|Tuesday, August 12
Updated: August 14, 10:12 AM ET
Legendary brand will soon have new owner -- again
By Darren Rovell
If Jim Furyk wins this week and becomes only the fifth player to win the U.S. Open and the PGA Championship in the same year, one of the beneficiaries will be the Ben Hogan Golf Company.
Furyk, after all, plays with Hogan irons and a Hogan-branded putter.
But what it will mean to the business of the 50-year-old company, started by the golf legend bearing its name, is unclear at best. Given the number of people that have called themselves "owners" of the company over the past two decades, it's amazing that the brand is even alive today.
Over the past 19 years, the company has been handled by four different ownership groups. With the recent collapse of Spalding, its most recent caretaker, another owner could be managing the Hogan name if they submit the winning bid in the Sept. 3 bankruptcy auction.
"A lot of people have tried to destroy this brand over the years and they haven't yet," said Nick Raffaele, a 10-year company veteran who serves as its director of tour relations.
Hogan launched the business in the fall of 1953, after winning five of six tournaments, including three majors.
In a letter Hogan wrote that year, he said that clubs made by his company "shall be as near perfect as modern day tools and instruments can perform." When the initial sets to hit shelves weren't of high enough quality, the perfectionist Hogan withheld their release.
Seven years later, he sold out to American Machine & Foundry (AMF), while maintaining a management role. But as Hogan grew older, he started losing more and more control of how his name was being used. It was not the easiest thing to witness for the man who was so meticulous that he wouldn't sign autographs as he got older if his penmanship wasn't exact that day.
AMF eventually put its name on the clubs alongside the Hogan branding. The company also attempted to to sell Hogan equipment to the mass market, despite the fact that Hogan's irons were meant to be for the more serious player.
In 1984, investor Irwin Jacobs bought Ben Hogan from AMF for $15 million.
"He was very protective of his name," said Jacobs, who negotiated for some lessons from Hogan as part of the deal.
But Hogan didn't have much say in how his moniker would be marketed -- since making money was the bottom line for the new company.
In four years, Jacobs turned the company around and sold it for $55 million to Cosmo World, a group of Japanese investors (the same group purchased Pebble Beach and three other golf courses for $900 million two years later). As part of the Ben Hogan acquisition, Hogan agreed to visit the investors once a year in Japan, but he immediately admonished the new investors to be careful not to tarnish his name.
"Hogan was a god in Japan and they were wowed by him," Jacobs said. "But he was also upset that he was licensing his name to the Japanese, given that he was in the Army during World War II."
Hogan wasn't the only one disturbed. With the acquisition, those working for a previously All-American brand still based in Hogan's hometown of Fort Worth, Texas, were confused as to what consumer they were primarily supposed to serve.
"It seemed as though we were shipping more product to Japan than around the United States," said Tom Stites, a club designer who worked for Hogan from 1986-89. "As we went through each transition, his influence was seemingly diminishing every time."
The near death of the Ben Hogan Company came after it was acquired by Virginia investor Bill Goodwin in 1992. Goodwin moved the factory out of Fort Worth to Richmond, Va. Less than a quarter of the company's staff followed.
Not only were many of the company's lifers gone, but also -- under Goodwin's rule -- revenues declined from over $60 million to about $10 million, current company officials say.
"It was like taking the Celtics out of Boston," Raffaele said. "The company completely lost its mystique."
Hogan was once again devastated -- this time by the actions of the new owner.
"It very much saddened him when the company moved out of Fort Worth," said Sharon Rea, Hogan's personal secretary from 1993-1997. "He didn't have any children and this was his baby."
In 1997, Hogan died at the age of 84. He didn't get to see the company move back to Fort Worth, this time under Spalding's control (the company purchased the Hogan brand in 1997).
Spalding rebuilt the Hogan brand with the help of former employees who returned to work for the company. Spalding launched a Hogan-branded golf ball last July and partnered with elite putter specialist Bob Bettinardi in January. Earlier this year, company officials announced plans to make Hogan woods and expanded line of Hogan accessories. Things were looking up again.
But Spalding was not in good financial shape and in April, the company sold its sporting goods assets to Russell Athletic for $65 million. Its group of products under the Top-Flite umbrella -- which includes Top-Flite, STRATA and Hogan – were left on their own. Top-Flite subsequently filed for bankruptcy in June.
"There was no way of me knowing that Spalding was in financial straits," said Bob Bettinardi, whose putters will have Hogan branding in every market but Japan. "But even with what is going on right now, we cannot make our putters fast enough. I went from 400 accounts to 6,000 accounts on the day I signed the agreement."
Although Bettinardi, like many others, has no idea how a new ownership group will treat the Hogan brand, he says: "I am not fearful because my putter is a good product."
In the meantime, those working for the Hogan brand are trying to make sure that their customers don't see any evidence of the upcoming company turnover. This despite the fact that they themselves aren't sure about their own future in the industry.
"I don't know what the strategy will be of the company that buys us," said Mike Ferris, vice president of the Ben Hogan brand. "But to the consumer, we're out marketing doing the same things we've done in the past."
Hogan isn't suffering from a lack of exposure given Furyk's success and visible endorsements from golfers like Justin Leonard, Len Mattiace and Hal Sutton.
The favorites to purchase the brand are Callaway -- known for its Big Bertha line -- and Adidas, which owns the Maxfli and TaylorMade brands.
The Hogan irons currently own 1.6 percent of the market, the Hogan Apex Tour golf ball maintains a one percent stake, while the Hogan putter by Bettinardi owns a .6 percent share, according to Golf Datatech, an independent market research company.
"The new company must realize what they have in Hogan and be willing to take years to massage and grow it," Raffaele said. "They have to have a long term strategy, since this isn't a home run-type business."
"Hogan is a nice boutique company," Jacobs said. "It could be a great business or a poor business, it just depends on who buys it. If it gets seven-day-a-week tender, loving care it can work well, but if it's part of a conglomerate, it probably will fail."
A new company will also have to continue to make Hogan's name relevant to consumers. A study by market research firm Marketing Evaluations revealed that 90 percent of men over 50 knew who Hogan was, while only 40 percent of men under 35 knew of the golfer. The older age bracket was also twice as likely to mention Hogan as a positive icon.
"If a company tries to market the Hogan name to younger people, they might have a problem," said Henry Schafer, executive vice president of Marketing Evaluations.
Respect for the Hogan name won't keep competitors from trying to bury the brand. On Friday, Nike -- under the leadership of Stites, whose company was bought out by Nike in 2001 -- opened its 28,000-square foot factory in Fort Worth, roughly six miles from the Hogan factory.
Said Rea: "Let's just hope that the new company will know what to do with the Ben Hogan brand and in Mr. Hogan's words, not 'screw it up.'"
Darren Rovell, who covers sports business for ESPN.com, can be reached at firstname.lastname@example.org.