How to Make Golf Sponsorship Work

In recent days, the PGA Tour has announced its 2009 Fall Series schedule. Currently, it is missing two events from last season due to the departure of the Ginn sur Mer Classic and the move of the Valero Texas Open to the new Texas Swing in May.

The first real gap on the PGA Tour schedule in several years has caused the media community to go on the offensive about the Tour's woes. Lorne Rubenstein, Dave Seanor, and Gary Van Sickle have all penned pieces talking about how the Tour needs to not lose sight of rank and file golfers.

Most talk about how the Tour and its best players shield themselves from criticism under the moniker of the "independent contractor" relationship that the players have with the Tour. Others have discussed the need to revamp the 15-tournament floor to keep a Tour card. Some others have attacked problems with the Tour's scheduling and purses that have been known for years. Across the board, the writers really are saying nothing new in the criticisms they are levying. Rather, they're recycling old material in light of new particulars to the problems.

It is true that the PGA Tour is facing sponsorship issues. With many tournament sponsorships agreements ending this year and next (along with the LPGA Tour on a much more staggering scale), the PGA Tour faces a difficult environment in which to negotiate new deals.

Considering the 40% drop in the stock market this year, skyrocketing unemployment, and somewhere in the area of $5 trillion in bailout lending, the PGA Tour can be assured of a tough go at retaining all of its sponsors and tournaments. Many of the companies that are in the cauldron of this crisis are sponsors of the Tour in a big time way. General Motors is a prime example, but the Tour is also heavily leveraged in the financial sector. It is no secret where that industry is. Ginn's removal from the schedule is no shock. It would have been a bigger deal had they remained.

Still, the Tour has a track record of pulling a rabbit out of the hat. The Tour negotiated its way through the miniature recession following the September 11, 2001 terrorist attacks. In fact, the Tour managed to grow amidst that crisis.

In economic terms, though, this recession is different. It will clearly last longer – maybe two years or more – and is on a much larger scale. The contagion and its impacts are felt more globally than what followed 9/11. The amount of merger, acquisition, and bankruptcy activity is much higher.

The Tour also must renegotiate in a period of increased competition. The Race to Dubai on the European Tour has lured some of its higher profile players to more starts in Europe this season. Their schedule features 11 TBAs, has already cancelled a tournament, and is now playing for the same pool of multinational corporations that could sponsor their events as the PGA Tour.

There is no question that the PGA Tour faces a sponsorship environment unlike anything it has seen in its history. That said, the same old criticisms may not be the right ones to levy and address when trying to ensure the health of the Tour into the future. Still others are part of the problem that must be solved.

In a message delivered from Commissioner Tim Finchem to players and their agents, he pleaded with players to add extra tournaments to their schedule for the '09 year. Given that they are only compelled to play a minimum of 15 events each year, players are not required to comply with Finchem's request. The aim, though, is to give a boost to struggling tournaments by giving them a deeper, more attractive field.

Why not, instead, institute the PGA Tour version of the LPGA Tour's rule that requires players to start in each event at least once every four years or face a fine?

That solution may backfire on the Tour, which is why they resist implementing it. The biggest events — and generally with it, the biggest sponsors — get the best players consistently. If the Tour were to implement this rule, players would not consistently show up at certain stops. It would reduce the value of sponsorship to these high-end sponsors because they would not be guaranteed the Tigers and Phils of golf each season. Also, Tiger and Phil specifically would balk at the proposal and likely consider European Tour membership because of its lax minimums and policy on appearance fees.

At the same time, the Tour risks further alienation of its "second Tour" — the events in which Tiger and the best do not routinely play — by not doing something to promote a more egalitarian schedule that benefits the fans and sponsors.

The solution may be an implementation of the "one in four" rule, but with a kickback to sponsors that suffer as a result of the rule. Northern Trust would be thrilled if Tiger had to play Riviera once every four years (and still stayed on Tour). Wells Fargo, new owner of Wachovia, would be angry. The Tour would have to be willing to reduce the sponsorship cost or provide additional perks, like free ad time, to balance out the cost of not having the same atmosphere in the corporate tents. It would take several years of this practice before sponsors would be accustomed to the notion of this kind of PGA Tour.

For those that would complain that the PGA Tour players would rebel against such a requirement, I only need tell you that the PGA Tour (largely thanks to Tiger Woods) made 104 players into instant millionaires this season. They'll take their orders with a smile so long as they are being paid handsomely.

The Tour can really only pick one option between implementing a one in four rule or increasing the minimum number of tournaments for players. Finchem simply cannot increase the minimum number of events required on the schedule. Given the European Tour's easy-to-attain minimum of 12 events, the PGA Tour's minimum of 15 seems ridiculous by comparison.

Also, if one takes a look at the PGA Tour money list over the past five years, the complaints of shorter player schedules is unwarranted. Tiger Woods, Paddy Harrington, and Ernie Els were the only players among the top 30 on the money list to have fewer than 19 starts on Tour in 2008. Justin Rose was a part of the trio in 2007. For the most part, the best players start 20 or more times on Tour each year. That is a reasonable number of events for a top tier player. If the Tour were to increase the minimum, it would likely backfire into a very predictable balancing act of major championships and co-sanctioned events that would satisfy the requirements of both the PGA and European Tours.

Really, this is the heart of the whole problem for the PGA Tour. There may be many causes — too much money available too far down the money list, way too many limited-field events billed as spectaculars, and a clear-cut second-tier part of the schedule — but the problem is getting players to play more often.

The problem with the problem is how the Tour tries to solve it. It tries to do so by creating these limited field events with big purses and by throwing money at the top tier players through the FedEx Cup Playoffs. The Tour hypothesizes that players are driven solely by money (which isn't a bad assumption per se), and that the best way to compel the best to play more often is give them almost no chance to miss a cut and make a big chunk of change if they have a crappy week. The idea of the guaranteed paycheck is very appealing, but since the Tour does not allow for blatant appearance fees, it tries to do the next best thing.

The Tour's solution creates the subsequent problems that are now being shoved back in their face. Perhaps in lieu of that, the Tour should simply allow appearance fees. The reality is that the PGA Tour is a federation of events that compete with each other. Outside of the four majors, the Players, and the WGCs, each event has to compete with the other for the attention of the players.

Certainly there are characteristics of each event that compel players to get onboard — the course, the locale, the fans, and how much they are kissed up to by the tournament and its sponsors, i.e., ego stroking. The thing is, though, that the Tour's assumption about throwing money at players is a pretty good one. If players have a guaranteed pay day, they tend to show up in droves. Instead of creating events with no cuts and limited fields that really create a narrow focus on players, why not just give them the money up front and unleash them on a full field?

This solves multiple problems. First, it allows for tournaments and their sponsors to dictate how much they want any player in a particular year. Combined with the "one in four"-styled rule, sponsors could compete in a marketplace to lure in players that are looking to round out their schedules. If the John Deere Classic wants Phil Mickelson, then they should bid for him accordingly.

Second, this creates additional playing opportunities for the bottom end of the rank-and-file. While I have very little sympathy for the mid-range players that earn north of $1 million for mediocre play, there are those at the lower end of the priority scale that really struggle to make it on Tour because of the number of limited field events. By creating a marketplace for top tier talent and opening up to more full field events, these guys could have a better chance of competing for their card each year.

It would also eliminate the need for guaranteed pay day events that really exaggerate the glass ceiling between the top tier and the bottom tiers. There is a clear division on Tour between the classes of players and how they are treated among their peers, by fans, and the media. By creating a more equal billing on the course, it will likely pay dividends for the entire Tour. There are a lot of interesting guys on Tour — even if they are brainwashed to be dull on course — and exposing fans and media to these players will grow the pie, so to speak.

So, the solution to the sponsor bind that the Tour faces is pretty easy: (1) institute a "one in four"-styled rule to mandate participation across the schedule and (2) allow for appearance fees to create a real marketplace for superstars. The coupled solution will work out better for sponsors, players, and fans. Certainly, there are side effects to particular tournaments and they will suffer for a time.

Regardless, it is in the best interest of the Tour, though, to create a more level playing field for all tournaments. Then, it would simply be the job of the Tour to forge relationships with sponsors. After that, it could then be the middleman between the players and the tournaments that want most to have the best fields.

If the Tour lets the market decide, then it may be able to flourish in a difficult time.

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