Economic Potential

According to NGF and other estimates:

    Assuming $1,000 as a ball park estimate for a reasonable set of clubs, the initial potential market is $47 Billion. Data from NGF and others estimate annual golf club sales at $3-4 Billion.

    For comparison: Much of Callaway Golf's past financial success was predicated on the success of a single golf club, Big Bertha. Before Bertha, Callaway Golf’s total sales in 1990 were 21.5 million. Bertha came out in 1991. The company went public in 1992. Sales in 1995 reached 553 million.

1990 1991 1992 1993 1994 1995
21.5 54.7 132 255 448 553

    Following almost a decade of stagnant growth, Callaway's total sales essentially doubled every year for four consecutive years thanks to Bertha; here is their corporate bottom line:

Year 1992 1993 1994 1995 1996 1997
Sales in Mil 132 255 449 553 679 843
Profit 19.3 41.2 78 98 122 133
Margin 14.62% 16.16% 17.37% 17.72% 17.97% 15.78%

    Even as the world's largest golf club manufacturer, Callaway has never enjoyed a sustained average market share of more than 20%. With 70,912,129 shares outstanding at an average closing price of $19.20, the average market capitalization of Callaway was $1.36 billion in 1995. For a time their share price exceeded $30 putting the market cap at more than $2 Billion. Not only is there no evidence that Big Bertha or any of her successors have ever lowered the score of a single golfer, unlike Ping's square grooves, the USGA never challenged Big Bertha or any of her successors until the recent challenge of the "spring like effect". Bertha's success and that of her successor clones appear to have been simply fads based largely on hope and wishful thinking.

    The economic potential of EIG is not all roses nor can its economics be absolutely modeled after existing companies. There is a reason Warren Buffet likes businesses that have a "sustainable competitive advantage." I have been to three separate patent attorneys. Two have said that it might be difficult to protect EIG with patents while the third and most experienced recommended proving the economic viability of EIG before seeking patent protection. This is the reason I decided to seek brand name protection for EIG before seeking patent protection. If the theory is correct, and with the brand name protection afforded by "Rush Limbaugh", Excellence in Golf should easily produce after tax profits approaching $100 million annually.

There is more to life than money. The real potential payoff for EIG is political.