Does Tiger Woods' Latest Disgrace Mark a New Low for the Golf Business?

NEW YORK (TheStreet) -- Tiger Woods was in the news again this week, and on the surface, it had nothing to do with golf -- or even an authentic story, for that matter.

Golf Digest published a mock interview where the writer projected his own thoughts as if they were Tiger Woods' comments. Dan Jenkins never spoke to Woods; he simply satirized Tiger on a lot of touchy subjects, from his failed marriage to Elin Nordegren to his tipping habits.

It was pretty nasty.

Why is this relevant to the investor? Well, this may mark the bottom for the golf business. Or it may show just how bad things are in the golf business, and how far they have to go to recover.

Tiger Woods is, basically, this generation's only household golf name -- sorry, Phil Mickelson. And he has slipped so far down the respect continuum that he is getting ridiculed in national publications by reputable writers.

And unfortunately, it's not a bottom.

It's only fitting that next week is the fifth anniversary of the night Tiger was chased out of his home as his seemingly ideal life crumbled. News was breaking about a string of extra-marital affairs, and his soon-to-be ex-wife wasn't happy about it.

The bloom was off Woods' Sunday rose-red Nike (NKE) golf shirt.

The image of Tiger Woods would be damaged forever, and maybe his is game too -- and maybe the entire game of golf as well. (Woods has not won a major tournament since that fateful Florida night.)

And the business of golf is in free fall. And participation is no longer growing.

According to Bloomberg, last year Americans played the fewest rounds of golf since 1995 -- ironically, the year before Tiger turned pro. Courses are closing faster than they are opening by a ratio of better than 10-to-1. And despite the macro-economic rebound from the Great Recession, spending on the game is weak.

For Tiger, it may be as much about injuries as it is karma, but one thing is for sure: without the old Tiger Woods -- winning and reputation included -- golf is a niche sport that cannot grow.

It appears to be more secular than cyclical. That means companies involved in golf are tricky investments -- some would say toxic.

Start with the safest play: Nike.

Behind Tiger's initial rise to greatness, the company built a golf business that is pushing $800 million a year in revenue. The brand is now established and respected in golf, and the loss of Tiger has been softened by the game's new star: Rory McIlroy.

The segment won't grow at previous rates at Nike, but Rory and their other businesses are strong enough to compensate.

That's not true for some other companies. Callaway Golf (ELY) isn't involved with any Tiger Woods sponsorship, but if you want to know what a basically Tiger-less golf year looks like, Callaway could be the case study. In terms of the stock, on a 52-week basis, as the S&P 500 (SPY) has gained about 15%, Callaway is down about 10%.

This year? The broader index is up more than 10%, while ELY is down 5%.

You get the point.

Then there is Dick's Sporting Goods (DKS) . Its stock is down more than 15% year to date, and golf is widely considered the biggest drag on business. And Dick's stand-alone Golf Galaxy stores saw same-store sales drop close to 9%, and this past quarter is not the first in which this happened.

Although the company says the golf business remains profitable, there is much less patience in the flagship Dick's stores. The company is actively taking retail square footage away from golf and giving it to children's and women's apparel.

If you want a bull case, it is Under Armour (UA) . Its apparel -- in both style and fit -- appeal to the younger demographic, and to that end, the company sponsors some of the game's best and youngest American stars, like Jordan Spieth.

Right now, Rory McIlroy might be more accomplished. But boy, there is something about an American-born golfing superstar.

Isn't that right, Tiger?

At the time of publication, the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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