Indoor Golf Meets Proposed Legislation
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Hey Golfers —
A few weeks ago, United States Representatives Brian Fitzpatrick and Jimmy Panetta introduced the BIRDIE Act. Technically speaking, the duo are cosponsors of H.R. 7228, named “Bolstering Intellectual Rights against Digital Infringement Enhancement Act”.
The BIRDIE Act sounds like a better name. At its core, the BIRDIE Act proposes to extend copyright protection to golf courses.
There is a long history of Copyright law in the United States, but it generally hasn’t protected golf courses. In the mid-1990s, Pebble Beach and Pinehurst sued Tour 18, an 18-hole golf course in Humble, Texas, with replica golf holes. Tour 18 won the lawsuit.
But that was nearly thirty years ago. A lot has changed in the golf industry, most notably indoor golf. And that is exactly what the BIRDIE Act is targeting — golf simulators.
The golf simulator industry is booming. Over 6 million golfers played golf on a simulator in the United States last year. According to NGF, off-course golfers totaled 18.5 million last year, an increase of 19% versus 2022.
Two off-course golf companies recently announced several new locations.
Dryvebox — 10 new locations
Five Iron Golf — 5 new locations
I’ve shared a similar chart below. It highlights the explosion of golf simulator growth.
The above chart shows the worldwide trend for the search term “golf simulator near me” from 2004 to the present.
Here are the last five years.
2019 — 30
2020 — 34
2021 — 66
2022 — 85
2023 — 100
Search interest has tripled since 2019. The United States has the highest region of interest, followed by Canada and the United Kingdom.
Point being — the golf simulator business is doing exceptionally well. And lawmakers want to protect golf courses. And I will note that the sponsors of the BIRDIE Act are bipartisan.
Golf simulators typically pay a royalty to golf courses to add their golf course to its library. If a location has three simulators — they would have three separate licenses and pay three sets of royalties to the golf course.
This isn’t an issue. The issue is when golf simulators create a golf course and use a different name to skirt the royalty fee. A hypothetical example of this would be a simulator company creating a Pebble Beach replica and calling it ‘Monterey Links’.
For some golf courses — the loss of revenue from simulator royalties is material. EA Sports was rumored to pay tens of millions for exclusive rights to Augusta National.
If a simulator company were to create an Augusta National replica under a different name — this would violate the proposed BIRDIE Act.
I chatted with the CEO of a golf simulator company to better understand the impact on the industry. Here is what he said.
The BIRDIE Act won’t impact our company. We pay royalties and do not have counterfit golf courses in our library. We have built our own golf courses and added them to our library.
If a simulator company has replica courses in its library under a different name — the BIRDIE Act could impact them.
It boils down to the fact that a golf simulator company must pay royalties to a golf course to be featured in its library. Replica golf courses have the potential to violate the proposed BIRDIE Act.
The same CEO told me the BIRDIE Act will have a material impact on smaller golf resorts and courses, as royalties will go straight to the bottom line.
This begs the question. Is there a market for virtual golf course designers? If a golf simulator company designed the best virtual golf course and had exclusive rights, would it increase the organization's value?
I believe it would. But it needs to have a viral effect built into it to happen.
It will be interesting to see how this unfolds. I generally don’t see this having a negative long-term impact on the golf industry.
The only scenario in which I can see a negative outcome is one in which a golf simulator company will need to pay a material amount of royalties it hasn’t in the past, which will impact its bottom line and, ultimately, its valuation.
Have yourself a great Monday. Talk to you next week!
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This is really interesting stuff today, Jared.
You briefly touched on the replica course case, but I am much more curious what you would think about someone replicating how Lido was just (re-)built up in WI.
Specifically, bulldozers and graders and other earthmovers have the ability to locate themselves using GPS, indeed even locate each corner of their blades and buckets to accuracy within an 1" or so. The Lido was built using a topographic map that was painstakingly recreated in a golf game, and then that topo map was fed into those bulldozers to carve out the same fairways, same greens, and so on on the property there in WI. Dozers and graders are easy enough to use today that it does not take a super experienced operator in them anymore; just load that topo map into the machine's systems and then drive back and forth until the final state is reached as the blades adjust themselves automatically to match the desired topo.
Is topography copyrightable? Would the BIRDIE act make it so? I.e., if I bought a tract of farmland in Iowa and bulldozed it enough to create the same hills as Augusta, would that violate a copyright? And then, what about if I did the same with St. Andrews, that famously didn't really move any earth and Old Tom Morris just put the holes down? If they didn't shape the land, is that topography copyrightable?
There is a clear analogy between the creative work needed to accomplish golf course design & architecture and artistry or writing. One cannot copy PIcasso's The Guitarist or this newsletter and claim it as their own work.
One more complication. golf has a long history of the template hole as well, right? Would someone now own the idea if a Redan hole? How Redan-y would cross such a threshold? Because lots of holes have say, bunkers guarding the front without being a true classical Redan, right? Some metric would have to be defined as when a copy becomes too much like the original, which would probably need to be more than Justice Stewart's "I know it when I see it".
Having worked in a technical field some, patent law is similar, though not exactly the same as copyright. For patents, if you can claim something not explicitly covered by a previous claim, then you can claim a completely separate invention. This is why it is exceptionally rare for chemical processes to be patented, for example. If company Z invents a process to create a new plastic, if they patent it, they have to disclose all the chemistry needed to get to the final product. A competitor can then read that, and if they can make one change, like swapping out a step that requires propyl alcohol with iso-propyl alcohol, in the eyes of patent law that is now a completely different process. So companies do not publish these at all and accepts that if someone else can reverse engineer it and create the same result, that is less of a risk than publishing everything on how you did in the first place.
I wrote all that because then the question is: well, if I copy Augusta on my Iowa farm tract, BUT I add a extra bunker on #1 off to the side -- are we now different? I can even embellish the story and say that I added that bunker because that was right where my friend Greg would miss off the tee on #1 when he wasn't warmed up yet, so it is clearly a completely unique design now. If 1 bunker isn't enough to be different enough, how about if I add that same bunker to all 18? The course is undeniably Augusta, just with one extra bunker... or one fewer bunker. I.e. there is an almost infinite number of ways to change it at least somewhat, even if it is just like the student poring over the thesaurus to change just enough words in the essay they copied to try to get it past the plagiarism checkers.
Whelp, I didn't set out to write a comment 10 paragraphs long when I started this comment, but I think it is a really complicated space today between easier accessibility of topo maps, computers to manipulate them, and machinery that can straightforwardly recreate most any topo inputted.
A very interesting area, thanks Jared. As you say, unlikely to have an immediate impact on the industry where everyone is paying to licence the courses anyway.
I suppose there is scope for simulator-only courses, that maybe have designs impossible to create in real life. Certain courses from the TW video game spring to mind. But I imagine most people would want to play the courses they know and see on TV.
R Hamilton, it's an intriguing grey area. As you note, surely not realistic to licence topography. And if it is built on different soil, with a different climate, and different prevailing winds etc. it is hard to see how the Green Jackets could bring much of a case. I suppose if you were holding it out as an AN replica, or somehow trading on their goodwill, you could get into a bit of bother.
I do enjoy the idea of Greg's Bunker as a distinguishing feature. It would be nigh on impossible to identify when a course had strayed into copycat territory rather than mere homage. And if you were to introduce a feature that (God forbid) improved on a hole at AN, would the Masters be entitled to 'borrow' that feature back to the original?!