While tournaments constitute the majority of a golfer’s earnings, they also make money through various sponsors and endorsements. Additionally, they promote brands on the course by using company products during gameplay. The Topgolf Callaway Brands Corporation is one such leading company that professional golfers actively use.

They produce athleisure for tournaments as well as golf equipment. From former World No. 2 Xander Schauffele to rising phenom Akshay Bhatia, the PGA Tour is filled with company-sponsored players. While previously a single entity, recent announcements indicate that the two will now operate as independent leaders in their respective markets.

Topgolf Callaway to split after a stock price drop in January

In March 2021, Callaway Golf Co. fully acquired TopGolf Entertainment Group, which was valued at $2 billion. The company was renamed Topgolf Callaway Brands Corporation. However, at the beginning of March 2024, there were rumors about a possible split. In August, the company reported that its second-quarter revenue was $494 million, compared to over $917 million in the first six months. Sales had dropped by a significant 8%.

Responding to the performance, the board of directors finally initiated the separation of its two primary businesses on September 4. The company’s CEO, Chip Brewer, stated, “We remain convinced Topgolf is a high-quality business with significant future opportunity. At the same time, we have been disappointed in our stock performance for some time, as well as more recent same-venue sales performance.”

TopGolf Callaway Brands trades on the New York Stock Exchange. According to financial reports, the company’s stock has only seen a decline since a peak of $36.92 per share in May 2021. In August, it dropped to $9.94, and as of the final day of working together, the shares closed at $10.76 per share. “The creation of two independent companies, each with a distinct focus and proven business model, is intended to drive continued momentum in both businesses and deliver value to all our shareholders,” said John Lundgren, chairman of the board of directors of Topgolf Callaway Brands.

The two companies now intend to go their ways with the expectation of ‘positive cash flow, and Strong Balance Sheets’.

Plans of Callaway and TopGolf performing separately

On one hand, the equipment brand Callaway intends to continue holding a larger share of the golf equipment business. Despite splitting from TopGolf, they will still collaborate with the renowned tracking technology company TopTracer. For the lifestyle segment, they will retain partnerships with Travis Mathew, OGIO, and Jack Wolfskin.

On the other hand, the luxury lifestyle brand TopGolf will shift its focus solely to the entertainment business, moving away from apparel stocks. This will include over 100 driving range entertainment centers globally. The company also intends to slow down its recent venue development for the upcoming year, aiming to keep the number concentrated around the mid-single digits.