Contrary to what some politicians might think, golf is not evil, and it should not be seen as the poster child for corporate excess.
A few weeks ago at the PGA Tour’s event at Riviera Country Club, Northern Trust was once again the title sponsor. The Chicago-based bank signed a five-year sponsorship agreement with the PGA Tour in 2007 to be the host of the storied event. The firm brought clients and employees to the tournament, hosted concerts with stars like Sheryl Crow and held dinners and cocktail parties for attendees.
Northern Trust also recently received $1.5 billion in bailout funding from the government.
After the event, Representative Barney Frank of Massachusetts, along with other lawmakers, demanded that Northern Trust repay the government.
“If the justification is marketing, bringing your brand to the attention of the public, presumably you do that by putting your name on a tournament,” Frank told CNBC. “What’s that got to do with taking some of your employees and putting them up in luxury hotels?” Forget the fact that the source of Frank’s outrage was a story by TMZ, the tabloid Website and television show. Forget the fact that Northern Trust says it never wanted any government money in the first place!
No one would argue with the idea that every dollar counts in this economic environment, and Northern Trust officials quickly pointed out that none of the money the bank received from the government was spent on the PGA Tour sponsorship or the events surrounding the tournament.
But their statements fell on deaf ears, and the media pounced, playing up the angle that sponsoring a golf tournament and entertaining clients after receiving government funds was wasteful. What better way to conduct class warfare than to use the elitist game of golf as an example?
However, another CNBC report detailed how Bank of America officials justified sports spending. They calculated that for every $1 the company spends on sports, it nets $3. The bank also attributed 10% of the checking accounts it opened in 2008 to sports promotions.
While I was at the Northern Trust Open, I didn’t see many stories about how the tournament has raised more than $50 million for charity since 1932. There wasn’t a lot of attention paid to the fact that active duty military personnel could attend the Northern Trust Open for free. And I didn’t read any articles about how corporate event spending helps to keep airlines, catering companies, hospitality workers and local businesses operating. These tournaments are economic engines, and it would be a shame if government pressure and public perception caused the sponsors to bail out.
With this bad publicity and the current economy, Northern Trust and other companies like Buick, Bank of America, U.S Bank, Chrysler, Barclays, Wachovia (now Wells Fargo) and Deutsche Bank would likely walk away from professional golf if they had to sign new sponsorship deals this season. Ginn Resorts has already said it is pulling out of golf, and FBR said it will end its sponsorship of the PGA Tour’s Scottsdale event after the 2010 tournament.
It is time for PGA Tour commissioner Tim Finchem, LPGA Tour commissioner Carolyn Bivens, PGA of America president Jim Remy and executives from the USGA to drive to Washington in hybrid vehicles and let every representative, senator and government official know about the good things that golf—and the companies involved with the game—do for local communities.
The local economies in places like Scottsdale, where I live, are hurting because companies are shying away from corporate entertainment and travel for fear of sending the wrong message. It’s a shame that the attack on the elite is costing people like hotel workers, restaurant waiters and golf maintenance workers their jobs. Barney Frank needs to be better informed about the good that golf does, not just the TMZ version of the “elitist game.”
Finchem sent a video message to members of the PGA Tour earlier this season, encouraging them to be especially supportive of the Tour’s sponsors this season. Golf needs him and the other powerbrokers in the game to step up too.
Parting Shot: Use the downturn as an opportunity
With so many things potentially in flux, here are two adjustments I would make right now to make the PGA Tour more compelling:
1. Make the Mercedes Benz Championship a Year-End event. Right now, this no-cut tournament is only open to players who won a PGA Tour event the previous year. It’s a reward. So instead of holding it during the first week of January in Hawaii, play it in December, the week before Tiger Woods’s Chevron World Challenge in California. Right now it is an unfair bonus where last year’s winners get a head start on the money list and Fed Ex Cup points. The field would undoubtedly be stronger, and it would create more of a buzz.
2. Make the WGC-Accenture Match Play Championship the first event of the season. What better way to get the season started than to get the 64 best players in the world together for one-on-one showdowns? But I would change the format from single-elimination to double-elimination and start the tournament on Saturday. Network television would be guaranteed a chance to air one of the most compelling days of golf of the year and show stars like Tiger Woods, Phil Mickelson, Ernie Els, Camilo Villegas, Sergio Garcia and Anthony Kim. The tournament would continue through the week, so the Golf Channel would get coverage of the elimination rounds of a big-time event. And much like Wimbledon, the semifinals and finals would be played the following weekend on network TV. Everyone loves the thrill of head-to-head competition—let’s give ’em what they want!