Wheels Are Turning in Major Golf Brand Ownership
WaggleRoom.com's Charles Boyer published a rather interesting article on his site this afternoon regarding possible changes on the horizon in the golf-brand ownership world. As Boyer suggests, golf equipment colossus Titleist and their ownership, Fortune Brands, may be dissenting; a move that would allow Titleist to be its own stand-alone company:
That's due to the ultimate owner of the company, Fortune Brands, being in the midst of a stock market battle that may well see the highly diversified conglomerate splitting itself up into smaller companies. Some of those companies will likely be sold to other large firms, and it is entirely possible that others will become stand-alone firms responsible for their own fates.
While nothing concrete has been announced, august financial publications such as the Wall Street Journal are reporting that Fortune Brands is working with activist shareholder William Ackman to split the company very soon, with a possible announcement of their plan due perhaps before the end of the month. Ackman and Fortune Brands have refused to comment thus far, but the rumors are strong and believable enough that Fortune's share price on the New York Stock Exchange has risen nearly 8% since they began.
From a pure business standpoint, this type of move would be huge for companies like Titleist who presumably would have additional freedom to market products and set prices however they deem fit without having to hand over a percentage to an umbrella owner. Considering the potential stock market addition of Titleist as its own entity could also further the company's earning potential. While no individual or start-up company is safe in a down economy, one could argue that Titleist is certainly in better shape than other golf brands and would presumably remain viable in the market.
What does this potentially mean for sponsorship, however? Boyer goes on to speculate potential mergers or acquisitions between heavy-hitters like Titleist and Callaway (although not very likely), which would essentially double the number of Tour players under a specific sponsorship either way you look at it.
A basic understanding of a free market economy would remind us that competition is certainly healthy in any genre, and golf branding is no exception. But could you imagine the probability of a brand 'Supergiant' that would consist of to previously-seperate major brands? Smaller companies or clubmakers wouldn't stand a chance in the parket in the wake of this powerhouse. Heck, even veteran companies like Adams Golf, Cobra, and others could potentially suffer monumental losses.
Before I go off on a "monopoly" tangent, all of this is certainly speculation or conjecture at this point. In fact, the separation of Titleist from Fortune hasn't even happened yet. But it could, and probably will before too long.
And when it does, there is no telling what other companies may come calling to Titleist with an offer "they can't refuse".