Midweek Musings

Sisyphus here, reporting for duty.  So all you need is for me to get this here rock to the top of that little hill?  

RIP, Kirkland Signature - Man, was that a fun ride, or what?  MyGolfSpy has owned this story, so over to you, Tony:

The Costco Kirkland Signature Golf Ball; man what a story. By now you know the deal. It's a four-piece, urethane cover golf ball, with performance that can stand toe to toe with any tour ball on the market today. 

At least he left a good-looking corpse.

All that, and it's only $15 a dozen. 

Our source inside Costco has not responded to our calls; however, a source familiar with the situation has told us that Costco has suspended production of the Kirkland Signature until further notice. Whether you want to call it a shortage or a total outage, the lack of Kirkland golf balls available to the consumer is being blamed on supply chain issues. 

We're told that, internally, Costco is saying that production will resume at a later date (and that an email will be sent to customers when stock is available), but we have good reason to believe that is an unlikely scenario.

Supply chain issues is the "dog ate my homework" of the equipment world...  OK, so how did this happen?

A representative of Nassau Golf (originally listed as the manufacturer of the Kirkland Signature Ball on the USGA conforming list) has told MyGolfSpy that Costco purchased overruns of Nassau's European-market-exclusive Quattro ball. There is some indication the sale was made through a third party, and that Nassau may not have been directly involved in the deal. The same source confirms that while the Costco balls have a different core color, the material composition and layer thickness are absolutely identical to the Quattro. 

With the initial supply of overruns exhausted, Costco effectively has nothing left to sell.

One secret of the golf ball industry is that a small number of factories produce the balls for for all of the "manufacturers".  We got a glimpse of this from Tiger's comments when he signed with Bridgestone, noting that they had actually produced his Nike golf balls.

Geoff is all over this, including this surprising detail on the source of the over-run:

Multiple sources I contacted felt that cores were from an overrun of Taylor Mades that needed to be disposed of when Adidas demanded that their subsidiary squeeze cash out of anything they could. The intent was not to disrupt the industry, but instead to cash in however they could on unused inventory. When GolfWRX noted the initial frenzy and MyGolfSpy's review hit, the ball became a disruptor. 

Covey does note that the Kirkland ball's manufacturing location is now back to its mission of making Taylor Made golf balls and that a similar situation to the 2016 "K-Sig" is unlikely anytime soon, if at all.

Shack notes the timing elsewhere, but I wonder if there might have been more to this than squeezing the last nickel out of inventory.  Could they have concluded the the threat of Costo stealing golf ball m sales was a unique black swan event at the time of Titleist's IPO?  Or am I imagining that second shooter on the grassy knoll?

Shack's post has a lengthy treatise on the takeaways form the incident, including these:

--MyGolfSpy's review was incredibly powerful, GolfWRX once again fueled interest in a product and the tide may have turned for golf equipment reviews. As other sluggish traditional publications sat on the sidelines, perhaps for fear of upsetting major manufacturers or simply because Costco is not a potential advertiser, independent internet reviews fueled the frenzy. (GolfWRX first posted about a "frenzy" on October 28th and while Mark Crossfield only posted a review three days ago, internet influencers established even greater power thanks to the Kirkland ball.) 

--A lot of people don't like Titleist. There was much behind-the-scenes joy at Titleist facing a scary competitive hit around the time of their IPO. Some of the hostility could be chalked up to their longtime spot atop golf ball sales. Some of the glee was over the incredible brand loyalty Titleist inspires. Some of it related to their hostile position toward distance rollback advocates. But most hostility centered around about the price of a dozen ProV's compared to others and was aired on forums. However...

--A lot of people don't know what goes into the cost of a golf ball. The anger ignored how much Titleist and other major manufacturers spend on R&D and manufacturing in the USA. That's right, unlike the Costco ball, we are talking about an American made product. I was amazed how many golfers were not aware that ProV's and Callaway Chrome Softs are made in Massachusetts by American workers. If you like to buy "Made in the USA" products, this episode was an eye-opener.

As for the first, he's spot-on, as to both the impact from websites and, perhaps of greater importance, the compromised nature of reviews from traditional golf publications.

On the second point, perhaps he should have clarified that he means from the other equipment companies.  The Titleist golf ball business is simply the most valuable franchise in the golf industry, and this is how market participants play.  It's actually a very good thing, though that's not to say that every tactic gets that seal of approval.

That last bit is good to see from Geoff, who's business acumen has occasionally seemed lacking to this observer.  Though he's help himself by adding marketing expenses, including player contracts and Jim Nantz.  While the S-1 did not break out the ball business, the entire business (including clubs and FootJoy shoes and apparel) shows strong gross margins of about 50%, but extraordinarily high selling expenses.  In a way it's comparable to the pharmaceutical industry, where folks will scream about the excessive margins when they haven't paid off the billion dollars it took in R&D and clinical trials....

Lastly, Shack reminds of this fun viral video of Titleist majordomo Wally Uhlein reacting to his new competitor:

Interestingly, Shack tells Wally that he's lucky that they haven't done a Downfall version...  are you familiar with those parodies?  Here's a recent example of The Fuhrer dealinh with loss:

Thank God they clearly label this as parody, otherwise we might assume that he was, in fact, a Star Wars fan...  Next up, Hitler is informed that Jordan Spieth made a quad at Augusta National's No. 12....

Euro-Doings - Significant changes on the Euro Ryder Cup front, accomplished as best I know without benefit of a task force....   and, more importantly, without hijacking the post-event press conference.

This is no doubt the most significant change, at least as far as the 2018 installment is concerned:

Membership criteria of the European Tour to be dropped from five tournaments to four tournaments (outside the Majors and WGCs) for the 2018 season.

Can't blame them as far as the Ryder Cup is concerned, looking to set the bar low enough to ensure all their best will maintain membership....  No reaction yet from Paul Casey, who might be the canary here.  

But the long-term issue is their sponsors, with the Ryder Cup serving as the only means to ensure continued support for the Euro Tour from their best players, who know where the money and prestige are.

Other changes:

Ryder Cup qualification points (both R2D Points and World Points) to be multiplied by

1.5 for tournaments later in the qualification process. The starting point for this will be the BMW PGA Championship in 2018. 

No Ryder Cup qualification points will be available from tournaments staged anywhere in the world opposite Rolex Series tournaments in both 2017 and 2018. 

Qualification for the 2018 team to change to four players from the Ryder Cup European Points List, four from the Ryder Cup World Points List and four Wild Card picks for Captain Bjørn.

In no particular order, let me add some reactions.

First, everyone seems to be on the bus on the concept of finding players "on form", the proof of which I've never seen.  My sense is that if forced to choose between the good and the hot player, take the former....  More interesting is the protection afforded the sponsor, Rolex, in denying points for conflicting events.  Let's see how the players schedule, complicated by the fact that their now competing for only four spots on the World Points List.

And get this:

Players cannot be a European Ryder Cup Captain or a Vice-Captain if they decline membership of the European Tour or fail to fulfil their minimum event obligation in any season, from 2018 onwards.

Shall we beat the rush and dub this The Casey rule?

I guess the only real surprise in this is the increase in captain's picks, as that wasn't an area in which Cap'n. Clarke distinguished himself.  The best of his picks, Thomas Pieters, was seemingly forced on him, and I'm guessing that many folks might have preferred Russell Knox to Lee Westwood.... Sorry Euro readers, still too soon?

Phil, Statesman - Fresh off saving the Ryder Cup, our hero takes on a far more daunting challenge:

Phil Mickelson wants to make one thing clear. Just because he has the title of ambassador for the CareerBuilder Challenge doesn’t mean the tournament is a Phil Mickelson tournament. 

“I view it differently than that,” said Mickelson, who was announced last spring as the ambassador for the desert’s PGA Tour event. “An ambassador is not a host. I’m just really trying to help out. But it is not my tournament. What I am is trying to get this tournament to the status it once had.”

Good luck with that son, because your predecessors all failed pretty miserably.  Especially since that double-hernia surgery (the hernia wasn't doubled, but there were two surgeries) has robbed the field of it's biggest name.

“To have a dignitary, icon or current player's name associated with your community tournament is an added benefit,” said Nick Raffaele, in his first year as tournament director of the CareerBuilder Challenge. “To have Phil Mickelson as our tournament ambassador at the CareerBuilder Challenge is a privilege beyond just the naming aspect. Phil's love for the game of golf, compassion for the fans and knowledge of a successful event from a players’ point of view is beyond description. It's a whole new game at this year's CareerBuilder Challenge on many levels."

As I noted at the time, losing the Clinton Foundation was a very smart move....  In fact, did you hear that The Clinton Global Initiative is being shut down?  That's what happens to an influence peddling scheme when there's no longer any influence to be peddled....

Here's the master three-year plan:

"The idea is to create an identity. Our identity is a chance for players to build a foundation for the rest of the year. We want to get a few top players in the field as the

year starts.” 

As the desert tournament evolved in the 1960s and 1970s, it always had top-name pros from Arnold Palmer to Jack Nicklaus to Gary Player to Johnny Miller to Mickelson himself. Getting at least a few names like that back in the field could help push the CareerBuilder to bigger heights, Mickelson said, and maybe even bring back a little of what the tournament was decades ago.

“If we get a few top players, get some top amateurs and in the future some top celebrities out to the tournament, the tournament will be something fans want to come to,” he said.

That celebrity comment is of most interest, as the tourney seemed to relish moving beyond its Hopeful roots in recent years.  I don't know Phil's pull with celebrities, though I'm guessing he can produce Billy Walters if that's any help...  

You'd think as the first tourney on the schedule on the U.S. mainland they'd be lined up at the door, but the best players aren't keen when they know that it takes -30 to win.  There's also those seven events they've tacked on in the prior year, so it's not so much the first, is it?

So, let's treat it as a Harvard Business School case study, and see what our genius comes up with....

Making Scotland Great Again - I hadn't heard that the wind turbines had been dealt with, though low oil prices might be the explanation there.  But jobs are being created:

President-elect Donald Trump is expanding his Scottish golf resort despite a recent

promise to halt “new foreign deals,” raising further concerns about the business mogul’s potential conflicts of interest during his presidency. 

According to the Scottish Sunday Herald, the Aberdeenshire Council has approved a multimillion-dollar expansion of Trump International Golf Links Scotland, including the construction of a second 18-hole golf course, just days after the president-elect sought to quell concerns that he could use his political power to further his business interests. 

At a press conference last week, Trump’s attorney Sheri Dillon of the law firm Morgan Lewis outlined a trust agreement through which Trump would hand over the management of his vast business empire to his two eldest sons, Donald Jr. and Eric, without divesting his interests, a move the director of the Office of Government Ethics called “meaningless.”

 Are you tired of the winning, yet?

Let me just add that this is from Golf Magazine, not MSNBC.  While the conflict of interest is a fair issue, does it deserve to lede the coverage in a golf magazine?  Someone in this crazy world is building a golf course, that's news enough these days....

I'm a bit surprised, though, that he's going forward with the second course.  After scaling back the associated hotel plans, it's inconceivable that the resort can be profitable.  There wasn't a lot of play the day I was there, and it doesn't seem possible there's enough play to carry the place.

Inevitably the second course will be less interesting than the first, because they used the best of the land, in this case extremely dramatic dunes.  The land where the second course is to be built is far flatter and further inland, but at least it's also further from the turbines.

Rory, Dishing - I like Rory quite a bit...  Oh, he's got that stubborness thing we expect to find in the young, but he does try to answer questions with candor, unlike a certain Nike stablemate.

But Golfweek has comments that I don't think remotely live up to this header:

Rory McIlroy dishes on fiancée Erica Stoll, takes swipe at Wozniacki

Here are those comments:

“The thing I love about it,” he says, “is that we were friends before anything romantic

happened. We met when she was working for the PGA of America, and renting a condo in Palm Beach, and I found it refreshing being with someone who was living a normal life rather than, ‘Oh! My jet is 30 minutes late!’”

That's dishing?  Then this:

“I thought at the time that being with someone that was in a similar position to you was the obvious answer. But it isn’t, because you can never get away from it. You can never detach yourself and try to come back to the real world. And that’s why I feel in such a good place now. I don’t feel Erica wants to change me in any way. I can be myself around her; there’s no bulls–t, no acting, no show.”

It's not a perfect performance from a PR standpoint, but he's making an honest point about how athletes live.  It was hard for two of them to ever see each other, who doesn't get that?

The only swipe at Sweet Caroline is that last bit, and the listener has to infer that it's actually a swipe...  If I were his PR person, I'd have lost the last sentence and thrown in some boilerplate about Caroline being a nice girl, but it's no worse than a B-...

There's more, but I'm afraid that our time together must come to an end.