For the 2nd time this year TaylorMade has a posted a fairly raw video specifically for TaylorMade’s staff ambassadors. Ambassadors are, for the most part, PGA Professionals representing the TaylorMade brand at green grass shops all across the country. It’s part of their jobs to sell you TaylorMade gear.
As was the case last time around, the semi-private video provides TaylorMade a vehicle to provide a pom-pom jiggling company update that avoids the scrutiny that should come with more public statements.
As was also the case last time, we fully expect TaylorMade will pull the video before many of you have the chance to watch it.
The general takeaway from the video is this: Everything is awesome.
What Wasn’t Said
It’s perhaps noteworthy that adidas was not mentioned once during the twelve-minute video. Certainly, the intent was to promote all things TaylorMade, but the mention of the parent company suggests that we’re moving closer to separation.
That brings me to what Abeles had to say about the sale:
It’s an intriguing statement, and likely one we’ll want to remember. Multiple sources have told MyGolfSpy that a deal is in the process of being finalized (it may very well be finalized by now). There hasn’t been a substantial amount of interested in the company, the sale price will likely be well below adidas’ original asking price, and the most likely buyer is from the Private Equity world.
By every account other than Mr. Abeles’, product technology, innovation, and the pyramid of influence won’t be among the new owner’s primary concerns. The speculation is that when the dust settles, TaylorMade will be a very different and much leaner company than it is today.
The Next Topgolf?
The other interesting bit of news is TaylorMade’s involvement in what reads like a Topgolf clone.
A couple of weeks ago we got a bizarre tip that “TaylorMade is going the Topgolf route”. At the time, we didn’t quite know what to make of it, but the video provides some clarity. In the video, it’s revealed that TaylorMade’s Dwight Segall has accepted a new position with a Fortress Investment Group (which manages Newcastle Investment Corp), where his role will involve overseeing the development of Drive Shack sites across the U.S. and internationally.
If you’re just hearing about Drive Shack for the first time, you’re not alone. It’s described as an experiential entertainment venue that provides a gamified golf experience.
Sound familiar?
It’s especially worth mentioning that Drive Shack is partnering with TaylorMade to build out these Drive Shack sites.
If and when Drive Shack becomes a reality, comparisons to Topgolf will be inevitable. TaylorMade’s chief rival, Callaway Golf, has a +/-15% stake in Topgolf, so it’s not surprising TaylorMade would seek out a similar alternative revenue stream – even if this one is perhaps a little too on the nose.
Keep this news in your back pockets as it could prove to be a major part of TaylorMade’s business once it’s under new ownership.
The Rest of the Video
For those who don’t want to sacrifice twelve and a half minutes of your life, or for those who come here (presumably) after the video has been removed, here are the other key bullet points from this quarter’s pep rally.
- TaylorMade staffers have had a great season on tour and in Rio. While TaylorMade can tell you that Dustin Johnson won the US Open, ridiculous rules prevent it from mentioning that Justin Rose won a freaking gold medal.
- M products have “taken over the world”. Retail sales numbers are strong, and driver counts on tour (a stat TaylorMade basically pays to guarantee) are at an all-time high.
- Market share is strong, healthy, and growing.
- M is the #1 selling iron product.
- The 2017 produce line will be the very best TaylorMade has ever brought to market (Abeles said before gulping tremendously).
- Q2 business for TaylorMade is up 23%, making TaylorMade the fastest growing equipment manufacturer in golf.
- Year to date results are equally as impressive. “We’re on a roll, we’ve got a lot of momentum.”
- No specific news on the sale.
- “Shares are off the charts.”
- M1 has been at retail for nearly 12 months and at full price. Price has also been maintained for M2.
- TaylorMade has “an incredible coffer full of great new innovations.”
- TaylorMade is “the most vested company in the green grass.”
Most of the above are, by the letter and numbers, true. While not exactly taking over the world, M is selling well, and TaylorMade has made small gains in total market share. Those shares, however, are not, by any reasonable definition, off the charts.
The 23%/fastest-growing stuff involves some clever math and an equally as clever interpretation of momentum. While Q2 was good, Q3 and Q4, in particular, are expected to be down significantly, largely due to upcoming releases from Titleist and Callaway.
Finally, we suspect that Titleist might have something to say about TaylorMade’s claim that it is the most vested company in the green grass channel. Titleist lives at green grass. Titleist owns green grass.
Quite frankly, for the company whose policies and practices nearly destroyed green grass before those same policies and practices nearly obliterated the big box market, to suddenly position itself as the champion of green grass, is patently absurd.
More To Come
Sources are telling us that a formal announcement on the sale of TaylorMade could come as early as this month. Stay tuned.
Eric
8 years ago
Not a fan of this kind of fake CEO. “Say hi to the camera, Guys!!! It’s so great to see everybody”. You can’t see anyone. You’re looking into a camera. Why even say that? And making your junior staffers to say hello to a camera? This is the same guy who forces his staff to go on touchy feelie management focus retreats where everyone does trust exercises and role playing. I’ll be glad when this company finally fizzles.