In July, it looked as if the PGA Tour would have to toss in the towel on its attempts to salvage a full 2003 schedule.
Commissioner Tim Finchem openly admitted this year’s economic climate was the worst the Tour had faced since the 1990-1991 recession. As more than a few tournaments were finding out, much of corporate America was unwilling to shell out $4 million to $9 million annually in title sponsorship fees for a golf event. Meanwhile, several companies already under contract with the Tour – such as WorldCom and Dynegy – had to void their sponsorship commitments after incurring financial difficulties.
At mid-year, 10 less-prominent events were in jeopardy of not returning next year, potentially causing a serious blow to the Tour’s 2003 lineup.
Tour officials, undaunted, guaranteed a full schedule. Five months later, that guarantee became a reality.
Give credit to the Tour for pulling a rabbit out of its hat, making Finchem look a little like Houdini.
Several elements were involved, one being that golf’s increased popularity and broader fan base has opened the door to a wider range of companies, allowing the Tour to reel in seven new title sponsors for 2003.
Another important component was the help some events received from state and local governments. The town of Hilton Head Island, S.C. – the 34-year home of The Heritage, which chose to drop WorldCom as its title sponsor in July – became the first local government to add a sales tax to help support a PGA Tour event. The 1 percent tax on restaurant and beverage sales is projected to generate $1.8 million to help underwrite the absence of a title sponsor in 2003.
Also, the Tour has offered its subsidy plan as a life preserver for a select few events. After several months of uncertainty, the Tour recently told Reno-Tahoe Open officials they’d be on next year’s schedule, even though the event is entering its fifth year without a title sponsor.
“It certainly helps now that we can go to somebody and say, ‘Here is our week,’ ” said Jim Kline, tournament director of the Reno-Tahoe Open.
On Nov. 25, the Tour made it official, unveiling a 2003 schedule with 48 sanctioned events – only one shy of last year’s count.
Out went the Air Canada Championship in Vancouver; the Buick Challenge at Callaway Gardens in Pine Mountain, Ga.; and the Michelob Championship at Kingsmill in Williamsburg, Va. In came the Wachovia Championship in Charlotte, N.C., and the Deutsche Bank U.S. Championship in Boston.
And thanks to 11th-hour efforts to save several events, there were few changes in the lineup (among the most noticeable are the Greater Hartford Open following the British Open instead of the U.S. Open and the Chrysler Classic of Greensboro moving from April to October).
The booming popularity of golf as a spectator sport helped minimize the scheduling shakeup.
According to Tour officials, golf has seen a 25 percent increase in its fan base since 1995. In addition, the PGA Tour’s television ratings have climbed 17 percent in the last six years.
NASCAR is the next-closest sport with a 10 percent ratings increase, while the NBA, NHL, NFL and Major League Baseball have shown declines since 1996.
“Interest in the PGA Tour is at an all-time high across the board, especially among groups that, at least historically, have not been considered strong in the golf fan area,” Finchem said.
The Tour’s braintrust for identifying and signing new sponsors have been senior vice presidents Tom Wade and Henry Hughes.
Hughes, the Tour’s chief of operations, received support from Duke Butler, Tim Crosby and Wayne White in the business affairs department. The trio was the first line of communication with tournament directors seeking new sponsors or renewals to match the Tour’s new television contract (2003-2006).
Wade, the Tour’s chief marketing officer, bulked up his staff to make sure no stone went unturned in the sponsor search, with the focus on leading sports advertisers and Fortune 500 companies.
“We basically have done everything that we can think of,” Wade said. “There have been a lot of people here burning the oil late into the night and working on weekends.”
The hard work paid off last month as the Tour helped Disney secure its first sponsor in two years – Japanese electronics manufacturer Funai.
For several tournaments such as The Heritage, B.C. Open and Greater Hartford Open, government officials have played huge roles in helping the events remain viable. Hartford came perilously close to losing its spot on the 2003 schedule.
GHO officials, which lost longtime title sponsor Canon in June, hoped to gather $4 million from local businesses to save the 2003 event. Contributions lagged, however, and when tournament officials made it public in October they were far short of their goal, Connecticut Gov. John Orwland got involved. He made calls, stayed in close contact with tournament officials and enlisted the help of Roger Gelfenbien, chair of the University of Connecticut’s board of trustees.
“I think a lot of companies in Connecticut thought the GHO would be fine,” said GHO tournament director Dan Baker. “They (Orwland and Gelfenbien) were very good at getting us to the right people to make pitches on our bridge plan.”
New York Sen. Thomas W. Libous has been a staunch supporter of the B.C. Open in Endicott, N.Y. Libous put tournament officials in contact with two companies that the event is negotiating with about a presenting sponsorship.
Finally, there is The Heritage, which in addition to placing a tax on food and beverages, recently canceled its annual volunteer dinner and asked volunteers to pay $65 for their tournament clothing. The cost-cutting measures are expected to save $70,000 – only a small part of the event’s $5 million operating budget.
Indeed, the absence of guaranteed cash from a title sponsor will make it difficult for these events to meet their operating budgets, which in turn probably will leave less money to contribute to local charities – long a benchmark of the Tour.
Tour officials said they are confident it’s only a temporary situation, believing that The Heritage and GHO – events that have had long-term success – will find sponsors sooner rather than later.
“From my perspective, I’d be very surprised if we don’t have sponsorships by ’04,” Wade said. “We’re in a much better supply-and-demand situation.”
Still, some tournament officials remain concerned about the future, especially with a sluggish economy and the continuing war on terrorism.
“It’s tough for us to sit here and talk (about) a tournament when, potentially, we could be at war (with Iraq),” said Steve Wilmot, tournament director for The Heritage. “Those things we have to consider.”