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Investments
9 Months Ended
Sep. 30, 2018
Investments, All Other Investments [Abstract]  
Investments
Note 9. Investments
Investment in Topgolf International, Inc.
The Company owns a minority interest of approximately 14.0% in Topgolf, the owner and operator of Topgolf entertainment centers, which ownership consists of common stock and various classes of preferred stock. In connection with this investment, the Company has a preferred partner agreement with Topgolf in which the Company has preferred signage rights, rights as the preferred supplier of golf products used or offered for use at Topgolf facilities at prices no less than those paid by the Company’s customers, preferred retail positioning in Topgolf retail stores, and other rights incidental to those listed above.
Topgolf is a privately held company, and as such, the common and preferred shares comprising the Company’s investment are illiquid and their fair value is not readily determinable. On January 1, 2018, the Company adopted ASU No. 2016-01, which requires equity securities without a readily determinable fair value to be measured at cost, less impairments if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Since the adoption of ASU 2016-01, there has been no observable transactions which would provide an estimate of fair value.
There were no additional investments during the three months ended September 30, 2018. During the nine months ended September 30, 2018, the Company invested $282,000 in shares of Topgolf, and during the three and nine months ended September 30, 2017, the Company invested $1,499,000 in shares of Topgolf. As of September 30, 2018 and December 31, 2017, the Company's total investment in Topgolf was $70,777,000 and $70,495,000, respectively.
The shares that were purchased during the nine months ended September 30, 2018 from other Topgolf shareholders were not acquired in orderly transactions as these transactions were not exposed to the market and were not subject to marketing activities. As such, at September 30, 2018, the Company accounted for its investment in Topgolf at cost less impairments in accordance with ASU No. 2016-01. As of September 30, 2018, the Company has not recorded any impairments with respect to this investment. If in the future there is an observable price change as a result of an orderly transaction for the identical or similar investment in Topgolf, the Company would be required to assess the fair value impact, if any, on each identified or similar class of Topgolf stock held by the Company, and write such stock up or down to its estimated fair value, which could have a significant effect on the Company's financial position and results of operations.
In December 2017, Topgolf completed a private placement led by Fidelity Management and Research Company (the "Fidelity Investment"), in which the Company invested $20,000,000 in series F preferred shares of Topgolf. Due to the nature and timing of this transaction, the Company determined that the carrying value of the series F preferred shares that it purchased in this private placement approximated the fair value for such series as of December 31, 2017. At the time, the Company was not able to estimate the fair value of its other series of Topgolf preferred stock or common stock due to the dissimilar nature of conversion rights, liquidation features and other preferred terms of these shares relative to the series F preferred shares. Accordingly, the Company accounted for this investment at cost in accordance with the accounting rules in effect at the time.