Ely Callaway, Golf Club Innovator, Vintner, Dies

TIMES STAFF WRITER

Ely Callaway, a feisty, daring former textiles executive and vintner who revolutionized golf for pros and duffers alike with oversized metal clubs and in the process built an $840-million company while in his 70s, died Thursday. He was 82.

Callaway, whose Big Bertha driver quickly became a staple in golfers' bags after its debut a decade ago, succumbed to pancreatic cancer at his home in Rancho Santa Fe surrounded by family.

The cancer was found when Callaway underwent gallbladder surgery April 23. A few weeks later, he retired as Callaway Golf Co.'s chief executive but had remained chairman of the board.

Golfing icon Arnold Palmer called Callaway's development of the oversized drivers "one of the most important things that ever happened in the game."

"The fact is, 90% of all golfers are struggling to play," said Palmer, who has a lengthy endorsement deal with Callaway. "His whole idea was to give them an opportunity to enjoy the game a little more."

Tim Finchman, tour commissioner of the Professional Golfers' Assn., said interest in golf among new players was heightened by Callaway's many outstanding contributions.

"Ely's genius, as demonstrated through his development of innovative golf equipment and unique marketing strategies, has clearly helped propel golf to new heights over the past 20 years," Finchman said in a statement Thursday.

Aided by his honed sales skills and a flair for promotion, Callaway was successful in all of his careers, which ranged from president of a global textile manufacturer to founder of one of the first respected wineries in Temecula Valley to head of a golf equipment maker that bears his name.

A "natural huckster," as Forbes magazine once called him, Callaway also refused to buckle under to convention--some called it just plain stubbornness--and he had a keen eye for innovative products that consumers suddenly realized they couldn't live without.

He also had a wry sense of humor. Explaining how he could tell his friends from his acquaintances, Callaway once said friends correctly called him "Ee-lee," whereas acquaintances said "Ee-lie."

Liked to Prove People Wrong

Callaway was uncompromising, pugnacious, blunt and complicated. Married four times, he was naturally charming but did not suffer fools gladly. He lashed out at golf's "elite" when its ruling bodies impeded his company's progress, but he lived in upper-crust social circles available only to the relative few with immense wealth. His Callaway Golf office, though, was unpretentious, and the company did not have an executive dining room.

And though Callaway gave away more than $15 million to various causes throughout his life, he denied requests for free golf clubs for raffles, auctions or club prizes. His reason: Once word got out that clubs were available, "we'd literally have to give away everything we make," he once said. "And we'd go broke."

Callaway also was quick to credit those around him for his companies' successes, yet he put his own name on his products. Why? "It makes you try hard because you've got more at stake," he once said.

Another time a reporter asked him how he reacted when people said, "You can't do that," when he set out on a new venture. Callaway replied: "I like people to say that, so I can prove them wrong. I'm a contrarian."

That was perhaps most evident in golf. After his stints in textiles and wine, Callaway--who had been a moderately good golfer early in adulthood--turned the sport and the $2-billion U.S. club business on their ears in 1991, when his company introduced the Big Bertha.

Named after a giant cannon in World War I, the new club sported a metal oversized head capable of launching balls much farther off the tee than traditional wood drivers. Plus, golfers seemed to find the Big Bertha more forgiving when they made poor swings at the ball.

Despite costing more than $200 apiece, the clubs were a sensation. Professionals and weekend players swore by them. Movie stars owned them; so did former Presidents Bush and Clinton. Sales skyrocketed as word of mouth spread about how much longer and straighter Callaway's clubs could hit the ball.

Professional golfers made the equipment of Callaway Golf one of the most popular clubs of choice. This was especially true for the players on the Senior PGA Tour and the LPGA Tour, in which the players are not known for their driving distance and achieving greater length off the tee takes on greater importance.

In 1992, a year after the club was introduced, Callaway Golf's initial sale of stock to the public was front-page news on Wall Street and added millions of dollars to the wealth Callaway had accumulated. (The stock's ticker symbol is ELY.)

On Thursday, the company's stock jumped 96 cents a share to $17.21 on the New York Stock Exchange amid market speculation that Callaway's death might lead to a takeover offering being made for the company.

By setting up his company's headquarters in Carlsbad, Calif., Callaway also turned that coastal town into what's now known as Titanium Valley, because many of Callaway's rivals--which, like Callaway, also use titanium in many of their clubs--have moved there.

But as Callaway Golf grew, its founder kept challenging golf's long-held equipment rules with other unconventional clubs, which often ruffled golf's establishment. Worse, in the last three years the flood of Callaway competitors has saturated the market with newfangled gear for America's 26 million golfers at the same time world economies have been limping, badly damaging Callaway's firm.

Ely Reeves Callaway Jr. was born in LaGrange, Ga., on June 3, 1919, and his father was an executive in the family textiles business. Despite the Great Depression, the younger Callaway was among the privileged and learned golf at an early age. He also worshiped a distant cousin, the great golfer Bobby Jones, from afar.

After graduating from Emory University in 1940, at age 21 he joined the Army and became one of its top procurement officers, acquiring textiles and clothing for uniforms during World War II. After the war, he worked for a large textiles company now known as Milliken & Co., and in 1954 he joined a Textron Inc. division that soon became part of Burlington Industries, the giant textiles concern.

Callaway ultimately spent five years as president of Burlington, but was never tapped to be its chief executive. So he left in 1973, deciding to try his hand at making wine in Southern California.

He set up his 150-acre vineyard in Temecula, a location that some experts said was unsuitable for fine wine. Callaway was unmoved. When the grapes do grow, he contended, the wine will taste different and thus be guaranteed to attract attention.

He was right. Within four years, Callaway's wines--which also drew publicity from the fact that they were marketed by an all-female sales force--were getting good reviews. The wines were stocked at the Four Seasons and Ma Maison and were chosen for Queen Elizabeth's bicentennial luncheon at the Waldorf-Astoria in New York in 1976.

Never Intended to Retire

Callaway sold his winery in 1981 to Hiram Walker & Sons for $14 million, about $9 million of that profit, and shortly thereafter stopped in a golf shop in Temecula that sold unique hickory-shafted clubs. Callaway was so taken by the clubs that he bought the business for $400,000. He was in his early 60s.

Soon those clubs took a back seat to Callaway's development of the Big Bertha over the next few years, an effort led by industrial designer Dick Helmstetter, who was in Japan designing cue sticks when Callaway hired him in 1985. After its initial success, the golf world was stunned to realize that a man who had been growing wine grapes for a living was now radically changing its game.

Callaway once said he never intended to retire. "I like the creative force--to create a new product, where you're creating jobs and opportunities and products people have never had before."

"That's exciting to me, much more than traveling or anything else" one might do in retirement, he said. (Callaway Golf has about 2,500 employees worldwide.) But at times Callaway also acknowledged that he was too often married to his work, which helped explain his numerous wives.

Big Bertha was just the start. Throughout the 1990s, Callaway Golf rolled out a variety of clubs--both drivers and irons--using technologies that included graphite shafts and other exotic metals. And Callaway's competitors tried to match its success with their own versions of the oversized clubs.

Callaway Golf held its own for most of the decade, and by 1997 its sales had surged to $843 million. But the next year, Callaway's company ran into major problems that forced him to use all of his business savvy even as he was becoming an octogenarian.

In Asia, where Callaway Golf was enjoying much of its growth, an economic collapse hammered the company's sales. The U.S. market wasn't doing much better; golf equipment sales had become flat, and the number of Americans taking up the game wasn't growing. Callaway Golf's sales drooped.

At the same time, the U.S. Golf Assn.--the game's governing body and rules arbiter--said it was mulling over whether to "outlaw" some or all of the big drivers made by Callaway Golf and its rivals.

The USGA, which had to back away from its intention to ban clubs that were already in the marketplace, nonetheless placed restrictions on modern technology in 1998 by writing a page in the rule book banning clubs with a so-called spring-like effect.

Ever the contrarian, Callaway introduced a driver that exceeded the USGA's limitations and then marketed the club in the U.S. last October. The club, the ERC II Driver (the initials are Callaway's), fueled another huge controversy that is ongoing. And because many golf shops won't stock an "illegal" club, Callaway Golf last month said its sales and profit were under pressure yet again.

It was Callaway's last battle against conventional wisdom.

The controversies raised the prospect that touring professionals, many of whom help advertise Callaway's clubs by playing them, might have to stop using the equipment. And though the USGA rules are voluntary for amateurs, millions of such players heed the rules.

When the USGA was considering banning oversized clubs, Callaway Golf itself was in danger of being outlawed, and Callaway was livid. In his typical fashion, he ran full-page newspaper ads accusing USGA insiders who supported the ban of "elitism" and of acting "without regard for the interests of millions of golfers who will be affected." He said the USGA risked disenfranchising golfers who had several hundred dollars or more invested in the clubs.

Whether Callaway's plea made the difference or not, the USGA never acted on clubs already in use. And in the last two years, his company has begun to recover financially. But it's still struggling--sales last year, at $840 million, are back only at their 1997 level, and Callaway Golf's stock is trading for less than half what it fetched in 1996.

Callaway is survived by two sons, Reeves and Nicholas; a daughter, Lisa; and four grandchildren. A private service will be held in Callaway Gardens, Ga., next week, followed by a memorial service July 24 at company headquarters in Carlsbad.

Donations in his memory may be made to the Callaway Golf Co. Foundation or the San Diego Hospice.

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Times staff writer Thomas Bonk contributed to this report.

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