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Marketing and Sponsorship

Nike Leaving Golf Equipment Business; Tiger Woods Already Seeking New Clubmaker

Nike yesterday announced that it is "stepping out of the golf equipment business," which includes clubs, balls and bags, in an effort to "focus on footwear and apparel," according to Mike Stachura of GOLF DIGEST. Nike, which reported "flat to down annual sales in its overall golf business the last two years" at just north of $700M, has been in the golf business since '84, but only introduced its first clubs in '02. Its sales in '13 and '14 were nearly $800M. Nike, known for "non-traditional equipment designs over the years," has struggled to become a "leading player in the equipment business, with market shares in woods and irons that were routinely one-tenth those" of leaders Callaway and TaylorMade. Nike-sponsored golfer Tony Finau said, "I love the equipment I'm playing now, and it's a real process to get through to make a change like that. I don't know exactly what it's going to mean for contracts, but it's pretty likely that this time next year I won't be playing Nike clubs" (GOLFDIGEST.com, 8/3). The WALL STREET JOURNAL's Sara Germano notes golf is the "smallest sport category at Nike." The company makes the "bulk of its revenue sales of footwear and apparel but gained a following in golf in large part" due to Tiger Woods (WSJ.com, 8/3).

FINISHING STRONG: Nike Global Corporate Communications Dir Brian Strong said that the company has "no plans to sell its golf equipment business as part of the transition, and that where there are products being made, production will continue to completion." Strong said that will "take place over the next few months." ESPN.com's Darren Rovell noted the announcement comes three months after adidas said it would "enter into negotiations to sell off its golf division, including TaylorMade, Adams and Ashworth" (ESPN.com, 8/3).

WHERE TO FROM HERE? Woods' agent, Mark Steinberg said that they were "aware this announcement was coming, and that he will begin searching for a new clubmaker" for Woods. Steinberg declined to reveal which clubmaker he would approach first, but said, "He's been a longtime icon of Nike golf and that's not going to change one ounce. He'll remain a loyal and enthusiastic icon of Nike." GOLF.com's Jeff Ritter noted Nike's initial clubs were "classic forged blades, followed by forged titanium drivers and, eventually a full range of offerings." Though Nike's market share in clubs, balls and bags "grew slowly but steadily over the years, it never achieved a dominant position in the marketplace" (GOLF.com, 8/3). USA TODAY's Steve DiMeglio notes the "future is unclear" for Nike staff players. Longtime Nike player Charl Schwartzel has "already moved on," as he left for PXG in July (USA TODAY, 8/4).

TWITTER FAM: Several of Nike's golf endorsers took to Twitter after the announcement. Rory McIlroy: "Sad for @nikegolf employees that worked so hard and made genuinely great golf equipment. Your support will always be appreciated #TeamNike." Kevin Chappell: "Sad to hear about those @nikegolf who lost jobs today. #family" Tony Finau: "My thoughts are with my great friends at Nike who have lost jobs this day. That was my first thought when I heard the news. #nikefamily" Jhonattan Vegas: "As a Nike athlete I am really sad to hear about this. I love a lot of their products and hope they will be back." Meanwhile, Mizuno Golf's official feed tweeted, "@TigerWoods @McIlroyRory @BKoepka @Kevin_Chappell @JhonattanVegas @russhenleygolf @themichellewie --Team Mizuno now holding open tryouts. ... @GolfDigest @TigerWoods we can build you a set of those gems you used back in '97 of ours, it is your 20th anniversary next year and all."

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