The Golden hug: Golf legend and Palm Beach resident Jack Nicklaus has now endorsed so many products that the good life can be completely encompassed by his brand - Sports

South Florida CEO, June, 2002 by Brian J. O'Connor

WHEN THE RITZ-CARLTON GOLF Club & Spa opens this fall in Jupiter, a resident of the new country club community will be able o on the Jack Nicklaus-designed golf course from a home furnished with Nicklaus Collection furniture and walls hung with Nicklaus-licensed artwork of the olden Bear himself. When a Nicklaus-endorsed Rolex watch signals that tee time is near, he can slather on Nicklaus Sun Care sunblock, don a Nicklaus Sportswear shirt, throw Golden Bear golf clubs into a Jack Nicklaus Signature golf cart and hope his nasty slice has been cured by lessons at a Nicklaus Game Improvement school.

If not, he can use his Nicklaus Citibank Card to charge his prescription for Altace, a Golden Bear-endorsed hypertension drug.

Long considered the game's greatest golfer, Jack Nicklaus is now becoming one of the world's greatest brands. His North Palm Beach-based Nicklaus Companies has rolled endorsements, licensing and golf course design into a family-owned and operated global enterprise that puts the Nicklaus name on everything from golf clubs for kids to computer software that helps design and maintain championship courses.

"Sales of Nicklaus products around the world are around $220 million," claims Andy O'Brien, vice president of marketing for the privately held Nicklaus Companies. The firm's 2001 revenue for licensing and marketing is estimated at $7 million to $10 million by one industry newsletter. In addition, a 50-percent stake in West Palm Beach-based Nicklaus Golf Equipment produces $20 million to $30 million in annual sales, O'Brien says.

But the main focus of the business is golf course design. Nicklaus commands the highest fee of any golf course designer -- up to $2 million per course for his personal touch. Other work by the 40-person Nicklaus Design firm, which includes courses created by his sons and other associates, starts as low as $425,000 for a course that still carries the Nicklaus name. This year, Nicklaus expects to complete work on the firm's 250th course, with some 30 more under construction.

Although the courses garner top ratings, the reason for his popularity among golf community developers is simple: In a business where developing a new country club community can cost up to $50 million, the Nicklaus name sells homes. "There's nothing magical about Jack's courses," notes Ron Whitten, architecture editor of Golf Digest magazine. "[But] if a developer hires him and can sell out his home lots six months earlier because the wives of the buyers recognize the Jack Nicklaus name, then it's money well spent."

The Nicklaus brand also benefits from the man's demographic position as the Tiger Woods of the Baby Boom generation. "The 70 million people turning 55 in the next 10 years are driving a lot of our business here in Florida," observes Tim Kenny, senior vice president of business development for Nicklaus. Adds O'Brien, "People who identify with Jack Nicklaus are an extremely attractive demographic. These people are coming into the age of buying expensive homes on golf courses, or an expensive golf shirt or equipment."

One place where the Nicklaus brand didn't translate into success was with publicly traded Golden Bear Golf, which raised $36 million in its 1996 initial public offering. The company operated golf schools, product licensing and golf course construction firm Paragon Construction International.

After hitting a high of $22.50, the stock slid to $1.50 in late 1998, after Golden Bear announced that 1997 losses had been understated by more than $21 million. Eventually, the Nicklaus family bought back the 8 percent of shares it did not control, taking an estimated $40 million paper loss from the IPO price.

"It was an expensive lesson for him to learn," O'Brien says today. "[But] I don't think Jack cares about the money. I think he's more worried about his family's name."

At 62, it's a name now worth more as a golf course brand than as a name in golf itself. With one artificial hip and a bad back, Nicklaus went from earning more than $600,000 on the PGA and Senior PGA tours in 1995 to less than $25,000 in 1999. "Even though Jack is past his prime as a player, he's still in his prime as a golf course architect," Whitten observes. "His name still attracts attention."