CARLSBAD – Less than a month after announcing its intent to separate its golf entertainment venue segment from its golf equipment and apparel segments into two independent companies, Topgolf Callaway Brands (NYSE: MODG) inked a deal last week that will benefit both.
Managing Director & President, EMEA
Topgolf Callaway Brands
The Carlsbad-based company shared Sept. 19 it had entered into a multiyear agreement with Golf Saudi Entertainment, LLC that will bring Topgolf Callaway’s entire family of brands – including Topgolf, Callaway, TravisMathew, Odyssey and Ogio – to Saudi Arabia.
Saudi Golf’s across the board support of Topgolf Callaway Brands’ segments include building three Topgolf venues that will be owned and operated by Golf Saudi. The three venues, expected to be up and running by 2028, may be joined by two more in the future, as per an option in the deal.
For Callaway’s golf equipment and apparel segments, Callaway Golf, Odyssey, TravisMathew and Ogio will become the official brands for the Saudi men’s, women’s and junior national golf teams as well as for Saudi elite golf professionals and golf pros working at Golf Saudi facilities. Golf Saudi will also be the exclusive distributor of Callaway Golf, Odyssey and Ogio products in Saudi Arabia.
Specific financial details of the deal were not disclosed.
“We’re excited to enter another market in the Middle East with three venues in Saudi Arabia. We have found a strong partner in Golf Saudi to help us bring our modern golf brands – Topgolf, Toptracer, Callaway Golf, Odyssey, Ogio and TravisMathew – to the region and help transform Saudi Arabia into an exceptional golfing nation,” said Callaway Golf Managing Director and President of EMEA Ben Sharpe.
Sharpe – a former CEO at Carlsbad-based TaylorMade – joined Topgolf in 2018 as chief franchise officer. In May of this year, Topgolf Callaway Brands named him to his recent role managing the company’s Europe, Middle East and Asia business, working out of the company’s London office.
Spinning Off Topgolf
The Saudi Arabia expansion follows Topgolf Callaway Brands’ Sept. 4 announcement it was pursuing spinning off the Topgolf business to Topgolf Callaway Brands’ shareholders. The company announced it was still evaluating all options for separating the segments into independent businesses, but that spinning off Topgolf into a public company in a transaction that is intended to be tax-free to both the company and its shareholders is the most likely path. The company expects to execute the spin-off of Topgolf in the second half of 2025.
President & CEO
Topgolf Callaway Brands
“Looking forward, we remain convinced that Topgolf is a high-quality, free cash flow generating business with a significant future value creation opportunity. Topgolf is transforming the game of golf and is expected to deliver substantial financial returns over time,” said Topgolf Callaway Brands President and CEO Chip Brewer. “At the same time, Topgolf has a different operating model, capital structure and investment thesis than Callaway, and as a result, the Board has determined that separating Topgolf will best position Topgolf and Callaway for success and maximize shareholder value.”
Topgolf Callaway cited improved strategic focus, capital allocation and operating structure for each business as rationale for splitting Topgolf from Callaway.
The company’s Topgolf segment brought in $1.8 billion in the first half of the fiscal year, according to Topgolf Callaway’s Q2 report – and the golf entertainment venue business is still growing rapidly. In addition to the Saudi deal for three new venues, Topgolf this month opened a venue in Greensboro, North Carolina – its fourth in the state – and broke ground on a two-level venue in Panama City Beach, Florida that is set to open in summer 2025 and will be Topgolf’s 10th venue in the state.
A San Diego venue located on Shelter Island is currently working its way toward approval.
Topgolf Callaway’s sports equipment and apparel segments brought in $2.5 billion so far this fiscal year.
“Over the last decade plus, we have transformed Callaway into the No. 1 brand in golf equipment, while building a successful and complementary apparel and accessory business,” Brewer said, adding that Callaway will be “well understood and valued” by market investors “on a stand-alone basis”
When Topgolf and Callaway become stand-alone businesses, they will still benefit from “ongoing, value-creating commercial agreements with one another,” according to the company. For example, Callaway will continue to be the exclusive golf equipment partner for Topgolf.
After the spinoff is completed, Callaway will continue to be led by Brewer, and Topgolf will continue to be led by its CEO Artie Starrs.
Topgolf Callaway Brands
FOUNDED: 1982
FOUNDER: Ely Callaway Jr.
CEO: Chip Brewer
HEADQUARTERS: Carlsbad
BUSINESS: Sports/Leisure
REVENUE: $4.28 billion (2023)
STOCK: NYSE: MODG
EMPLOYEES: 30,000+
WEBSITE: www.topgolfcallawaybrands.com
SOCIAL IMPACT: In 2019, the company launched a global sustainability program to increase awareness and structure to its social and environmental sustainability efforts.
NOTABLE: Callaway is the world’s largest manufacturer of golf clubs and was founded by a former Burlington Industries textile president Eli Callaway Jr., and is said to have first sold clubs out of his car.
