Phil Mickelson's hopes that LIV Golf backer, the Saudi Arabia Public Investment Fund (PIF), will buy Topgolf Callaway might have been boosted after the company launched a strategic review in the wake of "disappointing" performance.
LIV Golf founding member Mickelson responded to rumors earlier this year that PIF was interested in buying the company, which owns the popular Topgolf driving range chain as well as being one of the largest golf manufacturers around the globe. Mickelson, who was sponsored by Callaway for much of his career, said he was "praying" a deal could be done.
Topgolf Callaway denied suggestions that it was in discussions with PIF in March, which emanated from a report by South Korean newspaper Chosun Daily . But on Wednesday the business announced it was reviewing its operations.
READ MORE: Jon Rahm handed Ryder Cup boost after Rory McIlroy's defiant statement
READ MORE: Nelly Korda pokes fun at her own family over little-known Olympics streak
“We believe [Topgolf] will deliver substantial growth and financial returns over time,” Topgolf Callaway Brands president and CEO Chip Brewer told Front Office Sports. “At the same time, we have been disappointed in our stock performance for some time, as well as the more recent same-venue sales performance.”
Callaway owned an 18 per cent stake in Topgolf before the companies merged in 2018 to form Topgolf Callaway Brands. But after posting its second-quarter figures, the business is exploring how to “return Topgolf to profitable same-venue sales growth" after a decline in revenue of eight per cent at its established venues.
Three new Topgolf sites have opened across America this year, keeping revenue strong at $494.4 million for Q2, and four more driving ranges are under construction. Callaway's club manufacturing revenue in the same period was down 8.2 per cent to $413.8m, although this decline has been blamed on the timing of product launches. Callaway's latest range of clubs – the Paradym AI Smoke collection – launched in Q1 and sales naturally decline as the year goes on.
Follow the Mirror US on Google News to stay up to date with all the latest news, sport and entertainment stories.
Topgolf Callaway also banked $249.6m revenue in Q2 from its other brands, which include Jack Wolfskin and Ogio. But although the numbers appear strong on paper, there is clearly cause for concern with the launch of the strategic review. The company has not announced a timeframe for the review to be completed, but it says it will assess “inorganic alternatives” to stimulate growth, “including a potential spin of Topgolf", which would see the business split into different companies.
Topgolf sites boast a selection of food and drink outlets and have made golf more accessible to different demographics, becoming a social destination, particularly for young adults.
Although denied by Topgolf Callaway, a potential deal with PIF would be appealing to the Saudis as it would strengthen LIV Golf's foundations in the U.S. and open up a world of marketing opportunities. PIF launched the breakaway LIV league in 2022, poaching numerous top stars from the PGA Tour.
"While it is our long-standing practice not to respond to market rumors and speculation, in light of today's unusual market activity, coupled with a recent media report originating in Korea regarding discussions of a potential sale of the company or its golf equipment business, we confirm that we are not aware of any such discussions," a Topgolf Callaway spokesman said in the aftermath of March's report. "We do not intend to comment further on this topic, and we assume no obligation to make any further announcement or disclosure should circumstances change."
Mickelson, however, was fond of the idea. He posted at the time: "I haven’t heard anything about this but what a great idea and I pray this happens."
Local News
