Catch the flying Tiger: African American interest in golf is growing rapidly, but how do we profit from the windfall?
IT'S ONLY BEEN FIVE MONTHS SINCE TIGER Woods set the world on its ear by demolishing his competition at the Master's tournament at Augusta, Georgia. Woods won the event by 12 strokes and set a new course record at golf's premier event. He also set in motion a marketing behemoth that has transformed the 21-year-old into a celebrity and icon.
But that victory and his current status as golf's golden child have together created high expectations. The belief is Woods' youth, good looks and urban appeal will not only propel blacks toward golf in record numbers but also increase the overall allure of both the game and its products to youth across the board, literally transforming the face of the sport.
Woods is getting paid for his accomplishments. His professional winnings worldwide have topped a record $2 million in the year since he turned pro. Add that to another $80 million in endorsements and Woods is on a serious roll toward a hole in one. But can his professional success help expand avenues for black entrepreneurs within the industry, where the real green is made away from the course?
"Tiger has created a great deal of excitement and exposure for the game within the minority community. But that's not necessarily going to equate into profit dollars for minority entrepreneurs," says Herschel Caldwell, publisher of Minority Golf magazine, which chronicles the growing number of black golfers in the United States.
Tiger Woods aside, golf is a multibillion-dollar industry that is growing in popularity. While it's a game and business that has traditionally been closed to blacks, industry insiders agree there are growing opportunities for career advancement and entrepreneurial endeavors, whether it's in apparel, equipment or providing ancillary services for golf tournaments.
As blacks' interest in the game grows, the hope is that large golf corporations will be forced to expand their sales, public relations, marketing and, ultimately, upper management staff to reach out to a diversifying consumer base. For those looking for career paths, the biggest challenge may no longer be in simply getting into the industry, but in determining how to exploit the opportunities once on the inside.
For entrepreneurs, the key is having a hot product or service to offer in a field already dominated by players like Titleist and Nike. "You also have to have deep pockets and a genuine interest in the game," says Bill Dickey, founder and president of the National Minority Junior Golf Scholarship Association in Phoenix. Dickey has followed the growing black involvement in golf over several decades and believes more African Americans playing will translate into more blacks working within the industry. "But I think it will take time for that to happen," he says. "And to make it work, you have to find a way to build a better mousetrap."
According to a 1994 study by the National Golf Foundation (NGF), there are 676,000 African American golfers comprising 2.7% of the 24.7 million that play the game annually, almost double the number of blacks playing 10 years ago. In 1994, total spending by golfers topped $16.3 billion. That includes $2.2 billion on clubs; $2.2 billion on equipment including bags, balls and apparel; and $10 billion on membership and miscellaneous fees.
The NGF says golfers who play a minimum of one to seven rounds a year spend about $183 annually on equipment, green fees and apparel. A quick calculation using NGF data reveals black golfers are likely spending a minimum of $124 million on the sport annually. Yet try tabulating how many African Americans are actually making money at the business end of golf and you might not need to use more than both hands. So if blacks are indeed being drawn to the game in growing numbers, why aren't more African Americans positioned to capitalize on the swelling interest?
The impact of the growing number of blacks spending on the sport hasn't been lost at BLACK ENTERPRISE magazine, which now sponsors the B.E./Pepsi Golf & Tennis Challenge held at the Doral Golf & Tennis Resort in Miami. The degree of financial participation in the event is just one example of the money African Americans are now willing to spend on the sport. Tournament organizers estimate 1,200 participants from across the country for this year's tournament. It's estimated that at least $650,000 is spent in hotel room fees and another $450,000 on airline costs. In addition, BE spends $1.6 million organizing the five-day event.
"Golf is a very big business, but it's also highly fragmented," says Joe Beditz, president and CEO of the NGF. "It's a very tough business to jumpin- to and grow." Nevertheless an increasing number of entrepreneurs are making the attempt. And as the opportunities slowly expand, BE found several African Americans in different arenas within the golf industry looking to make their mark and secure a small piece of the multibillion-dollar golf industry for themselves.
A CLEAR VIEW FROM THE TOP
Tucked away in a rural enclave of East Canton, Ohio, the Clearview Golf Course is like most others. Its 18 holes, spread across 130 rolling green acres, are postcard perfect. On a given spring day, you're likely to find a good number of golfers, from rank amateurs to wannabe pros, young, old and mostly white--on the course attempting to perfect their swing. Not until William Powell, the architect and owner of the course, motors up on his golf cart do you realize the difference at Clearview starts at the top. Bill Powell is black.
"I had the God-given ability to take this piece of land and see something here other people didn't see; the same way someone else can create something from a lump of clay," says Powell, whose gruff demeanor has only been accentuated over his 80 years. "We are competitive here. We're not a black course. We are a golf course competing with other people."
As the first and only golf course completely designed and built by an African American, Clearview was born from a simple inspiration. Powell was tired of being denied access to "public" golf courses upon his return home from World War II. While overseas, his interest in golf had sparked into a passion, in part because access to golf courses wasn't denied him while he was stationed in England. Upon returning, Powell located several acres of farmland in East Canton on which to build his own nine-hole course.
Today, Clearview is a family-run operation. Powell's son Lawrence has been course superintendent since 1978. His daughter Renee, the second black woman to play on the Ladies Professional Golf Association Tour, is now the golf club's head pro. Although Powell declined to reveal the specific costs associated with running Clearview, the National Golf Course Owners Association projects the average operating costs to run a course (which includes, among other factors, maintenance, property tax, utilities and costs of food and beverages) at approximately $131,000 annually. And at an average of $3-$4 million in start-up costs for an 18-hole course, the entry into this market will remain exclusive.
It comes as no shock to Renee Powell that few have followed her father's lead over the last five decades. "It doesn't surprise me because I know this industry. But it troubles me," she says. "You look at Clearview and you think that someone started this 51 years ago and there should be more, but there aren't." Renee says the problem is that rarely will you see blacks who even work on a golf course, much less own one. "Only in the last few years have there even been black manufacturer reps or sales people that called on golf courses."
Hearing Powell speak, you might think other entrees into the industry might be less difficult. Warren Smith, III thought designing an African American-inspired golf apparel line would be a relatively easy endeavor when he created Gofu Wear in 1995. Indeed, the start-up costs were low. Smith's initial investment of $2,000 bought him a patent, logo and some designing samples. But the Cincinnati-based designer, who had prior retailing experience, says it's been a learning experience from Day One. The market is already dominated by major apparel designers like Reebok and Nike. And Gofu (Swahili for golf), which targets 25-55-year-old "fashion conscious" golfers, was hard-pressed to find retail space in an industry that likes to go with established brand names. This leaves niche players like Gofu a limited market in which to work.
Smith says the inspiration for the company came tWo years ago after picking up a copy of Minority Golf magazine. "My first thought was that we are fashion conscious people," he chuckles. "Brothers are going to have to look good when we play golf." So Smith secured a patent and began designing clothing ranging from knitted shirts and sweater-vests to straw hats. The items run in price from $39-$85. Yet breaking down doors has been difficult.
Lesson one involved dealing with suppliers and manufacturers who are often reluctant to work with small start-ups. "Volume is everything in retail. And most manufacturers are reluctant to work with you unless you're talking about creating a minimum of 1,200 items of clothing. When you're a start-up, that's a risk because there's a danger of getting stuck with unsold inventory," says Smith.
After locating shippers and manufacturers who were willing to work with him, Smith's Gofu Wear had a modestly successful 1996 with sales of $15,000. He is projecting sales of $50,000 this year as he creates a Web site to expand his consumer base and looks for partnership opportunities with organizations like the PGA of America.
The NGF's Beditz believes it is possible for small start-ups with limited overhead, like Gofu Wear, to make a small regional impact and turn a profit. "If you're a small company looking to exploit a regional niche, then you're probably doing pretty well," he says. It's the companies in the middle trying to bump heads against the Nikes and Titleists that are getting crunched because so much money needs to be spent on advertising and marketing." He advises those looking to get into the golf industry to create ancillary products for the game. "You don't break into the auto industry by building a car. You build a gasket. You create something that you can control a little better."
That's what Joe Louis Barrow did--sort of. He is president and COO of IZZO Systems Inc., a Lakewood, Colorado-based company that produces the IZZO Dual Strap. The white-owned company was founded in 1991 by T.J. Izzo and specializes in an ergonomically designed golf club carrying system. The dual strap allows golfers to carry a golf bag evenly over both shoulders, much like a backpack. Barrow says he became sold on the product after using it before joining the company.
"I'd been playing golf using a single strap and probably ended up taking five or six Tylenols because of the pain in my shoulder," says Barrow, son of boxer Joe Louis. "It didn't take me long to realize there was potential for this product because it made sense," he says.
By focusing on a unique peripheral device for the game, Barrow helped IZZO grow to revenues of approximately $3 million last year. After joining IZZO in 1992 as senior vice president of sales and marketing, he became president/COO in 1996. Barrow is now responsible for directing the company's operations, domestically and internationally. Today, the company estimates some 300 professional caddies on the PGA, LPGA, Senior PGA and Nike Tours use the IZZO strap. IZZO has 5,000 accounts and 28 sales reps.
Barrow says joining the firm was the right move for him because IZZO recognized early that minorities were playing the game in greater numbers. "And as that trend grows, it will require golf companies like IZZO and others to recruit in a broader sense than they historically did," he says.
Barriers tO entry aside, Craig Bowen has managed to break into this exclusive industry. When he was named a sales representative with Titleist in 1995, it marked the first time an African American was given such an appointment with a major golf equipment company in the U.S. Bowen, 31, joined the firm in 1991 as a telephone customer service representative, and quickly leapt into research and development. He soon became a sales rep responsible for managing all of the Titleist golf shop inventories in the metro Detroit area, generating $2.5 million in revenue for the company. He earned about $100,000 for his efforts.
Although he's been playing golf since age 12, Bowen doesn't believe you must be a golfer to break into the industry. "Golf needs accountants. It needs attorneys and it needs engineers. Internally, different companies are experiencing different and growing needs for personnel, human resources staff and management level positions," he says. "Just playing the game doesn't mean you understand the business. You have to truly understand the products."
BREAKING IN THE DOOR
The PGA of America is one of the golf industry's governing bodies. The organization sponsors a number of major events including the Ryder Cup, PGA of America Championship and the PGA of America Senior Championship. Each can draw from 50,000-100,000 spectators, making them attractive business partners for budding minority entrepreneurs. Ernie Ellison, director of the PGA's minority procurement program, works with small vendors seeking to partner with the PGA.
In dealing with small start-ups, Ellison says the first step is determining if an entrepreneurs has a quality product to sell and the ability to produce it in volume. The PGA would then sign a licensee agreement with the business owner for one year, allowing vendors to use the PGA of America logo. The agreement also gives the licensee the option of setting up floor space at the PGA's trade show, held twice a year in Orlando, Florida, and Las Vegas, to tell their merchandise. "That's a tremendous marketing opportunity bemuse you're in an arena with hundreds of PGA professionals and industry people. Last year, we had over 57 countries represented [at the shows]," Ellison says. Opportunities to advance in the industry are growing daily, he adds. "And it's not just because of Tiger Woods, but because the business world has endorsed golf as the game for business."
That point hasn't been lost at one historically black college. For the last 15 years at Florida A&M University in Tallahassee, M.B.A. candidates have been required to take a course in either golf or tennis. "We decided long ago that we must prepare students to take advantage of every opportunity related to the business industry," says business school Dean Sybil Mobley. "And these golf courses are the places where business is generally done."
Beditz warns those exploring golf as a business not to do so only because you have a passion for the game. "You can't fall in love with an industry or let your love of the game dull your business sense. You have to fall for a great business opportunity."
Is the risk worth the reward? In some cases, yes. Just ask Bill Powell, who now owns a 130-acre dream because 51 years ago someone told him "no" one time too many. "I feel a sense of reward that I've been able to accomplish something when someone else said `You can't,"' says Powell, as he takes in the expansive view from a steep hill on Clearview's back nine. "I've been able to achieve something against the odds when others would use every effort they could to stop me. That makes me feel good."
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|Title Annotation:||Business of Sports; Tiger Woods' success popularizes the game which is a business worth over $16.3 mil|
|Author:||Smith, Eric L.|
|Article Type:||Cover Story|
|Date:||Sep 1, 1997|
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