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October 20, 2011

Tim Finchem

Henrique Lavie

Mark Lawrie

Jack Warfield

NELSON SILVERIO: Good afternoon, everyone. Thank you to the members of the media for participating in today's teleconference. On the line today we have the commissioner of the PGA TOUR, Tim Finchem, the commissioner of the Tour de las Americas, Henrique Lavie, and the executive director of the Argentine Golf Association, Mark Lawrie. Today's call will start with some opening remarks from the gentlemen I just introduced and will be immediately followed by a question-and-answer period open to the media on the line.
I'd like to start by introducing the commissioner of the PGA TOUR, Tim Finchem, who has an exciting announcement today.
TIM FINCHEM: Thank you, Nelson. Good afternoon, everyone. Particularly pleased to be on this call with Mark and Henrique. Jack Warfield is here with me at our headquarters in Ponte Vedra. We're delighted today to announce the launch of the PGA Tour Latino America, which will begin play in September of 2012 and run through December of 2012. This is certainly a culmination of a lot of hard work, strong collaboration between the national federations in Latin America, the Tour de las Americas, a number of event promoters and host golf clubs in that region.
Our expansion into Latin America is part of a natural progression for golf, which continues to grow globally. We take note of the recent history when we had been pleased with the response in Latin America of the Nationwide Tour, which has held very successful events in Panama and Colombia in the last few years, and we recently announced will add another event in Chile starting next year.
I would also note that we anticipate a relationship between the PGA Tour Latino America and the Nationwide Tour going forward. The details of that relationship will be worked on during the course of 2012 within the governing structure of the PGA Tour.
One of the reasons we are moving in this direction is we recognized a need from the PGA Tour brand to help develop a more structured, consistent Tour that would lead to the development of more elite players from Latin America, especially with an eye toward the fact that South America will be hosting its first-ever Olympic Games in 2016, which will include golf's return to competition for the first time in more than 100 years.
We also are cognizant that the Latin America market has already produced a number of PGA Tour stars, and one of our goals from this Tour is to help develop the Latin American stars of tomorrow. 2011, this season year in the United States, there were eight Latin American players on the PGA Tour, a total of 18 on our three tours. However, if you look at the top 500 currently in the Official World Golf Rankings, there are only 14 players from that list from Latin America, clearly meaning that there is obvious growth potential in that region.
When you consider the quality of players that have been produced in Argentina over the years and more recently given the success of Camilo Villegas from Colombia and Jhonattan Vegas from Venezuela, it's clear that -- the trend is clear, and we look forward to working with the tournaments in this region to develop more elite players as we go forward.
With the creation of this new Tour, the Tour de las Americas, will integrate into the new PGA Tour Latino America structure, and I'd like to take this opportunity to thank Henrique Lavie for his tremendous leadership and vision over the years. We absolutely wouldn't be making this announcement today without his support and the support of the Tour de las Americas. With that, I'd like to turn it over to the current commissioner of the Tour de las Americas, Henrique Lavie, for some comments, and I'll be on this call a little bit later to try to help answers your questions. Henrique?
HENRIQUE LAVIE: Good afternoon, Commissioner Finchem, and good afternoon to the press. The Tour de las Americas is very excited to play a new role within the PGA Tour Latino America as what we continue to build on what we established as the TLA over the past ten years. The collaborative effort between the PGA Tour and all the constituents in the region is something that we are all proud of, and it is very satisfying to know that the future of the game in Latino America is in good hands.
We will play several events in the first half of 2012, which will establish some of the priority rankings for PGA Tour Latino America. The TLA should be fully integrated into the PGA Tour Latino America by June of next year. I would like to thank everybody, and I would like to turn to back to Nelson Silverio.
NELSON SILVERIO: I'd now like to introduce Mark Lawrie, the executive director of the Argentine Golf Association, who represented the South American golf federations in the early discussions of PGA Tour Latino America. Mark?
MARK LAWRIE: Good afternoon, everyone there in Ponte Vedra and members of the press. Thank you for listening in. This has been a great collaborative effort among the leaders of various national federations in the region and the PGA Tour. It was a first step in cementing PGA Tour Latino America as the future of professional golf in the region.
This PGA Tour Latino America will afford players in the region a chance to advance to one of the highest levels in professional golf, which is the Nationwide Tour, and which could in turn, of course, lead to players earning their PGA Tour cards. So we find that this pathway to the higher levels of professional golf has been missing for players in our region, and certainly this Tour will help federations in the region to validate their development of up-and-coming players in the region, and of course hopefully develop stars of the future.
So with that, Nelson, I'd like to turn it over to you.
NELSON SILVERIO: Thank you very much. We'll now begin the Q & A portion of the call. Joining us for this portion of the call we have the recently announced chief of operations for PGA Tour Latino America, Mr. Jack Warfield.

Q. I just wanted to try to clarify, Mark talked about this being a pathway to the Nationwide Tour. Has it been decided how many graduates, for lack of a better term, will move on from the Latino America version to the Nationwide Tour, or is that still being decided?
TIM FINCHEM: It's still being decided. It'll be a matter that goes before the Player Advisory Council in the first quarter. We'll have a thorough discussion about it. But sometime later in the year before we start this Tour, we'll have more detail in terms of the overall relationship of performance on this Tour to our qualifying school process, Nationwide Tour, et cetera. There's a number of different pieces to it, and we're going to take a careful look at all of them and share them with our players.

Q. Can you talk about in the years going forward about Q-school or how players will qualify for the Tour after the first wave of TLA events will be used to establish the rankings?
JACK WARFIELD: There are several different methods for players to qualify on the year, and as you know from some previous information that was out, there will be a combination of spots that are controlled by the local events, and there will be a combination of the other spots that will be with the PGA Tour; in a method of recognizing the current TLA Order of Merit from this year, an additional number of spots from the first half of next year, which Henrique alluded to previously. We plan to have Stage 2 qualifying events sometime after mid-year next year, probably June and August, for another group of spots; to recognize the good work that the regional tours have done in market in the countries down there, a representative number of spots coming from those individual tours as host exemptions; and then an additional number of additional categories that we're going to be determining, a small number of those.
So several different methods for players to earn their way onto the Tour not only next year but going forward.

Q. Two questions: Is the intention to have an umbrella sponsor or to operate in different parts of the region under different names? I think of the Nationwide as being a generic for the PGA Tour second level. Do you guys plan to have something of the same order? Question two is prize money; do we have any indication of where that's going to fall?
JACK WARFIELD: We are intending and have been in discussions with several companies involving an umbrella sponsorship for the entire Tour, and we plan to play under the same name, consistent name in all markets, so we are still actively in discussions with many of those companies.
Prize money for next year, we intend to play at a minimum of $100,000, with the idea as we move into 2013 to raise those prize levels up. Several events have indicated to me that they intend to play at levels above $100,000, where they currently are. Of the 11 events we plan to play next year, eight are existing events, so they have existing prize pools. But we anticipate in '13 and beyond that those prize levels will go up.

Q. Jack, I guess this is for you: Does it look like at this point that you'll have at least one event in Mexico, and if so, any ideas where it would be and might you have more than one event in Mexico?
JACK WARFIELD: Well, we currently are in discussion with our partners there, and we tentatively, while the schedule won't be complete until probably the first quarter of next year, we plan to play a minimum of two events in Mexico, Mérida being one of the markets that we've discussed with. The second market is to be determined, but it's an important region for the Tour itself, and we've had very good discussions with our partners there.

Q. And I guess another one will be for Tim. Given the future Olympics, did this become a big priority for you guys once the announcement was made, and how much on the fast track was this once that came to fruition?
TIM FINCHEM: Well, I think that there had been an interest going back a few years. We've watched the work that Henrique has done with the Tour de las Americas. We've watched these new stars, Jhonny Vegas and Camilo Villegas, we've seen the reaction here in the United States when players come up, we've watched the changing demographic in the United States and the way the demographic is going to change going forward in the United States with certainly a direction of more Latino influence and growth. All these are factors.
I think when the decision was made to go to Rio, it certainly was a factor. I wouldn't say that it was a driver to upscale the speed of this because it's been something that's been under discussion a while. But certainly now that we're into that period ramping up to Rio, we think it's very timely, and we're delighted with the juxtaposition of moving in this direction, bringing our brand to this region, as well, during these few years leading up to the games in Rio, and that will just be another piece of trying to accelerate the growth of the game generally and certainly to accelerate the growth of the generation of elite players. It all works together quite nicely.

Q. Is this another step in the direction of sort of lowering the barriers between the tours around the world and eventually, I don't know, a decade down the line seeing a real world tour?
TIM FINCHEM: Well, I don't know the extent to which this particular step triggers any other steps. I do think that the combination, as I've said publicly in the past, the combination of the way telecommunications and our video product has changed in the last 10 or 15 years, the growth of the game in regions that historically have not done much in the way of impacting the elite player list and the way that's changing, the need for golf as a professional sport to be able to compete effectively given the fact that it's a global game, all these things argue for more and more cooperation. But that's not a new matter; going back to 1994 when we formed what's now called the International Federation of PGA Tours, there's been step after step moving down this path.
Whether this particular step accelerates moving in that direction, you know, that would be speculation. I do think, though, that given those factors I mentioned earlier, this is a very positive step.

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