On Wednesday, Nike made a head-turning announcement that they would back out of the golf equipment business.
“With this new focus, Nike Golf will transition out of equipment — including clubs, balls and bags,” the brand said in a hastily, three-paragraph announcement.
Nike’s exit will leave Rory McIlory and Tiger Woods searching for a new set of clubs – a huge opportunity for brands such as Titlist, Callaway, TaylorMade and Mizuno to bid on deals with the biggest names in golf.
McIlroy reportedly signed a 10-year, $200M deal with Nike in 2013 while Tiger re-up’d his massive deal in 2013.
“Sad for Nike Golf employees that worked so hard and made genuinely great golf equipment,” McIlroy responded on Twitter.
The move comes after the number of people playing golf in the US has sharply dropped since 2000, when Tiger was at his prime. In turn, the golf business at Nike only contributed to about 3 percent of the brand’s total revenue.
“When Nike really entered the golf space they put all of their eggs in the Tiger basket, which paid off well for a long time. He was the clear number one for a long time,” rEvolution’s golf expert Michael Flood said. rEvolution, the integrated sports marketing and media firm in Chicago, often works with clients in golf.
“There was a long time that there was no question if he was the best golfer of all time, but how big the margin would be; everyone assumed he’d beat Jack Nicklaus’ major victories, but I think all of us; aside from Tiger himself; can all agree that’s not going to happen now.”
Flood argues that after the Tiger incident, sponsors like Buick and AT&T walked… But Nike was too far in – investing their whole golf franchise on him.
“Nike tried to recover and move past the Tiger phenomenon,” Flood said.
So Nike lured the then 23-year-old McIlroy from Titleist in 2013 with that massive deal.
“It garnered a lot of attention and Rory did great for a couple years, but he was no Tiger in relation to dominance on the course and notoriety off of it,” Flood said. “Rory was never dominant enough to cover the clout that Tiger created. Tiger reinvented the game, Rory was the next in a long string of number ones that came and went. He still is but there is no clear-cut number one anymore. There are the elite top 6/8/10 guys, but nothing like we saw in the Tiger era.”
Flood also pointed out that, unlike Nike, the diversification of a brands golfer portfolio is essential and Under Armour should take notes.
“Under Armour is in an interesting situation with Spieth. I think they think he is a safe play; good kid, from a good family. But there is always the risk with putting all of your money on one pony, if they go down you go with them. Spieth has had some interesting moments in the press and shown some frustration with the media ever since his masters meltdown.”
With both Rory and Tiger essentially becoming free agents in the sector, McIlroy may revert back to Titleist – a brand which he found vast success to start his career. It has also been noted that even though Nike was Tiger’s partner, he often used Mizuno blades.