May 14, 2015 - We recently posted a blog discussing the downward trend in people playing golf in today’s economy. In that blog we mentioned that The New York Times claimed that high-end business deals are trending away from being made on the golf, and toward being on high-end bicycles.
According to Business Insider, golf “still commands the highest portion of participants with household incomes above $100,000 among popular sports”, its popularity is decreasing and golf course closures have been on the rise over the past eight years.
In its article (http://www.businessinsider.com/cycling-is-the-new-golf-2015-2) Business Insider interviewed Max Levchin (cofounder of PayPal, sold Slide to Google for $228 million, sits on the boards of Yahoo and Yelp…) and what he had to say regarding this topic was compelling. Levchin stated “there are lots of successful companies with younger executives. The sport of choice where deals are made and ideas are thrown around and relationships forged is definitely traditionally golf. That’s where you don’t have to sweat, you just walk around with people you like, and occasionally pretend like you’re doing something physical… the current generation of young executives are not particularly interested in walking around slowly. They want to do something physical, especially outdoors. There’s also the combination of quantified and social, and – for better or worse- the showing off of the equipment, which for cyclists is basically road jewelry. For golfers, it’s about having clubs of some special alloy, its’ definitely very out of fashion to have an amazing house to show off. The real estate showiness is fading, and showing off your fitness and your fitness equipment is increasing”.
According to USA Cycling, the number of people taking out a USA cycling membership (or a “cycling license” for use in sanctioned events) has increased 76% from 2002-2013. This can be an indicator of how popular cycling has become in the US. But what about the “road jewelry” that Levchin discusses?
The cost of some high-end bicycles can be between $10,000 and $20,000 with all the bells and whistles. Despite this high cost of entry being greater than the cost of a set of golf clubs, it seems that the cycling trend will continue to increase. Not only is cycling a better way to stay in shape, can be less time consuming and relatively less expensive once you have the gear. Once you invest in the fancy bike, you don’t need a fancy country club to ride (like you do with the golf clubs). Additionally, a large appeal to the cycling crowd is the open road.
For a company like Blackbird Auctions, this trend will provide auction opportunities to sell not only equipment at auction, but also hold real estate auctions for courses that need to be repurposed. As for the high end bicycles that will trade- I would keep an eye on ebay and craigslist. These cyclists are often looking for the next best thing to improve their game. Just like golfers.