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Is the Golf Industry a Birdie or Bogey Investment?

Tickers in this article: AAPL ADDYY ALDA DKS ELY NKE PMMAF UA
NEW YORK ( TheStreet) -- I closely track the various machinations of the golf world as per my daily duties, although it's more about leaderboards and scorecards than balance sheets.

Yes, it's a niche industry but also an advertising darling that attracts the desirable high-income demographic. (If you don't believe me, catch the various ads peppering a PGA Tour broadcast.)

This time of year, the various club manufacturers fall over themselves luring the sport's biggest names to wear and swing their gear. Callaway (ELY) , Nike (NKE) , Adidas (ADDYY) (TaylorMade, Noodle, Ashworth & Adams) and Aldila (ALDA) shafts reps work the player agents (and vice versa) securing the best players to their rosters. Companies firmly believe high-producing stars sway us golf lemmings to buy their clubs and threads.

The question is, does it make sense for investors? Maybe...

Gone are the halcyon days of big golf growth. In today's world, the time crunch of squeezing at least five hours in between jobs and hectic parental duties is a careful proposition. And that's if the weather cooperates.

In the last decade, golf-related gross sales (except golf rounds) was a near-perfect bell curve from 2002-2011, peaking around $2.9 billion in annual sales between 2004-07 before the latest recession ($2.2 billion).

Tiger Woods generated awareness waves of tsunami proportions for Nike, but one could argue he affected apparel sales far more than moving equipment off the shelves. On Monday, Nike announced signing the world's #1 ranked golfer, Rory McIlroy, to a rumored Tigeresque $25 million "head-to-toe" per year deal (all Nike clubs, balls, bag, shoes and clothing) to create a Dynamic Duo of golf.

The company will reap the benefits if both marquee players contend in golf's four major championships, thereby splashing Swoosh logos incessantly onto viewer HD screens. Last year, Woods delivered an estimated $18.9 million to his sponsors in media exposure (McIlroy's was $12.9 million). In addition, maybe Nike overpaid McIlroy to block any other competing golf firm to snatch him away.

However, equipment-wise, you rarely see the days when Jack Nicklaus' improbable 1986 Masters win caused golfers to rush to retail outlets and buy 30,000 ghastly MacGregor ZT 615 putters -- definitely a "putt for dough" scenario. Not even TaylorMade's leaders-leading R11 or PING's pink Bubba Watson drivers are have-to buys.

Know why? 'Cause most weekend warriors are learning it's the talented player who hits it 300-yards plus, not the club itself (which are also highly customized for Tour players' games).

Adams Golf (recently absorbed by Adidas) burst on the scene in the late 1990s by introducing the very playable Tight Lies hybrid club to help golfers struggling with long irons. It was an immediate hit for amateurs and pros alike and the company raked in millions. That is until the big competitors designed their own wonder clubs (its hardly difficult to mimic a club design) and supported it with comparatively bottomless marketing dollars to usurp Adams' revenue.

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