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Curated by: Michael Girdley (121 videos)
Big shoutout to today's sponsor, Emergent: https://app.emergent.sh/?via=michael-girdley One of the coolest AI tools I've seen for business owners/operators. You can literally describe the app or dashboard you want in plain English and it builds the frontend, backend, database, auth system, everything for you. If you've ever wanted a custom dashboard for your business without hiring a dev team, definitely check them out! In 2019, Topgolf had 63 venues, $1.2 billion in revenue, and was weeks away from a $4 billion IPO. By January 2026, the entire business sold to private equity for $1.1 billion — less than half what Callaway paid for it five years earlier. This is the story of how one of the most exciting concepts in entertainment got crushed by debt, rising interest rates, and a flywheel thesis that never worked. Get the 2-minute cheat sheet for this video → https://girdley.com/youtube 👇 SUBSCRIBE for more business breakdowns https://www.youtube.com/@Michael-Girdley?sub_confirmation=1 ------------------------------------------------------------------ ► Get my weekly letter to business owners: essential insights to run, grow, and stay ahead in your business → https://links.girdley.com/newsletter-yt ► For sponsorships or inquiries please reach out to: Contact@girdley.com ► Do you have a hat I should wear in a video? Send it to us: Contact@girdley.com ► Free events on all things small business: https://links.girdley.com/lectures-yt ► Deep dives on businesses for sale: https://www.youtube.com/@AcquisitionsAnonymousPodcast ► Follow me on Twitter/X: https://x.com/girdley ------------------------------------------------------------------ Topgolf started in 1997 in the UK when two brothers — mystery shoppers by trade — went to a driving range, got bored, and decided to turn it into a game. They wired golf balls with RFID chips, kept score, added lights and screens, and called it Target Oriented Practice Golf. The first US venue opened in Dallas, Texas in 2007, and it was immediately a phenomenon: six-hour wait times, a three-level facility with dancing lights and video games. What they had actually built wasn't a golf improvement tool. It was a nightclub with golf clubs. Sixty percent of customers had never played golf before. Nearly 40% of revenue came from food and beverage. A traditional driving range might earn $20,000 to $40,000 per bay per year. A Topgolf venue was pulling $150,000 to $200,000 per bay. By 2019, the business looked unstoppable — 63 venues, $1.2 billion in revenue, and serious IPO momentum. Then COVID shut everything down. But here's the twist: COVID didn't hurt Topgolf. It made the whole chain look extraordinary. When restrictions lifted in May 2020, people flooded back outdoors and Topgolf was one of the few entertainment options available. Participation in the category grew 41% from 2019 to 2025. The cancelled IPO created an opening for Callaway Golf, which had been invested since 2006 and had a CEO who had spent 12 years on Topgolf's board. In an all-stock deal, Callaway acquired Topgolf for approximately $2.6 billion in March 2021, also assuming over half a billion dollars in debt. The acquisition thesis was a flywheel: people go to Topgolf, get exposed to golf, see Callaway products, buy Callaway clubs, and come back to Topgolf. CEO Chip Brewer called Topgolf the best thing to happen to golf since Tiger Woods. The problem was that the flywheel never materialized. Real golfers didn't want to go to Topgolf. And the people who came to Topgolf didn't become golfers — and certainly didn't start buying $700 Callaway drivers. What looked like a permanent generational shift turned out to be a COVID bump. The same pattern played out at Peloton: don't confuse temporary tailwinds for a permanent structural change. The collapse came from several forces hitting at once. Topgolf had funded expansion through sale-leaseback deals with REITs, betting on near-zero rates. When the Fed raised rates from 2022 onward, venue economics deteriorated. Same-store sales fell 3%, then 9%, then 12% year over year as the COVID fad faded, corporate events dried up, and price increases pushed out middle-income families. Competitors poured in: Popstroke, Bolero, F1 entertainment, indoor simulators — all chasing the same dollar. By late 2024, Callaway Topgolf stock was down 71% from its high. The company posted a $1.4 billion goodwill writedown and a $1.5 billion net loss on $4 billion in revenue. In January 2026, Callaway sold Topgolf to Leonard Green & Partners for $1.1 billion — roughly half what it paid five years earlier. Callaway received $770 million and used the cash to pay down debt. The hidden winner may be Toptracer, the ball-tracking software acquired in 2016, now deployed at over 10,000 venues worldwide — a high-margin software business with no land, no kitchens, and no construction costs. Exactly the kind of asset that didn't need a flywheel.