2001: Sobering thoughts on ‘duty’ to conform
Tuesday, November 29, 2011
The comment came from one of my golf buddies as we nursed rum floats on the clubhouse porch after a recent round. And he was fairly adamant.
“The companies that make golf equipment have a responsibility not to push technology so hard and so fast,” he said.
In addition to following whatever restrictions are set by the U.S. Golf Association and the Royal & Ancient Golf Club of St. Andrews, Scotland, the companies, he said, “should also regulate themselves to a certain degree. After all, they are part of golf, and if they keep adding distance to new clubs and balls, even if it is within the rules, they could really hurt the game.”
I took a sip from my drink, looked down the sun-drenched fairway of the 18th hole and decided my friend made good sense. Obviously, club and ball makers want golf to be a healthy and vibrant sport, so it stands to reason that they should not do anything to threaten the game. Therefore, they should not push things to the point where they are making drivers and balls that could drastically alter – and irreparably damage – golf.
Then the booze wore off.
“What, are you nuts?” asked Casey Alexander, a special situations analyst who covers the golf industry for Gilford Securities in New York. I had just called Alexander to explain my newfound position, and his reaction was emphatic. “Golf companies have no responsibility to the game. Their responsibility is to produce profits for their shareholders, and it is up to the regulatory bodies to determine what should, and should not, be allowed for play.
“It’s a jungle out there for equipment makers, a highly competitive jungle, and that is no environment to be putting self-imposed restrictions on new technology and product development.”
Another source of mine, a top executive with an equipment maker, agreed.
“With competition the way it is, none of us in the industry can stop what in some ways is a suicidal race: All of us driving as fast as we can, like two different cars coming from opposite directions, to a single-lane bridge,” he said. “Only one can get across, and you know you can’t make it if you slow down. So you don’t slow down, unless, of course, the regulatory bodies tell you to.
“The thing is, we will do as much as we can within the rules. But you have to be prepared to go beyond them if the playing field changes. If the market changes so dramatically that people don’t care whether they play conforming or nonconforming equipment, if our largest competitors come out with nonconforming balls or clubs, we have to be ready to do that, too. Or we would not be serving our shareholders.”
Wally Uihlein, the chief executive officer of the Acushnet Co., which makes Titleist, FootJoy and Cobra products, sees his company’s role in much the same way.
“The primary hat I wear is that of the head of this company,” he said. “And we are a company that is in the golf business, so it is sometimes difficult to separate ourselves from the industry.
“That said, my primary obligation is to our shareholders. In addition, I have to protect the future and livelihood of my 5,000 Acushnet associates, which adding in their significant others and dependents totals 20,000. It is not our duty to draw a line in the sand as far as the rules and regulations of golf are concerned. That’s for the governing bodies. But once those rules are established, it is our duty to stretch the conforming envelope as far as it can be stretched as we strive to come up with the best possible products. This is not a socialist enterprise here.”
Now, neither Uihlein nor any other industry executive I spoke with said they don’t give a hoot about the future of the game or the impact of advances in technology. It’s just that none of them believes golf is being threatened or ruined by technology.
Besides, they point out, there already is a natural governor in place for equipment makers, and that is the marketplace. If consumers decide they want nonconforming equipment, then companies will make – and sell – it. If golfers demand balls that fly farther or woods that make shots go straighter and longer, whether they are USGA legal or not, then equipment makers will produce them, the future of golf be damned.
But as long as we continue to have a golf populace that, for the most part, wants gear that performs and conforms, then equipment makers will take things only so far. They will be driven by what the market demands, which is ultimately what is best for their companies and their shareholders. And that does not necessarily run contrary to what’s best for golf.
So, my position has come full circle. And I didn’t even have to drink another rum float.