Tournament sponsors go incognito

Tournament sponsors go incognito

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Tournament sponsors go incognito

By ALEX MICELI
Senior Writer

Title sponsorship on the PGA Tour is no game for the meek these days.

Wells Fargo, which inherited a stake in the Wachovia Championship by acquiring the Charlotte, N.C.-based bank last year, will distance itself from the annual Tour event. The Quail Hollow Championship has adopted the host club’s name for the April 30-May 3 event.

The move follows public criticism and congressional scrutiny of Northern Trust, a Chicago bank and title sponsor of the annual stop at Los Angeles. Last week, revelations that Northern Trust – recipient of nearly $1.6 billion in federal bailout money – entertained patrons lavishly was met with outrage by Congress. Wells Fargo backed away from the Charlotte event and, a source close to Wells Fargo told Golfweek, could be interested in buying out its contract.

“Wachovia has a contract with the PGA Tour to sponsor the Wachovia Championship through 2014, and we take our contractual obligations very seriously,” Wells Fargo said in a statement. “Wells Fargo is evaluating all of our sponsorship agreements to understand what is most appropriate for our company and communities in this environment.”

Tour commissioner Tim Finchem said he had “no indication from Wells that there’s any change.”

Since Wells Fargo acquired Wachovia in October, the San Francisco-based bank has debated internally how to manage its inherited obligations with the Charlotte tournament. Wells Fargo historically has had little involvement in sports sponsorship. Officials vacillated about buying out the Tour contract or completing the terms, sources told Golfweek.

Last week, the debate intensified when public criticism of Northern Trust’s entertainment associated with the tournament at Riviera found an audience on Capitol Hill.

Rep. Barney Frank, chairman of the House Financial Services Committee, demanded that Northern Trust repay the bailout money.

Frank (D-Mass.) told Golfweek that “sponsoring golf events is greatly exaggerated for marketing loans. There is no great need for marketing since there are many more borrowers than lenders.”

Northern Trust responded to Frank’s public flogging with an open letter on its Web site addressed to shareholders explaining its sponsorship. The bank said that no federal money was used to sponsor the Northern Trust Open or related activities.

“We take our responsibilities to our shareholders, clients, employees and taxpayers seriously, and we remain committed to doing the right thing for all constituencies,” Frederick Waddell, the president and chief executive, said in another letter, written to Frank.

“While our client educational and entertainment activities have all been within applicable guidelines under the Capital Purchase Program, we will redouble our efforts to ensure that these activities are appropriate given the current environment.”

Northern Trust and other banks, at the government’s urging, accepted varying amounts of money from the Troubled Asset Relief Program, known as TARP.

Northern, not as exposed to the subprime lending crisis as many other U.S. banks, was restricted by the original legislation from paying back the money early. The economic-stimulus bill signed into law recently by President Barack Obama allows Northern and other recipients to return the money. In response, Northern said it would pay back the money as soon as possible.

In a related move, Morgan Stanley, a presenting sponsor at the Memorial Tournament, said it will eliminate hospitality and corporate entertaining.

That follows similar decisions earlier this year by automakers after having received federal aid. Chrysler removed its name from the Bob Hope Classic, and Buick scaled back its involvement with the Buick Invitational in February and has similar plans for the Buick Open in August.

Next year, the contracts of Chrysler, Buick and Morgan Stanley will expire; Northern Trust is committed until 2012.

Frank has some advice.

“People that have existing contracts, I’m not urging them to incur legal responsibility,” he said. “Just don’t sign new ones.”

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