- Callaway Golf Company has announced a merger with Topgolf.
- Topgolf signed a promotional partnership agreement with BetMGM in February 2021.
- The merger will likely benefit MGM as they look to leverage the golf enthusiast demographic.
This story is only tangentially related to sports betting but it’s an interesting development on a macro level. It could potentially be particularly fortuitous for BetMGM–the interactive gaming and sports betting division of MGM Resorts (NYSE: MGM) as they look to expand their presence in the golf betting segment.
On March 8, 2021, Callaway Golf Company (NYSE: ELY) and Topgolf International announced a merger between the two companies. We talked a good deal about Topgolf when we reported on their deal with BetMGM awhile back. Callaway Golf should be known to anyone that is even peripherially familiar with the sport–they’re one of the powerhouses of the golf equipment industry. Here’s what Golfweek said about them in an article covering top golf equipment manufacturers:
Callaway came about in the 1980s and today is one of the leading golf brands in the United States and beyond. The company was founded by a wine maker, no less. Ely Callaway bought a company called Hickory Stick and changed the name over to Callaway Hickory Stick. The name became its current Callaway Golf Company in 1988. Its most successful product, Big Bertha metal woods, were launched in 1991 and spurred its growth over the next two decades. The company sponsors a number of the top professional golfers in the world, including Phil Mickelson, Ernie Els, Arnold Palmer and Annika Sorenstam. It also bought out such legendary golf companies as Ben Hogan and Top-Flite.
They have some competition in the rest of the world but they’re generally considered to be the top golf equipment company in the US with a product line including golf clubs, bags, balls, apparel, etc.
Here’s what Chip Brewer, President and Chief Executive Officer of Callaway, said about the merger:
“Callaway and Topgolf are just better together. Callaway’s leadership in the global golf equipment market and geographic diversity, combined with Topgolf’s revolutionary technology platform and access to golfers of all abilities, will allow both companies to accelerate growth and create competitive advantages. This transformational merger has already created and will continue to create meaningful shareholder value. We are very excited to begin this next chapter and I cannot wait to see what we can accomplish together.”
Erik Anderson, Executive Chairman of Topgolf, is excited to be partnering up with a company that has such significant resources and scope:
“I am tremendously proud of everything we’ve achieved at Topgolf since our founding in 2000. Our dedicated team of associates, groundbreaking Toptracer technology, and proprietary venues and media platforms have transformed the intersection of sports and entertainment. Together with Callaway, Topgolf has the opportunity to build upon its rapid growth story, bring the Topgolf experience to new communities and advance our mission of making golf a more inclusive and accessible game.”
The way it sounds Topgolf will keep doing what they’re doing–their HQ will remain in Dallas according to the press release announcing the deal. Obviously, it’s way to soon to speculate on what this might mean for BetMGM but given the PGA’s comfort level with sports betting and the autonomy that Topgolf looks to be getting in the deal the status quo is likely ‘worst case scenario’. The upside potential could be downright insane–BetMGM could go from every Topgolf location into every golf bag in North America.
At the time of publication, James Murphy has a long position in MGM and ELY.
