Topgolf attracts a new generation to the sport.
By Neil Schwartz and David Clucas
At this year’s PGA Merchandise Show in Orlando, FL, one of the most discussed topics was Topgolf.
Topgolf brings what some call “the old bowling experience” to golf by mixing the sport with a fun, sports-bar type environment. It’s one avenue the industry is exploring to attract younger players to the game, and help reinvigorate golf retail sales. As the model picks up steam, SGB take a look at the company’s history and potential growth drivers for the sporting goods industry.
Taking Boredom Out Of Golf
Although parent company Topgolf Entertainment Group is based in Dallas, TX, the business began in 2000 in the U.K., where Founders and Brothers Steve and Dave Jolliffe were bored of the old driving-range. They envisioned a new kind of golf experience that combined competition with entertainment by hitting micro-chipped golf balls at targets on an outfield. The idea was that players could see exactly where the ball landed and could accurately and easily keep score on who hit the ball farther or closest to the target. “Just picture a larger-than-life-sized outdoor dartboard – but for golf,” Topgolf officials said. “And for a little friendly rivalry, the high-tech balls instantly score each shot’s accuracy and distance.” Add in food, drinks, TVs and lounge seating and the business hit gold.
Growth Of The Business
The Jolliffe brothers worked with a licensee to develop the first three Topgolf locations in the U.K. In 2005, the U.S. licensee, with WestRiver Group as the lead investor, brought Topgolf to the U.S. WestRiver Group was founded and is managed by Erik Anderson, co-chairman and CEO of Topgolf Entertainment Group. As the company expanded, it added Callaway Golf Co. as an investor in 2006 and investor Thomas Dundon in 2011.
In early 2016 the business was restructured under the TopGolf Entertainment Group holding company with three divisions: Topgolf (focused on the business in the U.S. and U.K.), Topgolf Media (focused on enhancing experience through advanced digital media, strategic partnerships and sponsorships) and Topgolf International (focused on expanding the business to other nations). Additionally, TopGolf picked up its fourth leading investor, Providence Equity Partners, which took what officials called “a sizable minority investment” in the company.
In 2015, Topgolf had 24 locations in the U.S. and U.K., serving 8 million guests, and currently plans to open another nine locations in 2016, with another two already announced for 2017, including Orlando, FL; Jacksonville, FL; Salt Lake City, UT; Las Vegas, NV; Nashville, TN; Fort Worth, TX; Roseville, CA; Fishers, IN; Edison, NJ; West Chester, OH; and Hillsboro, OR.
Spurring A New Generation Of Golfers
While Topgolf can’t single-handedly revive golf as a sport, it is doing something the industry has chased for years — attracting youth.
“While we are a family-oriented business entertainment that brings golf together with eating and drinking, there is really something for everyone,” Susan Walmesley, VP Sales and Marketing, Topgolf, told SGB at the PGA Merchandise Show. “Millennials in particular are embracing the Topgolf concept in a big way.”
Based on Topgolf’s most current research conducted in 2015 by the National Golf Foundation, only half of first-time Topgolf participants have played golf in the past, in one form or another. Walmesley added that the company’s research shows a quarter of Topgolf participants go out and try golf at a traditional course after their Topgolf experience. “In some ways, we believe that Topgolf can be a catalyst of change and growth for the game of golf and help to bring in new players that would have never considered trying golf before,” she said.
Many of Topgolf locations offer lessons, and some could potentially get a full golf pro shop in the future. Seeing the big potential for growing the game of golf sparked Callaway Golf to make its investment, officials said. The golf brand currently acts as the exclusive provider of golf equipment at Topgolf locations.
Jumping On the Trend
In the past, traditional golfers and those running the game have been very hesitant to get behind the Topgolf concept as “good for the game of golf.” But Walmesley said, “the numbers speak for themselves. Topgolf is bringing new people to the game of golf and they are showing their willingness to give it a try beyond their experience at Topgolf.”
At the start of 2011, the Jolliffe brothers sold TopGolf International for more than $28 million to a group of private investors. Callaway Golf is among them, as is Tom Dundon, chief executive officer of auto-loan giant Santander Consumer USA Holdings. By 2017, Topgolf plans to have 50 U.S. locations. Australia, Dubai, France, Russia, South Africa, and Spain are also charted to get centers.
Photos and video courtesy Topgolf