Special report: The LPGA’s chief
Monday, May 11, 2009
A storm brewed off the west coast of Florida in late October 2005. Hurricane Wilma threatened to interrupt the LPGA’s Tournament Owners Association meeting in Naples.
Little did the folks who own and stage the events know that they should have been bracing for Hurricane Carolyn.
In preparation for the meeting, new commissioner Carolyn Bivens discovered the LPGA was losing money on 70 percent of its tournaments, by her estimation. Events hardly compensated the tour for its support. She inherited unsigned contracts and different practices for different tournaments.
The revelation dumbfounded, if not alarmed, Bivens, a golf outsider whose executive grooming in Fortune 100 environs made her a creature of control and accountability.
Have the LPGA provide services at a deficit? Not an option. She moved quickly and unilaterally, bluntly telling tournament owners they’d need to pay for services rendered; in some cases, this raised fees from $15,000 to $100,000.
For Bivens, it was the righting of an obvious wrong.
Thank you very much.
Everyone stay dry.
The backlash was equally swift.
“I didn’t get a standing ovation,” Bivens says. “It didn’t take long to find out that things don’t change very quickly in the golf world, and they sure don’t change quietly.”
Bivens has been the proverbial bull in a china shop, crashing into more than her fair share of controversy since succeeding Ty Votaw in September 2005. She’s certainly not the gentle commissioner loved by all, like Charlie Mechem, another predecessor whom players affectionately called “Uncle Charlie.”
Bivens has been criticized, rightfully or wrongly, for a host of decisions: Severing ties with longtime sponsors in favor of new ones promising to pay bigger purses; battling media over control of image rights; and imposing an English-proficiency policy for the tour’s legion of international players.
No issue has eclipsed last summer’s ill-fated language mandate. Bivens took the step to make the tour and its players more marketable, but critics ripped her as being xenophobic, giving the LPGA a public-relations black eye of the worst kind. The uproar forced Bivens to rescind her edict.
“When she started,” says Herb Lotman, co-founder of the McDonald’s LPGA Championship, “she was, ‘Ready. Fire. Aim.’ ”
For all the Bivens bashing, the LPGA’s board of directors supports her unequivocally. (In June ’08, it extended her contract three years.) The directors say Bivens is one of the most misunderstood figures in golf, victimized mostly for setting a frenzied pace of change that has left many uncomfortable and bewildered.
But it’s a shakeup, they maintain, the LPGA desperately needed. They laud the commissioner’s business acumen and long-term vision for the tour – and respect her even more for exercising the discipline to do the painful, but necessary, tasks to achieve it. There’s no denying that higher sanctioning fees and revenue from various media deals are among the reasons the LPGA is in better financial shape. They say Bivens’ attributes outweigh her shortcomings, including a naiveté about the job’s many dimensions, its countless constituencies and its very public nature.
Although Bivens has been portrayed as cantankerous and unsympathetic, the directors insist she’s considerate to the core. After all, the woman who has been described as a pit-bull negotiator is the same person who invited LPGA founder Louise Suggs to her home for Thanksgiving dinner.
Meanwhile, Bivens maintains an unshakable belief that she can make the LPGA a model 21st-century sports organization. She already has landed a 10-year cable deal with Golf Channel – significant for giving the channel-surfing tour a permanent TV home. And there’s plenty more to do. Consider that for a business with revenues of $80 million and a global footprint, the LPGA offers a meager pension plan and no health benefits for its members. On May 2-3 at the Kingsmill Resort & Spa in Williamsburg, Va., Bivens unveiled the next phase of her strategic plan.
“It’s the culmination of where we have been and where we are going,” she says.
• • •
Given the capriciousness of sponsorship, a tour’s fortunes can rise and fall with the ingenuity of its commissioner. In January 2005, the LPGA formed a search committee to replace Votaw and tapped recruiting firm Heidrick & Struggles to help. To the continuing surprise of many, the LPGA never had hired a female commissioner.
“We were drowning in the same,” says Rae Evans, the search committee’s co-chair. “We needed to find a new way to grow the business.”
Bivens returned from lunch one day to find a message from an executive recruiter querying about the LPGA position. She laughed, thinking it was a joke. After all, her colleagues at USA Today printed a mock front page naming her commissioner of the fictional Senior LPGA Tour to
celebrate her 40th birthday.
Bivens hadn’t touched a club until she was 23 years old and noticed her male counterparts at Xerox forging deals on the course while she was stuck in the office. She spent a year learning to play before she stepped foot on a course. She loved it. She joined Congressional Country Club and later met her future husband at Pebble Beach. She spent 18 years at USA Today, rising to associate publisher, and used to say that LPGA commissioner Mechem was the only person with a better job. She left USA Today in 2000 to become president and COO of Initiative Media North America, a major media-services company.
Bivens initially passed on the LPGA job interview but reconsidered when told the tour coveted business leadership, not sports credentials.
The LPGA hired a woman who resists the temptation to accept the norm. The LPGA always has played in the shadow of the men. At many stops, the women use the more spacious men’s locker rooms, where pots of geraniums sometimes disguise the urinals. Bivens was appalled when she learned the disparity in pay between the two tours and takes the inequities personally. Getting the players what she thinks they deserve in the marketplace is her personal crusade.
But she has undermined herself with a recurring pattern, which critics sum up as right idea, wrong execution.
Bivens, however, doesn’t fret about hurt feelings. She understands it’s impossible to please everyone, and in her heart, she’s simply following marching orders from her bosses, the LPGA directors.
“The advantage I feel I was given coming to the LPGA was not having all the relationships, so when I looked at the P&L statements and when I looked at what needed to be done, I could make the decisions and recommendations based on data,” Bivens says.
But she also concedes her outsider status and singular focus accounted for missteps: “Because I didn’t know what I didn’t know.”
• • •
To understand the business of the LPGA, Bivens gathered her executive team in its boardroom in early 2006 and asked the staff: If the LPGA started from scratch, what would an ideal schedule look like?
That exercise became the foundation for her strategic plan, dubbed “Vision 2010.” Its top priority called for negotiating a TV deal that gave the LPGA a much-needed, consistent home. Historically, the LPGA jumped among channels, on network and cable, making it difficult to develop a fan following.
Gary Stevenson, a Wasserman Media Group executive and LPGA consultant, advised Bivens that the LPGA needed to secure a cable TV deal, which ultimately led to the Golf Channel partnership. Sources estimate the deal at $3 million to $4 million annually, depending on the tour’s ability to help sell advertising inventory.
“It’s Title IX,” Evans proclaims, comparing the TV agreement with the landmark federal legislation that fosters opportunities for women. “It’s an equalizer and a step so we are able to play and be found on TV and be appreciated the same way men’s sports have been.”
The next day, Bivens delivered again: The LPGA signed a five-year broadcast-rights contract with J Golf, granting the tour exclusive rights within South Korea. Bivens calls it “the tour’s richest deal ever,” reportedly to be in excess of $4 million annually.
Another important element of Bivens’ game plan is leveraging the LPGA brand. She plans to achieve this goal, in part, by owning a select group of tournaments that she can showcase in a manner she deems best. The tour assumed full control of the former season-ending ADT Championship in 2007. (Bivens plans to make this event the season-opener beginning in 2010, but it currently is sponsor-less.) In 2007, according to tax documents, it paid $2.3 million to acquire its developmental circuit, the Duramed Futures Tour, a move praised as long overdue.
The LPGA’s portfolio of assets grows next year: It’ll take possession of its own major, the LPGA Championship. Not even the PGA Tour can state that claim. The downside is the departure of its long-term partner, McDonald’s, which is ending its title sponsorship. Bivens envisions staging the event much like the PGA Tour’s Players Championship – without a title sponsor to emphasize the LPGA brand, but supported by presenting partners. Thus far, Bivens hasn’t recruited any, which raises questions about her pledge to boost the purse to $3 million.
Mechem offers perspective that only a commissioner can provide.
“I would’ve liked nothing more than to have done that, but I didn’t have the resources,” he says.
If run properly, the LPGA Championship could be a cash cow for the tour. But Bivens concedes its “high risk and high reward,” and the timing of her gamble has drawn criticism from naysayers.
Stevenson says critics are shortsighted. He recounts similar cries of doom when in 1990 the PGA Tour lost the title sponsor of its Tour Championship, RJR Nabisco, following the company’s leveraged buyout. But the Tour eventually turned the tournament loss-leader into the centerpiece of the FedEx Cup, which helped secure the Tour’s lucrative TV deal.
“You absolutely have to own a couple of your major championships,” Stevenson says, “so that you have some temples to build around.”
• • •
Bivens’ game plan for long-term prosperity may be spot on, but it has caused some serious short-term pain. When she signed Ginn as the title sponsor of two new LPGA events, she touted the developer as a new-era partner who could offer the big purses her players deserved. To the dismay of traditionalists, Bivens moved aside long-standing events to make room for Ginn on the LPGA calendar.
But when the real estate market bottomed out, Ginn foreclosed on its tournaments.
The economic forces that undermined her sponsors aren’t Bivens’ fault, but her push to elevate tournaments requires a financial model that might not be sustainable in today’s climate.
Tournaments, for example, will be expected to help pay for the higher production costs associated with the Golf Channel deal at a time when sponsorship revenue is dwindling. Critics say it’s a formula that contributed to the demise of the Corning Classic – which is calling it quits this month after 31 years on tour – and smaller charitable contributions.
It’s the main reason for McDonald’s departure. Twenty years ago, the LPGA Championship raised $2.5 million for Ronald McDonald houses. Now contributions are down 60 percent, Lotman bemoans.
Says veteran LPGA star Beth Daniel: “These companies and communities commit to us, and it’s hard to watch them go.”
Growth opportunities, however, exist for the LPGA abroad – and Bivens is pursuing them. Players will have to adjust to a globetrotting schedule with two excursions to Asia: a spring swing to Singapore and Thailand; and a fall trip to China, Japan and South Korea. Persistent rumors suggest India, Abu Dhabi and Dubai could be on next year’s schedule.
Is growth fueled by foreign finances good for the LPGA? Depends on whom you ask.
“The reason Muhammad Ali became a worldwide star is because of Zaire and Manila. If he hadn’t fought there, he would’ve been an American star,” Stevenson says. “The LPGA is one of the global properties that can play in 15 different countries in a season.”
The increase in limited-field, overseas tournaments, however, reduced playing opportunities for second-tier LPGA players. Some are worried.
Says Vicki Goetze-Ackerman, president of the LPGA board in 2007: “I’m 36, American, with a child, and I want to play in the U.S. That’s what I know, that’s what I want.”
Such concerns are intensifying scrutiny on Bivens’ dealings with U.S. tournaments. But she’s staying the course.
“What are the alternatives?” she asks. “I don’t mean that response to be flip. The LPGA brings a value to a local community. If we can’t cover our costs, maybe we’re not the right activity for that group or organization. Are we going to roll back service fees? The answer is ‘No.’ But we will be flexible.”
The LPGA permitted one event to move its scheduled fall date to next spring and will delay higher costs for electronic scoreboards until 2011.
That leaves Bivens six months to assemble a 2010 schedule. At the pro-am party for the J Golf Phoenix LPGA International, Bivens brushed shoulders with bigwigs from potential sponsors. She bowed to greet Seok Hyun Hong, president of J Golf’s parent company. The next day, after thanking the grounds crew for their tireless work, she sought out Hong.
“Elvis has left the building,” said Rob Neal, who runs the Phoenix event, drawing laughter.
“But Little Elvis is still here,” he said, referring to Hong’s son, the network’s chief strategy officer.
And with that, Bivens drove off in a golf cart. There were more deals to chase.