Why private equity suddenly loves golf

“Golf is a game of misses. The guy who misses the best is going to win."

Ben Hogan

Thanksgiving for the return of The Skins Game, Gugler’s 10 tournament ban, Jeeno thinks she’s not very good, why are all the pros switching to mallet putters, AVERAGE Tour driving distance now 302+ yards, Steve Williams back on the bag, still searching for Black Friday golf deals.

Rory McIlroy's management firm generates $25m cash from operating activities in 2024

Why it matters: Rory McIlroy Management Services Ltd posted pre-tax profits of $8.2m in 2024 (down 11%) on revenues of $35.4m (down 2%). However, the Dublin-based firm generated $25.31m in operating cash, up 25% year-over-year. The pre-tax profit includes a $15.7m non-cash image rights depreciation. The company holds $147.14m in book value on McIlroy's image rights and increased cash reserves from $12.4m to $18.44m.

Our Take: McIlroy's corporate structure demonstrates efficient athlete business management. Whilst most superstars create complex offshore arrangements, McIlroy centralised everything in Dublin for simplicity and tax transparency. The 25% operating cash increase signals the brand remains commercially strong despite revenue decline. Generating $25m operating cash on $35m revenue demonstrates exceptional conversion efficiency. The $15.7m image rights write-down is accounting mechanics, not economic reality. The licensing fee structure creates tax-efficient income distribution, the company pays McIlroy $2.42m whilst Rory McIlroy Enterprises Inc pays $756k back in management fees. The $147m image rights valuation remains the critical asset, reflecting projected future earnings from Nike, TaylorMade, and Omega. McIlroy built a business that generates $25m annual cash whether he wins majors or not. Nice work if you can get it.

Alex Noren launches design studio with European Golf Design targeting practice facility market

Why it matters: PGA Tour and DP World Tour professional Alex Noren has launched Alex Noren Design Studio in partnership with European Golf Design, targeting the practice facility and short-course market. The studio focuses on short-game zones, modern driving ranges, par-3 courses, and 9/12-hole concepts designed to increase utilisation and generate revenue. European Golf Design handles architectural planning whilst Noren contributes tour level insights. The offering targets UK and Nordic clubs plus Southern European resorts seeking to attract British and Scandinavian golfers. Noren brings credibility as an active tour professional, Ryder Cup vice-captain, and Scandinavia's most recognised golfer. Initial discussions are underway across the Nordics, UK, Southern Europe, and the US. Services include site analysis, master planning, technical documentation, and construction support.

Our Take: Noren identified the gap between aspirational course design and practical facility economics. Most clubs need revenue generating infrastructure on underutilised land, not championship courses. Practice areas and par-3 loops deliver higher return per square metre than regulation holes. The tour player credibility matters commercially. Clubs hire Noren's name to attract members and validate investment. "Travelling the world on tour has shown me hundreds of ways a practice area can work, and just as many ways it can fall short," Noren told The Business of Golf. "Bringing those learnings with European Golf Design's expertise to create something modern and commercially smart is what motivates me here." European Golf Design provides architectural capability whilst Noren supplies marketing leverage. The Southern European resort angle is sharp: facilities marketing "designed by Alex Noren" gain appeal to high-value British and Nordic tourism segments.

PGA Tour guarantees $150K to keep developmental players loyal

Why it matters: The PGA Tour launched a $150,000 earnings assurance for players ranked below 126th who compete in 12 events, alongside $15,000 stipends for Korn Ferry Tour members. This creates a compensation floor for professionals battling to maintain Tour status, effectively guaranteeing minimum income regardless of performance. The programmes arrive as LIV, the Asian Tour, and DP World Tour compete for emerging talent before they reach the PGA Tour. For context, these guarantees launch the same season the Tour reduced fully exempt cards from 125 to 100, making membership simultaneously more valuable and harder to achieve.

Our Take: The Tour is paying to protect a pipeline it's actively narrowing. Guaranteed salaries signal genuine concern about losing developmental talent to LIV before they reach tour level. But here's the contradiction: you're making it harder to earn cards whilst spending more to keep players chasing them. This is defensive positioning, not player welfare. The Tour can't afford talent defection at the developmental stage when those players represent future stars and sponsor appeal. Whether $150,000 assurances keep ambitious players loyal when LIV offers immediate multimillion-dollar certainty without the qualification grind remains to be seen. The Tour thinks compensation floors matter more than pathway bottlenecks. Players grinding through Q-School might disagree.

Listen: The complete history and strategy of Coca-Cola A very deep dive from the guys at the Acquired Podcast. My career started with Coca-Cola so I’m biased but it’s a fascinating story.

Watch: Tiger and Kobe’s ‘psychotic’ attention to detail Two stories, years apart, with the same theme: the greatest see and feel what others can’t.

Follow: Dominyck Bullard interesting content related to sports investments with lots of golf industry insights.

Tech: Notion AI Started to build a productivity workspace this week and this one seems the most straightforward to implement.

Private equity's golf takeover: Three deals that tell the story

A few weeks ago, The Business of Golf examined Topgolf's operational challenges - declining same-venue sales (down 9%), capital intensity issues, and slowing customer returns. We questioned whether the business model was sustainable. This week, private equity provided its answer.

Leonard Green & Partners agreed to acquire 60% of Topgolf, valuing the entire business at $1.1 billion. Callaway will receive approximately $770 million in net proceeds whilst retaining a 40% stake. The valuation represents roughly half what Callaway paid when it completed the Topgolf merger in March 2021 for $2.6 billion. As we detailed previously, consecutive quarters of negative same-venue sales, a leadership turnover, and revenue forecasted to drop from $588 million to $415 million always made separation inevitable. Callaway will now focus on their equipment and apparel business whilst strengthening the balance sheet and reducing debt at the same time.

Leonard Green is not saving Topgolf. The firm is betting that operational improvements, value initiatives, and patient capital can restore margins whilst selectively expanding. Same-venue sales finally reached positive 1% in Q3 2025 after two years of declines, suggesting the turnaround has legs. Leonard Green's portfolio includes Zaxby's, Velvet Taco, and Troon, the world's largest third-party golf management company. They understand capital intensive consumer businesses with real estate components. The challenge now is making consistent execution, not radical reinvention, the winning formula.

But Topgolf is not the only story. Private equity deployed more than $5.5 billion into golf businesses over the past 18 months, systematically repositioning across equipment, entertainment venues, course operations, and the tour ecosystem itself. Three deals reveal different theses about what is broken and what is fixable in golf.

Three structures, three different bets

Bain Capital paid $1.3 billion in November 2025 to acquire Concert Golf Partners from Clearlake Capital. This was not remarkable because private equity bought a golf company. It was remarkable because private equity sold to private equity at a profit. Clearlake had owned Concert Golf for just three years, completing 14 acquisitions and expanding from 25 to 39 private clubs whilst roughly doubling revenue and EBITDA. Bain bought what Clearlake proved worked: a consolidation playbook in a fragmented market generating predictable membership revenue. That secondary buyout signals institutional belief that golf's market structure is mispriced and operational leverage can generate returns even at premium valuations.

L Catterton paid $200 million in July 2025 for a stake in L.A.B. Golf, the direct-to-consumer putter brand that reported 18,000% sales growth. Critically, this was not a buyout. Founder and CEO Sam Hahn remains heavily involved and deeply protective of the brand's culture. L Catterton, backed by LVMH, took a minority position providing growth capital whilst the founder retains control. This was funding for a company already working, not rescue financing.

The distinction between Topgolf's control buyout, Concert Golf's full acquisition, and L.A.B. Golf's growth capital matters because it reveals different assumptions about what needs fixing. Leonard Green took control to implement operational changes. Bain bought institutional management to scale a proven model. L Catterton funded growth without demanding control because the company does not need fixing.

Why now, and why golf specifically

Private equity's interest in golf is not occurring in isolation. Sports services deals reached $31.64 billion in 2024, nearly quadrupling 2023's total. PE firms now have stakes in 20 of 30 NBA teams and 18 of 30 MLB teams. The appeal is structural: 40% to 50% of revenue from contracted media rights, another 25% from sponsorships, and cash flows largely uncorrelated with economic cycles.

Golf offers these attributes plus real estate optionality. Team valuations outpace the S&P 500, but a golf course sits on 150 acres of appreciating land with potential development value. Course values increased by an average of 38% in 2024, driven by asset appreciation independent of operational performance, although increases in green fees and visitor revenue have also contributed to the overall growth and desirability of golf clubs.

Demographics support the thesis. The National Golf Foundation reports 47.2 million Americans now play, with 48% aged 6 to 34 and female participation up 41% since 2019. Off-course formats function as acquisition funnels, with nearly two-thirds of new golfers starting at simulators or Topgolf before progressing to traditional play.

Public markets have not reflected this in valuations. Topgolf traded as struggling entertainment, Callaway as mature equipment. Private equity sees a lifestyle sector with real estate leverage, demographic tailwinds, and multiple expansion potential if operational improvements materialise.

The hidden asset on every balance sheet

Golf courses do not just generate membership fees and green fees. As any owner or member knows, they sit on land, often in markets where development rights have become increasingly valuable, and supply is constrained by zoning restrictions and environmental regulations.

A private club in affluent suburbs might operate as a $15 million annual revenue business with modest margins. But it sits on 150 acres worth $50 million to $100 million in markets where residential or commercial development is possible. Public markets value the operating business. Private equity underwrites both simultaneously.

A friend at a well-known investment firm told me that buying golf courses is "a real estate trade disguised as a lifestyle investment." The comment captures what public markets miss. When PE firms analyse golf course acquisitions, they are running two parallel valuation models: one for the operating business, one for the underlying land. If the operations improve, returns come from EBITDA multiple expansion. If they do not, returns come from eventual land monetisation.

This dynamic explains why golf course values increased 38% in 2024 even as some operators struggled with profitability. The land appreciated independently of how well the business performed. For PE firms, this creates asymmetric return profiles with built-in downside protection that entertainment venues and pure operating businesses simply do not have.

Concert Golf and Arcis Golf are not just consolidating club operations. They are accumulating land banks in markets where future development optionality has significant value. The membership revenue funds operations and debt service. The land provides downside protection and upside optionality that does not appear in enterprise multiples.

Topgolf operates differently. Its venues require 10 to 15 acres in high-traffic metropolitan locations, but the business model is capital-intensive with significant depreciation. The company spent $30 million to $40 million building each venue with estimated payback periods of 2.5 years when things worked correctly. But Topgolf typically leases rather than owns land, meaning it lacks the asset appreciation cushion that course operators enjoy. When same-venue sales went negative for several consecutive quarters, there was no hidden land value to offset operating underperformance.

This distinction matters for understanding which PE golf bets have durable structural advantages versus which depend entirely on operational execution. Course operators own appreciating assets that provide downside protection. Entertainment venue operators rent depreciating assets that only work if traffic and spending metrics perform as projected.

The firms deploying capital understand this difference. It shapes deal structure, leverage levels, and expected hold periods. It also explains why secondary buyouts like Bain acquiring Concert Golf work at valuations that seem rich based purely on operating metrics. The real asset is not just the business. It is the portfolio of land in markets where 150-acre parcels are increasingly scarce and valuable.

Beyond buyouts: PE's expanding golf footprint

The $5.5 billion deployed into golf over 18 months represents more than just the three headline transactions. Private equity's engagement spans full acquisitions, minority growth investments, and joint venture structures across the entire golf ecosystem.

Golf entertainment venues attracted significant capital beyond Topgolf. PopStroke reached a $650 million valuation with backing from Tiger Woods Ventures and TaylorMade. Apollo's Invited partnered with VICI Properties to fund BigShots Golf with up to $80 million in construction financing. Fortress provided a $26.5 million loan to Drive Shack for its Puttery locations. These deals follow a different model than course acquisitions, requiring heavy upfront capital but offering faster payback when executed correctly.

Strategic investments in technology and equipment represent another avenue. Full Swing Golf simulators, TrackMan data systems, and Toptracer ball-tracking technology all received PE backing or corporate investment tied to larger golf portfolios. These picks-and-shovels plays benefit regardless of which course operators or entertainment venues succeed, positioning investors across the value chain rather than betting on individual operators.

The financing reality shapes all of this. Traditional lending for golf transactions has largely evaporated. Banks remain cautious following pandemic-era uncertainty and the ongoing commercial real estate crisis driven by remote work trends. Interest rates on mezzanine and construction debt make ground-up projects increasingly difficult to justify. Private equity has become the only consistent capital source willing to fund golf transactions at scale, giving PE firms significant pricing power and deal selectivity.

This concentration of capital creates asymmetric leverage. Sellers with attractive assets face limited buyer universes, compressing valuations despite strong operational performance. PE firms can be selective, waiting for motivated sellers or distressed situations where control can be acquired at favourable multiples. The daily fee course market demonstrates this dynamic clearly. Owners want pandemic-era valuations. Institutional buyers will not pay them. Neither side has blinked yet, but with traditional financing absent, PE will likely dictate terms when transactions eventually occur.

The playbooks they're running

The three deals reveal distinct operational strategies, each suited to different market conditions and asset characteristics.

Concert Golf and Arcis Golf execute classic roll-up strategies. Both consolidated fragmented markets by acquiring independent operators, then applied professional management and technology investment to improve margins. Arcis reached a $2 billion valuation through 18 acquisitions in three years, growing to 70 courses. Concert Golf followed an identical path under Clearlake, then sold successfully to Bain. The model works because golf operations historically lacked institutional management.

Strategic Sports Group's $3 billion commitment to PGA Tour Enterprises represented ecosystem control. The $1.5 billion initial investment made nearly 200 Tour members equity holders whilst bringing operational expertise from Fenway Sports Group. This mirrors how Arctos Sports Partners operates, taking minority stakes and generating strong returns through long-term value creation.

Leonard Green's Topgolf acquisition follows a turnaround playbook. The firm sees strong brand recognition with execution problems that operational discipline can solve. Leonard Green is betting consistent execution can restore margins whilst expanding selectively.

When leverage meets golf culture: three cautionary tales

Apollo Global Management paid $1.1 billion in equity (plus $1.1 billion in assumed debt) for ClubCorp in 2017. The firm bought the world's largest club operator at roughly 7.5 times EBITDA, financing the deal with significant leverage as PE typically does. Eight years later, ClubCorp, now rebranded as Invited, operates over 200 clubs and reportedly explores an IPO at a $4.5 billion valuation. That looks like a PE success story.

What the headline valuation obscures is what happened in between. By 2023, ClubCorp faced $1.1 billion in debt maturity with negotiations faltering. Apollo began moving assets into different legal entities, a move that typically precedes controversial drop-down transactions allowing firms to borrow against transferred assets whilst leaving existing creditors in weaker positions. The company also switched from cash-paying debt to payment-in-kind financing, where interest compounds rather than being paid, increasing total debt load whilst preserving short-term cash flow.

This demonstrates a central tension in PE golf investments: operational execution matters less than financial structuring when debt loads are heavy, and cash flows tighten. Apollo eventually stabilised ClubCorp and the IPO may validate the thesis. But the path there involved financial manoeuvres that worked because golf club membership cash flows are sticky and predictable, not because operational upgrades alone justified the valuation.

The second cautionary tale comes from youth sports. PE consolidation of ice rinks increased average hourly rates from $200 to over $500, pricing out families whilst generating short- term returns. The long-term consequence is eroding the participation base that sustains the entire ecosystem. Black Bear Sports Group, which dominates youth hockey facilities, now prohibits parents from recording their own children's games unless they pay for corporate streaming services.

The third lesson is simpler but no less important: running golf facilities with a corporate mindset becomes precarious when margin improvement comes at the expense of experience quality. If membership fees at PE-owned clubs rise faster than value delivered, affluent members leave for clubs with better service. If course operators prioritise cost cuts over maintenance standards, regulars defect to competitors who understand that a well manicured green matters more than a new pro-shop light fixture.

The firms buying into golf understand these risks intellectually. Whether they can navigate them practically whilst servicing significant debt loads and meeting investor return expectations is a different question entirely.

What happens next, and who's vulnerable

Invited's reported IPO exploration at a $4.5 billion valuation becomes the critical test. Success validates the entire consolidation thesis and likely accelerates M&A activity. Failure forces sector-wide recalibration.

Golf equipment remains fragmented with substantial businesses (Titleist, TaylorMade, Ping) that would attract competitive bidding. Regional management companies with 5-15 courses face consolidation pressure, lacking scale but having defensible local relationships. Simulator technology and smaller format entertainment venues represent another roll-up opportunity if unit economics work.

What nobody knows yet

Concert Golf's secondary buyout suggests PE's core thesis has credibility: better operations and multiple expansion can generate returns even with modest market growth. Clearlake proved it worked over three years and exited profitably.

But the broader test remains ahead. The wave of minority stake investments in major league teams since 2020 remains largely unrealised. League-imposed holding periods mean exit timelines haven't arrived yet. Arctos structures its funds as evergreen with no end date, explicitly acknowledging sports require patient capital. When PE firms eventually need to exit, valuations will face their first real market test.

Golf has advantages team sports lack: real estate provides tangible asset value, demographic trends support long-term growth, off-course formats expand the addressable market, and equipment operates independently from course operations.

Golf also has structural challenges that make standard PE playbooks difficult. Culture matters more than efficiency in premium private clubs. Performance credibility trumps marketing budgets in equipment. Entertainment venues depend on experience quality that operational leverage can easily damage.

The firms deploying capital believe they can navigate these tensions. The market will reward firms that build sustainable businesses combining operational excellence with genuine understanding of what makes golf different. They'll exit profitably and accelerate the next consolidation wave.

Most won't. They'll run playbooks that work elsewhere but fail when culture matters more than spreadsheets. They'll discover golf operations require more than cost cuts, and entertainment venues need experience design as much as financial discipline.

The next 18-24 months will clarify which outcome dominates. Invited's potential IPO, Topgolf's same-venue sales trajectory, and L.A.B. Golf's ability to scale whilst maintaining brand integrity will all provide evidence.

Private equity has lined up their putt. Now we wait to see if it drops.

The greatest investment ever made by a golf writer?

Sometimes the worst shots lead to the best outcomes.

In 1983, Golf magazine editor George Peper sliced his tee shot on St. Andrews' 18th hole so badly it crossed the adjacent road. While searching for his ball, he spotted a two-bedroom flat for sale overlooking the Old Course. He bought it for £42,000 ($65,000).

Twenty-nine years later, Peper listed 9A Gibson Place for £1.5 million ($2.35 million), a 36x return that crushed the S&P 500's 18x gain over the same period. The property sits directly off the 18th hole of the world's most famous course.

Peper and his wife Libby lived there full-time through much of the 2000s, during which he wrote "Two Years in St. Andrews: My Home on the 18th Hole." The decision to sell was "painful," Peper admits. "I wish we could afford to keep the place. But this is the economic reality."

The lesson: In golf and investing, sometimes you find the best opportunities when you're off course.

Next week

We reveal how South Korea has quietly built the world’s most advanced, tech-driven golf economy and why it’s about to reshape the future of the sport.

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Have a good week. Until next Friday,

David

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