PGA Tour Looks To China

October 25, 2016, 2:47 PM UTC

It’s easy for business leaders to forget that they’ve got more to worry about than advancing technology, regulation, the election, and the war for talent. There’s still China. Though it’s growing slower than it used to be and slower than the official statistics say, it’s still growing faster than most economies and way faster than any economy near its size. So yes, you still have to be there, and it still isn’t easy. That’s one reason I recommend you read this new article, published this morning, by Fortune’s Scott Cendrowski. It’s called “How the PGA Tour Sells Golf to China,” and it’s a valuable tale for any organization facing massive opportunities and challenges in the world’s No. 2 economy.

As Scott shows, “In terms of golf’s potential, the PGA’s timing in China couldn’t have been better; in terms of the country’s politics, it couldn’t have been worse.” Golf in the U.S. is declining, with the number of courses shrinking every year. China is the obvious potential savior, with a fast-growing middle class that could get hooked on the prestige of playing and watching a sport that for now is restricted to China’s richest people. The process is underway. “Already, golf teachers have flocked here from Europe and the U.S., charging $600 a lesson, and driving ranges are crowded with first-time players,” Scott reports. This is not an abstract topic for Scott, an ace golfer who lives in Beijing and plays the country’s courses.

The PGA Tour’s goal is to build a tournament schedule that attracts foreign as well as Chinese golfers and that develops Chinese golfers into world-class competitors who play at the highest levels in Europe and the U.S. as well as in China. Such golfers are on the horizon. You’ll meet 19-year-old Marty Dou, who finished higher than PGA Tour stars Adam Scott and Hideki Matsuyama at a tournament in Shanghai last year.

But there’s a big problem: Chinese president Xi Jinping has been waging war on golf as part of his anti-corruption campaign; memberships in expensive private golf clubs have been a favorite form of graft for top officials. Officially, the government has softened its anti-golf stance and has declared golf an approved middle-class sport, but unenthusiastically. As Scott notes, “In the five-year plan, it was listed between table tennis and billiards.”

In short, the PGA Tour is confronting many of the issues facing every business enthralled by imagining what would happen “if only 2% of the Chinese population bought our product….” You’ll not only be entertained by Scott’s skillful telling of this story, you’ll also get a useful new perspective on issues you’re dealing with or will be.


Correction: In yesterday’s Power Sheet we misidentified the source of data about Time Warner’s economic profit. The correct source is the EVA Dimensions consulting firm.

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Produced by Ryan Derousseau

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