Seth Waugh, CEO of the PGA of America, admits that for a while golf had become a bit of a “sleepy” industry. But the last few years – and especially the last few weeks – have turned that around.
Among other factors, the pandemic contributed to increasing participation. New ways to play (think Topgolf and simulators) are also becoming more popular. And then there was the shocking sports news in early May that the PGA Tour plans to merge with rival LIV Golf, the Saudi-backed project that the tour had previously treated as its mortal enemy.
In April, Barron’s Andy Serwer sat with Waugh at the Sportico Bruin sports conference in Kiawah, South Carolina. They talked about the CEO’s Wall Street roots, how golf is embracing technology and, yes, Waugh’s take on LIV Golf. (After the PGA-LIV deal was announced, Barron’s reached out to see if Waugh would like to update his comments. He didn’t answer.)
The following is an edited version of their conversation.
Barron’s: So tell us about the difference between the PGA of America and the PGA Tour.
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Waugh: The PGA Tour runs the events you see every week, it’s the tour players who play every week. The PGA of America is the largest sports organization on earth, it has 28,000 members. All the professionals in the club who teach you the game, they are our members. We own a number of properties in the professional game. We have the Ryder Cup, which is the biggest spectacle in the game. We own the PGA Championship, which is one of the four majors. We have the Women’s PGA Championship, KPMG, as well as the KitchenAid Senior Championship, and then we run a variety of things throughout the year. We have our PGA WORKS Collegiate Championship, which is the HBCU National Championship. We have the Junior League, which is the fastest growing youth program in the world.
The way I think of it is that every other golf body has one swim lane. And we are the whole pool. We’ll start with the first shot you hit, and then the last shot you might hit. We also have the top of the game at its very highest level.
When it comes to developing the game, how do you measure success?
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It used to be that we measured golf by 18 holes played, and I don’t think that’s the right metric. If you and I went out and played HORSE in our backyard, we would have played basketball that day. It wouldn’t be five-on-five with referees, but it would be a form of basketball. There are so many ways to consume the game. Now we have par 3s popping up everywhere, you have putt-putt, you have off-course activities like Topgolf and Drive Shack, and there are simulators. There are actually more off-course golfers now, for the first time in history, than there are on the course.
We see participation growing. First-time users are at an all-time high. The juniors are at an all-time record, and within those categories, the two fastest-growing cohorts are actually women and girls and people of color. And so the game is really starting to look a lot different than it has in the past, and we couldn’t be more excited about what that means for the future of the game.
I read a while ago that the number of golf courses is decreasing. What’s going on there?
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Well, it has been a trend. Like many things, golf was overbuilt, and it was really a real estate game: you could create oceanfront property by building a golf course. So much of that stretched through the Great Recession, and through that period we saw a real decline in golf courses. It flattened out five or six years ago, and now the trend is definitely to grow somewhat more.
I hope we don’t overbuild again, but right now, because of the growth of the new golfers, we are concerned about access. You can create all these golfers, but where can they play? And so we’re very keen on the effort to help restore public golf wherever it is, whether it’s municipal golf or other forms. We’re trying to get our foundation to the point where we can make sure that if we develop the game, we actually have affordable ways for people to access it.
What is happening with LIV Golf vs the traditional league?
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You and I have lived in a world of disruption all our lives, right? I came from Wall Street, and that’s kind of our job: You disrupt or you go backwards. Golf is hot and exciting and has never been better from a participation standpoint and from a viewing standpoint, so it’s not a surprise that there is an attempt to disrupt. The things you need to disrupt though are a better product or a better price or both. And I don’t think so [LIV] is a better product and didn’t think so from the beginning. Again, we’re all for the game. So if this was a better idea, we’d be all for it. Honestly, we just don’t think it is.
What is the difference between working on Wall Street and running a golf organization?
Lately, not much! The crisis seems to follow me around, unfortunately first Covid and then this new existential threat. But I think leadership is leadership. The basic principles of leading and business acumen and taking care of your people and thinking through difficult problems and being very team-oriented – it’s very much the same. But you know, there is a lot of difference. I used to have shareholders like you worried about investors and here we have members. So it’s a completely different structure.
When I was asked to do this and debated in my own mind how to do it, I realized that I will never have a chance to impact more lives than I have now. When I called around to ask people for advice, I called Rob Manfred, the commissioner of MLB. He said: “Seth, there aren’t that many jobs in sports where you can really make a difference, and if you’re offered one, you should probably take it.” So it’s the most satisfying thing I’ve ever done because of the chance to have that impact.
Let me ask you about technology. What can it do to help drive the game forward?
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We invite disruption and the game is changing. One of our great partners, which is Callaway Golf (ticker: MODG), which recently bought Topgolf, now sees itself as a technology company. They still make the clubs, still make the balls, still sponsor a number of players, still obviously hugely important, but they also now have a business called Toptracer, which is technology that’s on golf courses so you can see where the ball is. walks.
When I came in, it was about trying to create a culture of innovation and some kind of forward thinking. We are trying to create a highway for our members to book everything online. Whether it’s merchandise sales to lessons to start times to communication. So technology is very much a part of the game. And the new generation expects it. So we welcome that. And it is definitely here to stay and will continue to evolve.
I’m not a golfer so I don’t know if it’s fair to ask, but what’s your handicap?
I’m about a nine handicap. Hanging on for dear life and single digits.
It’s damn good. Thanks Seth.