Phil Mickelson sponsorship ‘still on pause’ as Topgolf Callaway enters new phase


Topgolf Callaway Brands (MODG) CEO Chip Brewer is preparing his business for its next act as the golf world continues to undergo massive change.

Speaking with Yahoo Finance at the 29th annual Goldman Sachs retail conference on Wednesday, Brewer said the impact LIV Golf has had on professional golf is “a little early to measure,” but noted this year’s influx of money into the sport is likely a “net positive” for the business.

As for Callaway’s relationship with its biggest name, Brewer said the company is “still on pause with Phil Mickelson from a sponsorship perspective.”

Callaway paused its sponsorship with Mickelson back in February, when the golf legend’s comments about the Saudi government — whom he called “scary mother——ers” — and the PGA Tour were made public ahead of the Saudi-backed LIV Golf league’s start. Mickelson and Callaway agreed to a career-long sponsorship deal back in 2017.

“We will continue to evaluate that going forward,” Brewer added, telling Yahoo Finance he had coffee with Mickelson last week.

Phil Mickelson watches on the 18th hole during the first round of the Bedminster Invitational LIV Golf tournament in Bedminster, NJ., Friday, July 29, 2022. (AP Photo/Seth Wenig)

Phil Mickelson watches on the 18th hole during the first round of the Bedminster Invitational LIV Golf tournament in Bedminster, NJ., Friday, July 29, 2022. (AP Photo/Seth Wenig)

As for Topgolf Callaway’s overall business, in Brewer’s view the pandemic-induced golf boom continues.

“Our business is doing really well,” Brewer said. “Our consumer is very strong.”

Solid demand was certainly on display in the company’s second-quarter earnings report in early August.

Topgolf sales rose 24.1% in the second quarter from a year ago while golf equipment sales increased 12.6% and sales in the active lifestyle segment (mostly apparel) gained 39.2% from a year earlier. The company lifted its full-year sales and operating profit outlooks too.

And on Wednesday, the company began trading under its new corporate name, Topgolf Callaway Brands, and ticker symbol MODG. Brewer stated that the name change better reflects the opportunity to be a “modern golf” company and the company’s future financial potential.

A key component of that transformation will center around opening more Topgolf locations, Brewer explained.

EL SEGUNDO, CA - JUNE 15: Elijah Hughes enjoy an evening of entertainment at the Southlands new Topgolf on Wednesday, June 15, 2022 in El Segundo, CA. (Jason Armond / Los Angeles Times via Getty Images)

Elijah Hughes enjoy an evening of entertainment at the Southlands new Topgolf on Wednesday, June 15, 2022 in El Segundo, CA. (Jason Armond / Los Angeles Times via Getty Images)

“Topgolf is a high-quality asset with scarcity value that allows Callaway to widen its total addressable market in a brand-authentic, synergistic way,” Jefferies analyst Randy Konik wrote in a note to clients.

“Golf participation has been a bright spot amid COVID-related disruption, and we see core Callaway as particularly well poised to benefit from the rise in beginner participation. Current levels fail to appreciate the unrivaled access Callaway will have to the golf beginner funnel as the result of the merger, as well as the significant runway ahead for Topgolf.”

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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Read More: Phil Mickelson sponsorship ‘still on pause’ as Topgolf Callaway enters new phase

2022-09-08 05:44:25

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