Endorsments in Professional Golf

Since I am quite versed in the world of golf, I decided to write about how the economy has affected the golfing world. I have many friends that are on both the PGA Tour and Nationwide Tour who have recently gained their tour cards. About 4 years ago when the economy was much better off than it is today, a first year PGA tour player would make right around $750 thousand in endorsements before even teeing it up. That number is with no credentials other than having your card. My friends who just got their cards this year told me that the first year endorsements are at about 200 thousand now. From speaking with one of the manufacturers, Titleist, I gathered some information as to how badly they are being struck by the economy. I feel anyone with just the most simple knowledge of golf knows about Titleist, would understand that Titleist is about as close to a monopoly in golf as you can get. Out of 200 professional golfers with their PGA Tour card, 173 are currently playing the ball. I am personally convinced that the others are playing a Titleist as well, just with a different stamp on it. the supply and demand of endorsment contracts is very simple. The demand is always going to be inelastic because everyone who is on tour is going to want endorsement contracts. The supply however is going to be inelastic based upon the economy. If the companies are not doing well because the whole world does not have the discretionary income to spend extra money on golf, they are obviously not going to be making as much money. Therefore the supply curve is going to shift to the left and less endorsement contracts are being fulfilled. On, the other hand, if the economy is booming and the brands have the extra money to spend on endorsements (which are essentially advertising) then the supply curve would shift to the right resulting in more endorsement contracts. The economy has hit the world of golf very hard much like everything else. In 2007, the International Tournament was taken off the schedule to to lack of sponsorships. Nickent, a smaller golf company, has failed to pay some its endorsement contracts leading to bigger legal issues and essentially more money they will have to pay. Essentially what I am trying to say is that no matter what you are talking about, the economy is going to have an effect on it. I just think people need to stop worrying so much because regardless of what anyone thinks, the economy is going to come back and boom again. It always has and always will. That is why you are taught to have an emergency fund that you can draw off of in times like this.