Cold Open
As I stood in line at a diner in Milford, Connecticut, the last thing on my mind was the hat on my head.
It was a scorching-hot Saturday morning in the summer, and all I could think about was the first sip of iced coffee.
As I walked toward the counter to pick up my to go order for myself my future in laws, a semi- toothless chef (he had about 4 teeth) said a word that snapped my caffeine-depleted consciousness to attention: the (redacted) name of the (t20) club on the hat I wore.
Now, my brain felt like soup as I tried desperately to make sense of the situation. How does this four-toothed diner cook know about this top 20 golf course?
The mind makes strange rationalizations under duress, but was I under duress? It kinda felt like it. I was in this guys’ world now. Maybe he practices some sort of dark magic? Or is Oz the Mentalist’s black sheep uncle? I couldn’t make sense of the situation.
The two brain cells that were functioning at the moment allowed me to do two things.
Raise my left eyebrow inquisitively
Say the words “Yea, how’d you know?”
Graceful and eloquent, I know.
He looks at me dead in the eyes, smiling with all of his four teeth and says:
“Bet you didn’t expect me to know what (redacted) is.”
Calling that the understatement of the century would be generous. I most certainly did not expect to be ambushed by a line cook in Connecticut who knew what the logo for (redacted) looked like.
He went on to say he used to be an assistant chef at the club about 30 years ago.
Sometimes the simplest explanation makes the most sense. I smiled, took a huge gulp of the iced coffee, and decided it would be impossible to forget this encounter. Golf is the great unifier.
Top Golf Sale
Callaway unloaded it’s majority stake in Topgolf for $1.1B on Tuesday.
Now, I’ll touch on a few of the financial reasons for the fire sale (Callaway acquired Topgolf for $2 billion), but I’d like to start with the cultural issues, which I mentioned in this tweet.
Cultural Headwinds
Callaway bought Topgolf to onboard more casual players into the game, with the hope that these new players would bolster it’s equipment business. After a year or two, the incongruity between the “golf is entertainment” crowd and the hardcore golf folks who buy Callaway clubs was evident. Spending $2B on a top-of-funnel marketing effort seems a bit odd to me. Maybe I’m missing something? The stock price indicates I’m likely right.
If you’re an M&A guy and have any insight into this, let me know. It’s a fascinating fall from grace.
At the end of the day, who is the target individual for Topgolf? It seems like they went after the casual younger Millennial and older Gen Z crowd, only to swing and miss.
At a high level, watering down golf to the form which it takes at Topgolf has been proven to be an unsustainable model.
The casual players won’t catch the golf bug and return (players returned on average 1.5x per year), and the true addicts will find someplace like Golf Ranch where they can actually practice. (Full review of the Golf Ranch in CT coming after Thanksgiving).
The concept of turning golf into bowling is a 0.
A Financial Mess
Here are a few data points I compiled for the guys who want to dig into the numbers:
Post-merger, Callaway's long-term debt increased by 69%, reaching $1,495.5 million by the end of 2024, adding financial strain as the company serviced higher interest expenses of $231.2 million in 2024.
Topgolf's 2024 net revenues were $1,809.4 million, up 2.7% from 2023, but driven mainly by new venues rather than organic growth, with same-venue sales declining 8.6% due to macroeconomic pressures.
For Q3 2025, Topgolf reported revenue of $472.2 million (up 4.2% year-over-year), but adjusted EBITDA remained flat at $83.5 million, impacted by tariffs and operational costs.
Full-year 2025 guidance for Topgolf revenue was raised to $1.77–$1.79 billion, yet same-venue sales are expected to decline mid-single digits overall, highlighting stalled visitor growth.
Venue construction costs range from $30–$40 million per site, with top venues generating $20–$30 million annually, but payback periods have extended beyond the initial 2.5 years due to declining returns.
Average spend per visitor at Topgolf is approximately $36 (I’m highly skeptical about this number, feels like some WeWork “adjusted EBITDA math), including gameplay, food, and beverages, though it dropped 4% year-over-year in Q1 2025 amid consumer pullbacks.
The average group size at Topgolf venues is 4 people, with bays accommodating up to 6 players, influencing per-person costs and total spend estimates of $100–$200 for a 2-hour session.
Visitor traffic trends show declines, with Q1 2025 traffic down 8% and same-venue sales falling in the last four quarters, attributed to broader economic factors and reduced corporate events.
Sources, if you’d like to read further:
3 Things I Know I Know
I’m a Duck Head pants guy now. I stumbled upon them as I was perusing the different menswear stores in Charleston, and bought a pair immediately. The pants have the right combination of high quality fabric and cut that makes them wearable on and off the golf course.
I’ve started an investigation into golf “speed training”. My hypothesis is that the entire industry is a scam. More to come on that front.
I’m searching for my college essay, which I wrote 11 years ago. It was titled “Mashed Potatoes”, and discussed strange phenomenon of yelling stuff in players backswings in golf tournaments. I need to find it, as it was the first ever essay I ever wrote about golf. A true BTG original. As Steve Jobs famously said, you can only connect the dots looking backward.
Logo of the Week
The Gentle Rebuke - Your Host is a Cheater
I’ve started hosting a twitter spaces (read: live podcast on Twitter) on Tuesday nights at 7pm with a guy named UESGolf.
This past Tuesday, one listener chimed into mention an interesting dilemma: He was invited to play a top 20 golf course in the country, but noticed his host blatantly cheating during their friendly money match. I could write another thousand words on this dilemma, but I am out of space.
I will leave you with this quote from Michael Joesphson:
“Character is the moral strength to do the right thing, even when it costs more than you want to pay."
Talk soon,
BTG