule I don’t believe that big OEM contests warrant 10% of the hype that the golf companies try and throw behind them, but in this particular case, I’m riding the fence…actually, I think I just crossed it.

Somebody could win 1.5 Million (that’s probably what we should have used the giant screaming font on). And yes…I know that I used a much smaller number in the headline, but I’ve got a rep (for being sometimes humorous, often cynical, and occasionally a total douchebag) that I need to live up to, so I led with the lowball number.

Shame on me.

Here’s how this thing works:

:: Demo a Big Bertha Driver at participating retailer (or don’t, more on that in a bit).

:: Go to the Sweepstakes Website, type in your code, your participating retailer, and some personal info…

and #BOOM you’re entered to win Phil Mickelson’s US Open Paycheck.

Not his actual paycheck. It looks like you get one of those giant checks from Callaway. The important thing is that the numbers are the same.

In case I haven’t been clear with this (and I admit, I probably haven’t), for one “Callaway Fan” the company will match Phil’s US Open Paycheck. You win what Phil wins.

A 2nd place winner receives a Phil Mickelson autographed Callaway Driver. According to the rules, it’s a non-specific driver of Callaway’s choosing, so let’s hope for the runner-up’s sake they don’t have any leftover Diablos they need to unload.

For those who already have demoed a Big Bertha and don’t care to do it again, or for those who don’t give a damn and just want a shot at a buttload of money, Callaway has provided a workaround:

But What If Phil Misses the Cut?

Given how Phil has played recently, there’s a chance that the Second Place prize could be worth more than the Grand/First Prize. Callaway has accounted for that. In the unfortunate event that Phil does miss the cut  (dude has made 21 of 23 US Open cuts so it probably won’t happen) Callaway will pay out what the last place paid finisher gets, which as it happens is $16,253.

Ta-da…headline.

If you look at the whole of Phil’s body of work over his 21 US Open made cuts, his average finish is 26. If he matches that, the winner is looking at something in the very general ballpark of $75,000.  That’s pretty sweet. Consider Phil’s 10 Top-10s, 8 Top-5s, and 6 runner up finishes, and Callaway’s winner could be in for a huge payday (1.5 Million if Phil wins).

Cynical as I may be, friends, that’s one hell of a golf contest.

No Better Time

For Callaway, the US Open, and by extension, this contest, couldn’t come at a better time. Despite strong Q1 results, reliable sources are telling us that Callaway sales are trending the wrong way right now, and there is some uneasiness within the company. The Apex iron has remained a strong performer, but after a strong initial launch sales of Bertha drivers have leveled a bit, and in some markets big box numbers across the board aren’t what they’d like them to be.

That last bit is almost certainly true for everyone given the long winter, and of course the doom and gloom surrounding the decline of the game in general, rounds, lost, etc. Golf, and by extension golf equipment is a tough business for everyone right now, but Callaway is still trying to claw its way out of the hole it dug for itself over the last decade, and that leaves them more vulnerable than others to further overall declines in the market.

As you may have noticed, TaylorMade has its foot on the accelerator again (the same is usually true of the old lady who drives through the convenience store window, so….). Their free fairway with JetSpeed driver promo carried them until they could queue up the Mini Driver and the rest of the new SLDR S. The SLDR irons, I believe, are going to be a mammoth success, and the likelihood is that all of it will help TaylorMade reclaim market share from Callaway.

A Tough Spot

All of it puts Callaway in a bit of a tough spot. Sure, they slashed prices (and aggressively so) on X2 Hot, but in general, the best way to fight new product is with new product. It’s a reasonable assumption that Callaway has something it could release tomorrow, but they’re barely 3 months deep with most of their product, and the 6 month old stuff (Apex) is the strength of the lineup right now. Basically, they’re not likely to pull a TaylorMade just yet, which means they had to come up with an outside of the box way to  jump start the buzz engine, and this certainly qualifies.

#BerthaPayday Translates Well

One of the things I’ve questioned about the new Callaway model is how well the online stuff (full-on Twitter assault, Callaway Media productions, etc.) will translate to the offline world. Sure, I get the sphere of influence, word of mouth thing, but I’m not convinced that you can hashtag your way to the top of the golf industry.

The chance to win 1.5 million…that translates. Check out the TV spot.

Dont’ Worry, They’re Covered

One of the things that initial concerned me is the prospect that Callaway might have to payout 1.5 million bucks at a time when nobody in the industry really wants to be giving away 1.5 million bucks. Good news for shareholders, right?

The last thing you’d want is a situation where it’s arguably in Callaway’s best financial interest for Phil to miss the cut (not that it’s the nature of the Callaway guys I know to want for such things anyway). Fortunately there is insurance for exactly this sort of thing.

I was able to confirm that Callaway has purchased insurance against a strong showing by Phil. Basically what that means is that the money is already spent (based on some quick digging, the policy likely cost Callaway something in the low six-figure range), and that Team Callaway and the rest of us can sit back, relax, and hope it goes well for Phil (and the guy whose name gets pulled out of the hat when this is over).

If Phil wins the US Open, it will be huge for Callaway (it would have been huge anyway, but we’re talking bring-back-the-screaming-font huge). You can bet stories will be written about the 1.5 million (I bet a quarter million gets plenty of coverage too) Callaway gave to one of its fans, and the impact will likely trickle through the rest of the golf season. Even if Phil doesn’t get TV time on Sunday, the value of the build up will likely exceed Callaway’s costs, and that alone is a win at a time when nobody in the golf industry is winning much of anything.

For what it’s worth, the last time Callaway ran a promotion tied to Phil Mickelson’s performance in a Major, the dude won The Masters, and Callaway reimbursed fans for 2000 drivers.