With one of the most recognizable brands in all of sports, this membership organization of professional golfers is seeing increased sales of licensed products around the world. When it comes to golf, no one brand has more recognition than the PGA Tour. During the last decade, the organization has worked to take advantage of its global brand awareness through an active licensing program that markets everything from apparel and accessories to video games and travel experiences.
“We were ranked as the 52nd largest retail licensor in 2009 with overall retail sales of our various marks at more than $660 million,” said Tim Hawes, SVP of retail licensing. “That says a lot about the global acceptance of our brand.”
Formed in 1968, the PGA Tour has had an active licensing program in place since the mid-1980s that ramped up the international focus of its licensing program in the last seven to 10 years. The sport has grown by leaps and bounds in terms of viewership and demographics, as 700 million households worldwide have the ability to view PGA Tour events. In addition, golf has broken through the stereotype of being a rich, old, white sport.
“One interesting component of the golf demographic is that it is more diverse than people often realize in terms of age and ethnic breakdowns. Golf, and especially the PGA Tour mark, penetrates various segments extremely well,” said Hawes. “Over the last 10 years, a democratization of the sport has resulted in increases in our female, youth, Hispanic, and African-American fan base.”
The PGA Tour takes a broad approach to licensed products and services because the sport’s outdoor, lifestyle nature gives it a universal appeal. Think about it: how many sports can a 12-year-old and a 75-year-old play together and have a good time? In the US, 100 million people consider themselves golf fans, and 30 million actively play. That creates decisions at a buying level beyond just buying clubs and balls to apparel, accessories, and services that are much broader than any sport golf competes with.
The foundation of the PGA Tour’s licensing program is traditional apparel and accessories. Around the world, it has approximately 100 licensees making everything from outerwear and headwear to divot tools, with 25 to 30 licensees focused on apparel. It also has a relationship with EA Sports, which makes the PGA Tour’s Tiger Woods golf game easily the most successful golf video game on the market.
The organization is exploring entering the youth club market, but it has traditionally avoided licensing equipment like balls, shoes, and clubs. Hawes said it would be inappropriate for the tour to begin licensing those products.
“We are a membership organization, and our members use all forms of equipment. Our brand acts as a seal of approval, and to associate with any one equipment brand wouldn’t be proper,” he said.
Other new channels it is exploring vary. For example, The Tour Club is a private national club combining golf and international travel that people can join and get access to premium vacation destinations and residential facilities for golf-centric vacations and tournament-related products like event tickets, VIP tours, and clinics. PGA Tour Experiences is another source for golf vacations, corporate events, and access to PGA Tour Academy instructional centers.
Beyond the nucleus of the PGA Tour mark, the organization has a portfolio of about 35 brands with a lot of value and recognition. Its tournament brands include the PGA Tour, Champions Tour, and Nationwide Tour. It manages ancillary brands like the FedEx Cup and the Tour Championship presented by Coca-Cola. When the PGA Tour forms licensing partnerships with licensees, the organization works with its partners to foster a synergy between where the licensing partner believes products will attract the target audience and where the PGA Tour wants them to be sold.
“We have targeted relationships with licensees in certain distribution channels. Perry Ellis International makes private label PGA Tour clothing that is sold in 4,000 mid- and upper mid-tier department stores. Other partners are in the green grass channel, or golf clubhouses, only. Others sell only to tournaments,” said Hawes. “For us, a key element to value is understanding the expectations and strengths of the licensees in terms of their distribution channel and making a program that maximizes the opportunities in the channel.”
Top of the leaderboard
As the licensor, the PGA Tour creates value in each of its marks that the licensees license and take to the marketplace. The tour creates value and recognition in the brand by delivering valuable content to consumers through TV programming on the Golf Channel and its two network partners with thousands of hours per year in TV programming. The tour has a substantial promotional program through print media partnerships with USA Today, Golf Digest, and Forbes, and it has a partnership with XM Radio that boasts more than 1 million listeners per week.
“That all adds up to our brand being delivered to a lot of consumers on a global basis, which then makes people want to associate with the products and the brand,” Hawes said.
The organization also takes advantage of its clear leadership online. The tour’s website is easily the most consumed and viewed golf website on the Internet, and last year the organization partnered with Global Value Commerce to launch a redesigned official online store that included expanded functionality, a broad selection of merchandise, and competitive pricing.
Despite the ongoing challenges in the retail space, the PGA Tour is focused on introducing its brand to new arenas of consumers. Hawes said the tour has around 20 projects in various development stages where its family of marks can create an acceptance with new consumers by virtue of it sports, golf, and lifestyle affiliation.
“There will always be turnover in a market and economy like this, but we can offset that turnover with the development of new products and services we bring to market to keep ahead of the growth curve. Our business has kept growing, and our team is focused on business development to be sure we stay ahead of that curve,” he said. “As consumers have more access to our brand through TV and the web, there is more demand at the retail level. We are confident the next few years will be a big period of growth for us at retail.”