Sports giant Adidas has decided to get out of the golf equipment business by selling their company, becoming only the latest to leave the industry. Last August, rival sports giant Nike announced that it would stop making golf equipment. This was then followed by nationwide golf retailer Golfsmith filing for bankruptcy in September. However, none of this bad news for the golf equipment industry has affected the relationship between the PGA Tour and major sponsor FedEX.
Adidas sells their golf business
Yesterday, Adidas announced that they would be leaving the golf equipment industry.
They sold their golf brands Adams Golf, Ashworth and TaylorMade to KPS Capital Partners, a private equity firm, for $425 million. Ironically, enough, the day before it was announced that Rory McIlory has signed a long-term deal to use TaylorMade equipment.
Despite Adidas's most notable brand TaylorMade having star golfers like Jason Day, Dustin Johnson and Sergio Garcia on its side, it was not enough for them to overcome the struggling golf equipment market.
Back in 2012 Adidas's golf sales brought in a whopping $1.7 billion. Only four years later, it brought in just over $500 million. Adidas will continue to have golfers use their clothing and shoes going forward.
A new deal between the PGA Tour and FedEx
The PGA Tour and courier delivery services company FedEx have had a relationship since 1985. That year FedEx became the sponsor of the St Jude Classic golf tournament. Their relationship continued when it was announced that men's golf would have its first ever playoff system. FedEx sponsored the competition, known as the FedEx Cup, which has been ongoing since 2007.
FedEx and the PGA Tour clearly see a mutual benefit to their relationship, as they announced on Tuesday that they have agreed to a new contract. This new 10-year contract extends the FedEx Cup and the FedEx Cup Playoffs through 2027. This new sponsorship agreement is the same length as the original contract for the event that both sides signed back in 2007.
The FedEx Cup is a season-long points competition, which spans all 46 events on the PGA Tour during the season. In the end, the top 125 qualifying players made it into the playoff event. The first three playoff tournaments cut the field down to 30 players, who all play in the last event. In the end, the winner has the honor of being the FedEx Cup champion and receives a $10 million dollar bonus.
