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May 10, 2016

Tim Finchem

Mike Whan

Erik Anderson

Ponte Vedra Beach, Florida

CHRIS REIMER: I want to welcome everyone and thank you for joining us. Just quick introductions, we have with us today Tim Finchem, PGA TOUR Commissioner; Erik Anderson, the group co-chairman and CEO of Topgolf Entertainment Group; and of course, Mike Whan, LPGA Commissioner, as well. To get started, Commissioner Finchem, some opening comments.

TIM FINCHEM: Yes, just to start off, thank you for, first of all, being here this week for THE PLAYERS. We look forward to seeing you during the course of the week. Anything else we can do for you while you're here, we welcome that opportunity.

This is a, we think, particularly important discussion and announcement today among the three of us and also involving to some extent all the programs that are fostered by the World Golf Foundation that deal with growing the game, reaching young people, and things of that nature that we'll talk about.

The reason it's exciting is because we have been in discussions with Topgolf for a couple years. We have watched their progress and we have been more and more excited about what the concept of Topgolf can do to impact some of the things that Mike and I and the other golf organizations are certainly focused on day-to-day and concerned about in the long-term.

Really, those fall into three or four buckets. And let me just take a minute and talk about with a little bit more specificity what we mean by that. I'll just preface that by saying, I don't know how many of you have been to a Topgolf facility.

My first trip to a Topgolf facility immediately told me the impact it has on young people, because it is designed in a way that it has a positive experience for young people from the first time they pick up the club, which is unheard of in the game, and really, we think, changes the needle in terms of bringing people into the game.

The other thing I was struck by is the intense enthusiasm that was reflected by watching these young people strike the golf ball for the first time. And if you just watch them, you know that if you went up to them and said, we would like for you to continue in Topgolf all the time and while you're at it, come over here and learn how to play traditional golf courses, they would jump at the opportunity.

But we think we share the vision of working together to help grow the game, to help Topgolf grow and reach more people, to impact the fan experiences at our particular tournaments, as it relates to Mike and I, to help build our tournaments, and to do a number of things together that we think over time will have a really strong impact.

It involves combining assets of our various organizations, certainly with the PGA TOUR and the LPGA. It involves collaboration between Topgolf and individual tournaments of the LPGA and the PGA TOUR in markets that we represent with our tournaments and that Topgolf is either in or will soon be in, an example being that we have a Topgolf facility under construction just 20 minutes from here. Once it's completed, it can be then a vehicle that we can look to to link opportunities for building both THE PLAYERS Championship and the WEB.com TOUR Championship as well.

Another area, second area, is reciprocal distribution of content across our respective platforms that can be generated by or in conjunction with Topgolf activity. Another is to assist, to grow-the-game initiatives that have been the focus of the World Golf Foundation. This includes, obviously, The First Tee, Drive, Chip & Putt, LPGA Girls Golf and PGA Junior Leagues. These can all be included in efforts that would be supported by a collaboration of PGA TOUR, LPGA Tour and Topgolf activity.

And finally, charity. Both Mike and I are focused on charity at our tournaments. It's a big part of what the PGA TOUR is all about and has been for a long time. Topgolf has a lot of applications that could be brought to bear toward directly with tournaments in specific markets to help grow the charitable impact in those communities. We know from our history and our experience that when golf does great things for charity, communities respond positively.

And then lastly, we are looking at working together on World Golf Tour now which has been now acquired by Topgolf and the World Golf Tour digital game to do things together. Now to summarize sort of the collaborative possibilities that fall out of this strategic alliance, we have generated a map. And if you look at that map for a second, first we'll show you current Topgolf facilities, and then we will add to that projected Topgolf facilities, and then key junior golf initiatives, and then as well, where they intersect in key markets.

So this is an enormous amount of potential collaboration, which is simply going to grow as Topgolf continues to grow. Between Mike's organization and the PGA TOUR, we have a lot of reach and a lot of markets. We're there at different times of the year, and each of those tournaments represents thousands of volunteers, thousands of charity contributors, thousands of charities, thousands of fans, all of whom can be involved in the weeks that we're not playing and to some extent the weeks we are playing with Topgolf activities that can feed into the charitable focus of the tournaments or the overall support of the tournaments in other ways and at the same time grow what Topgolf is doing.

So I think you can see that this is a possibility and a strategy that has yet to be totally developed, but the concepts are very clear to us, and the message today is that our organizations are wedded and committed to doing what we need to do to take advantage of this collaborative opportunity.

So with that, I'll turn it over to Mike to make a few comments and then Erik.

MIKE WHAN: Thanks, Tim, and thanks, Erik, for not only thinking about your businesses but thinking bigger and helping us from an overall sport perspective. Tim, you clearly have better Power Point skills than I do. That map is pretty strong.

For the LPGA, this is pretty simple. This can be big for all three parts of our business, from tours to teachers to our girls' golf initiative. It's it doesn't take a rocket scientist if you've -- Tim started with if you haven't been to a Topgolf. If you haven't been to a Topgolf, you probably don't understand the excitement of this three-way alliance. If you have, you probably could write the article without us sitting up here.

I've been to four. Not only have I had a great experience, but I lost a credit card at a couple of them. It's a pretty good way to go.

But we started thinking about it from the first time I walked in. I said, imagine a pro-am party on the LPGA that's completely different. Now an amateur walks into a Topgolf, gives them their name. We tell the amateur, your tee time tomorrow is at 8:34, but tonight you're in bay 47 and they walk to bay 47 and at bay 47 are the two LPGA players they'll be playing with tomorrow in our 90-minute pro-am, and that night over a couple of drinks, some good food, and some competition, because on the scoreboard they're going to be competing with all the same groups that they'll be competing with tomorrow on the golf course. One of the things we struggle with a lot is how do we make sure our players and our amateurs kind of get to know each other and meet each other in a pro-am gala situation, and a perfect way to do that is to introduce golf in the middle of it.

So the first time walked in, I thought, this is better pro-am party than we have ever conceived, and it's right down the road from so many of our tournaments. On top of that, if we had LPGA teachers walking around providing tips for those that wanted them at the same night, band playing in the background I think instantly changes the anxiety, the nervousness and the fun that comes out of a pro-am party.

On the girls golf side, we have got 50,000 girls a year getting introduced to the game, and the first thing we think about every time is how are we going to create an environment that's fun, energetic and all theirs. And the first time I met with Erik, he said, well, 8:00 in the morning we're not using this facility; you want to use it? And if we could walk in with seven- to 12-year-old young girls in an all-girls' environment and start playing at a Topgolf, their first experience, to Tim's point, is different right off the bat.

And the last thing that hit me when I walked out of my first-ever Topgolf, as I walked around, I thought, I wonder what percent of these folks haven't hit a ball on a golf course before. I remember we met, you said it's 50 plus. So I got 50 plus percent of those people walking out of there and they're more than ever ready to be a fan. They're more than ever ready to be engaged in an event like this. They're more than ever willing to get involved and help more young girls play the game, and I've made this comment many times in many press rooms, but my wife's never played a college football game in her life, and I've never played a college football game in my life. I hate to say that out loud, but I never played a college football game, either.

But we try and have the college football games, we watch it every weekend, we spend money on it. We're engaged in the sport, and we didn't have a pure college football experience, and when I watch people walk out of Topgolf, I see the future of our fans, future of our viewers, and the future of the people that are going to enter this game.

So from our perspective, Topgolf can help grow the actual participants, can help grow the actual fans, and is already making a stereotypical shift in how people feel about the game and the experience and what it can be. I don't know if this is fair, but I make the comment a lot that I got to leave the golf industry back in 2000 and rejoin it in 2010. And I've said this many times, the thing that I most see different when I came back in 2010 was collaboration and people like Tim and others really bringing the industry together.

I think this is a great example. I don't know in 1990 were Topgolf to role out in the States if traditional golf would have put arms together and said, let's go. But what's really cool in my mind is that in 2016, everybody that I know that's in the game says Topgolf can be good for everybody, and I think importantly Topgolf realizes that we can be good for each other.

So I just want to say on behalf of on the women's side of the game, thanks both you guys for thinking bigger, and we see the potential. We look forward to working with you and finding more ways than we jotted down in the first few meetings.

But just like Tim and I have learned in the PGA TOUR alliance, what we thought were some really cool ideas when we started talking became dwarfed when our teams got together and started really putting ideas on the wall, and we're excited to see what's happened to that alliance, and I'm just excited to see what will happen to this one. So thanks, Erik.

ERIK ANDERSON: Commissioner, thank you so much. Well, it's a true honor to be here. It's in many ways a dream come true for Topgolf, and I want you to all know I'm speaking on behalf of Topgolf, all of the 11,000 associates who work with us now, our partner, our board, my co-chairs, Tom Dundon and Chip Brewer from Callaway, so I'm pleased to represent all of them today.

We have always wanted to have this partnership. We have had a number of conversations along the way, and this is really the right time to do it, so we couldn't be more pleased to be having this conversation today and building this partnership together.

Before we get on, not everybody's been to Topgolf. We'll get on with a few of the specifics. I think it will be nice to see a video we have put together. We like to call it our sizzle video, I guess, but it's sort of a piece that explains Topgolf. So we would like to share that with you this afternoon, and then we'll get on with some more specifics.

(Video played.)

ERIK ANDERSON: There you go. Well we're proud of that anyway. So, we again appreciate your time today. Let me go through a couple of stories about Topgolf or where we are, then we'll talk about our partnership.

As you can see, Topgolf's a lot more than just golf. We've taken a lot of the -- all the great entertainment ideas, social media and activities, food, music, and we brought them together. We have 24 venues now open around the world, and our goal is to be opening about 10 a year, and we're well on to that track.

In each of our markets, we have become a go-to entertainment destination. That sounds a little funny, right, for all of us who grew up playing golf, that it would be the fun thing I'm going to do is take everyone out and hit golf balls, but it's nice when we all don't have to go to the first tee straight away, and we have become that go-to place, whether it's for business or for families. We have a lot of first dates, so people will tell us that a lot. So we think we're really just embracing the entire community of entertainment and sports and really building, of course, on the history of golf, and we'll talk about that as we go through this.

We are expanding rapidly. We'll open seven more this year. We'll break ground we think on another 14 before the end of the year, so 2017 will be a really big year. You saw that on the map. Some of you probably heard that we're going to be opening in Las Vegas in just a few weeks. That was a four-year project for us. We are in partnership with the MGM, and we think that's going to be a fantastic place, as well, for our partnership and all the players on the TOUR and all the fans that we like, so we couldn't be more excited about that as we go forward.

But we aren't just growing the physical presence. We realize this is a digitally connected world. I know that the PGA TOUR and the LPGA share that vision for sure with all the good work that they're doing with their marketing and all their apps and mobile devices. We as part of that saw the opportunity when it became available to purchase the World Golf Tour. We got a fantastic, the largest digital audience in golf, another 12 million people, and in addition we got a fantastic team of 40 professionals who really now comprise what we call Topgolf Media.

We also found out this year while -- and we had a hunch, but we were sort of little and we grew up a little bit, that we were starting to make a difference in golf. And what we found with some research from the National Golf Foundation was that we probably introduced a quarter of a million to a half a million new golfers this year. They went and did that research and talked to people and what they found which is what the two commissioners were describing to us was that when people engage in that and had that positive experience, they naturally wanted to follow the game, and of course that leads out to the course.

We also found that people who hadn't played as much golf or hadn't played for awhile got re-engaged in the game. And of course the youth thing, really starting to work with the youth and think of a partnership for the young people with both of these tours will just be fantastic for us.

We see a lot of alignment going forward to grow the game. Along with the Tours we think we can introduce music. I think the charity -- I want to pause on charity for a moment and tell you how important we think that can be.

We mentioned earlier I mentioned that we view ourselves as building on the foundation of the game. So the foundation of the game has so many great things. First of all it's a fantastic game. It's a game of integrity. You play against yourself. You play against the course. You can build lifelong relationships.

We see that happening at Topgolf all the time, albeit in a different way. But it's still an authentic golf experience. In addition, when we look at what we can do, working like with The First Tee and things like that, we can bring that, scale it. We were talking today earlier in the conference room, we were talking about how much advantage scale has for all of us. Again, you see that from the map that Tim put up, that we can scale.

So we can bring many young people to the game in a way that's very fun. And so we are excited about that. In addition, we think the charitable aspects which has been the foundation and is so unique to golf of all sports and something all of us are so proud of being associated with golf, we think we can continue to extend and grow the charity aspects. Many ways we can do that.

We can continue to have events that will sort of be a new and fun and fresh event and we'll sort of do a couple of those now. We're doing those and we think we'll be able to use the game like almost realtime where you'll be able to try to hit a hole-in-one for charity all the time across our sites and grow. So we're going to grow on the strong history of the game. We're going to reach out to the youth and partner there. We're going to reach out obviously with the charities and do that, and we're also very excited about the competitive aspect, and we have thought for a long time that it would be fun to have something called Topgolf Tour.

So we're going to be licensing and working on that together with the LPGA and the PGA TOUR to have a Topgolf Tour.

All those ideas to be designed yet, particularly that one, but we can see our way to that quite quickly, and we believe we'll be having that going in 2016 and beyond.

So all of those elements come together as we grow at Topgolf and we have always had the support from both PGA TOUR and the LPGA Tour as we went along, and we're bringing that support now to the culmination, and on behalf of Topgolf, we can't be more excited to grow the game with everybody, and we can't be more excited or proud than to be associated with both of your organizations. So thank you for having us here today.

TIM FINCHEM: Thanks, Erik. Thanks for being here.

CHRIS REIMER: Thank you, gentlemen. We'll take questions, please.

Q. Mr. Anderson, I've heard that Topgolf attracts a different group of people depending upon the day or evening hours. You get a lot of seniors or retired people during certain day parts and then you get kids and youngsters after school and then you get the date night people which we are seeing in the videos; is that accurate?
ERIK ANDERSON: Yes, that would be fair.

Q. You mentioned the Topgolf Tour. Commissioners, is there some vision of any kind that your players would actually be participating in any way in any kind of competition at a Topgolf?
TIM FINCHEM: Well, we envision our players being involved with Topgolf, whether that's part of the TOUR or that's an amateur event totally. We're probably on the latter side, if it is an actual tour, but we don't know yet. We're open. I mean in a lot of these areas, as Mike put it best, that we're just in the process of merging our various people for idea making and we're already getting quite creative. So I think we're open to virtually anything that helps cover the three or four objectives we have mentioned at the top, particularly getting young people started in and then making sure that -- we're trying to make sure that we're the local program, whether it's PGA Junior Leagues, USGA, LPGA girls programs, First Tee, whatever it is, develops an interface so that it is a win-win for both Topgolf and the scaling of the number of young people that are coming into the game.

Those are the fundamentals.

Charity also is an area that we have just started talking about, which we think has, candidly, fairly significant upside potential for the tournaments and for Topgolf. So we're open in most of these areas and not nailed down to one course at this point.

Q. Mr. Anderson, one of the fundamental building blocks of The First Tee was make golf affordable. Now that you have this alliance and everything, I don't know what your rates are because obviously we're still under construction here in Jacksonville, but do you envision any kind of junior rate, family rate, or something like that, that might be a little bit below what you're charging now?
ERIK ANDERSON: That's a great question. And we're going to support youth golf, and I think the direct answer to that will be yes. We imagine in the morning times, which is great time, Saturday morning, Sunday morning that has not been a peak period for us, but it's great time to teach golf. It's a great time for families to come out, so I will make it affordable, and I think our history already and our summer programs and the like, if we were to go look at them, is that they are quite affordable, and of course, we provide high-quality clubs that are at the sites already, so some of the traditional expenses that stand in the way are already taken care of by the business structure that we have.

Q. Tim, Mike, what was it about Topgolf that made it jump to the forefront as the first thing that you would focus on since announcing the alliance?
MIKE WHAN: The easy thing is it's just bringing people to the game that aren't in the game or didn't really have an inkling to join the game before their Topgolf experience. As I said, if you spend an hour there, you pretty quickly say, hey, this is a game changer, right. It's an opportunity for us to bring more fans to the game, I mean, and again, my mind triggered on every element of the LPGA. What a great place to host girls' golf events early in the morning. What a great place for an LPGA teacher to be able to kind of mill around here at different events. We talked about corporate outings. The one I was at in Dallas, there was a band playing in the background. It was literally people dancing at the band. There was people in the bar watching the NCAA Final Four event that was going on, and they weren't there to golf, they were just there at the bar, watching the game, and you had to wait about 40 minutes to get in a bay.

And I just remembered looking around thinking, there's so many applications, if we're smart, if we embrace this, to figure out how to get these people from here to in front of their TV's with us to at events to learning the game and vice versa, so it's -- I think the most important thing when you see that is to say, if we view that as not golf and we are golf, both of us are going to be making a huge mistake as opposed to embracing this and saying, I see people smiling and having fun as they hit the first golf shot of their life. I remember my first shot of my life; it didn't get followed with a high five, and so this is a unique opportunity. And like I said, I'm proud of the industry that we realize that and we say, if we can figure out a way to embrace what's going on here, there's upside for TV viewership there's upside for on-course fans, there's real upside for how we incorporate our amateurs and our corporate sponsors in a more enjoyable way around our own event.

So that's, like I said, if you spend an hour there and you sit in my chair, you just start thinking, we could do that, we could do that. There's just a lot of upside.

TIM FINCHEM: So let me see if I can help with that, too, from our perspective. It's slightly different but very similar. But the one thing I would point out is that if you want to take full advantage of the elements that we're talking about, probably the start, a starting point would be within each of the markets where there's that overlap we showed you in the map, so let's use here as an example. So we have 2000 plus volunteers, we raise a lot of money for charity, we're always looking for ways to raise more money for charity and then have you a First Tee program here, the other, some of the other golf programs are here, as well. Or it could be in the next five places where the PGA is playing the PGA Championship and trying to drive Junior Leagues, whatever it is.

But you look at the market and you have Topgolf at the table and you figure, okay, how can we work together to identify kids who want to come to Topgolf; how are we going to move kids from Topgolf into these other programs; the tournament, how can we incentivize the tournament to help support all that, because we learned a long time ago on First Tee that you've got to be able to get the kids to the program, if it's an after-school exercise or even a summer exercise.

All these things could work together to continue to scale the number of young people we're reaching in these different programs. At the same time we're scaling activity at Topgolf. So it's a probably a market-by-market strategic exercise with it taking on various forms, depending upon the market we're in.

Q. Is there any reason why the PGA of America isn't also part of the alliance?
TIM FINCHEM: Well they are, they are. Well this is -- the alliance has to do with weekly tournaments that are directly involved week in, year and year out with Topgolf facilities. That's what we're talking about today. But clearly all through our conversations, the PGA, the USGA, have had various and sundry, Erik can speak to it, interfaces with Erik, with his team, for the same reason, too, to take those initiatives and work together with Topgolf to grow as well.

I think Steve Mona who is here who runs the World Golf Foundation is going to try to quarterback all that at the higher level, and then as we get into the markets, make sure that everybody is totally involved. There isn't any we or they. This comes on the heels of PGA, PGA TOUR strategic initiative, and it made sense as we were on a short time fuse to get to this point today and now we'll spread it.

ERIK ANDERSON: I might just add specifically I was in email contact today with Pete Bevacqua and he was excited about this and talking about when we're in conversations with them on their youth golf, and also we're very attuned to the PGA professionals and what are good opportunities there. So we have a very active dialog with the PGA, as well.

They serve a little bit different mission, but the growth of the game we're all excited to be working on. So Pete sent his best to me and our team today, and we let him know we were having this announcement, and he was -- they were very excited.

Q. Besides anecdotal evidence, what do you have that indicates that people go to Topgolf and then actually do go to a golf course or a driving range?
ERIK ANDERSON: We, the NGF, National Golf Foundation, did a substantial study, so the numbers I was referring to there came from their work, and we can make that available to you and find it, but National Golf Foundation this year led a substantive study that found those connections.

TIM FINCHEM: And I would just add to that that the -- I think most of you are aware that we are looking carefully at the current metrics that are used with the NGF on measuring because we would like to see more focus in the nontraditional areas.

We think that -- which is taking place already in Europe, because we think the nontraditional areas are good barometers for the overall health of the game. Certainly from the professional game standpoint, barometers for the interest level in the game that we're going to see going forward, and we're putting some energy behind making sure that the methodologies that are used in that regard are very good and they're ongoing over a long-term, whether it be First Tee or any of the other grow-the-game programs. And that kind of dovetails with what Erik wants to see in terms of measuring as well, so that's an area that we're going to be putting a lot of energy behind.

CHRIS REIMER: Gentlemen, thank you. We'll transition into our Olympics press conference at this point. But congratulations and we appreciate your time.


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