June 21, 2006
TODD BUDNICK: Thank you for joining us today, Commissioner. Shall we just start with questions, Commissioner, or do you have an opening statement?
COMMISSIONER FINCHEM: Let me make a couple of brief comments, Todd, thanks. First of all, let me apologize for the change in schedule. We've had terrible weather in Columbus, Ohio today. We decided to do this by telephone.
I want to thank publicly Washington Golf Charities for the preparation for the tournament, chairman Marty Russo, also to our sponsor Booz Allen, their chairman Ralph Shrader for their support over the years and through this year. We're delighted that we've had their partnership.
As far as 2006 goes, I'll just say we're very pleased with the condition of the golf course. We're proud of our golf course at Avenel. We think it's a solid golf course these days. We're delighted that so many players have reported in that they think it's in the best condition that it's ever been. I want to single out Dennis Ingram, our superintendent there, for just a tremendous job in getting the golf course in the kind of shape that it is.
I wanted to make myself available to you today generally to talk about the Booz Allen Classic this year, the future of PGA TOUR golf in Washington, and then anything else that you'd like to discuss.
Let me say about the future that our plan continues to be to try to play a fall event beginning in 2007 at Avenel. We do not have sponsorship for that event, although Booz Allen has indicated a commitment to stay involved but not in the title position. That search continues. We have not set a date yet when we would end that effort. We anticipate working on this for a while more.
We are still optimistic that we can pull a tournament together. Notwithstanding some of the negativity that the date change has resulted in, we believe we can field a good solid tournament in Washington in the fall.
With respect to the golf course and Avenel, we continue our efforts toward the refurbishment. Even though the golf course is solid, we know it can be better. We have an extensive plan with respect to the clubhouse, with respect to those areas that affect galleries, and in particular the golf course that we've been now working on since late 2004, about a year and a half. We are coming to a conclusion in the permitting process. We have a public hearing on July 21st with Montgomery County. Subject to that hearing, we anticipate later this fall a conclusion to the permitting process.
If the permits are granted by the end of the year, we'll have two years to do our work. We anticipate a multi million dollar refurbishment. We anticipate doing that work in '7 or '8. If we move forward with the tournament in the fall, we would probably have to play somewhere else in either '7 or '8, but we will wait till the end of the permitting process to make that determination.
Let me say finally, in the event we are not successful in placing Washington in the fall calendar in 2007, going forward for the next cycle, we will nevertheless complete work on the club and look for opportunities downstream to bring an annual event back to Washington. In the meantime, we recognize the United States Open will be played at Congressional in 2011.
With respect to next year, we look forward to the debut of the FedEx Cup, the TOUR playoffs, and the fall series. With that, I'd be happy to try to answer any of your questions.
Q. Several players have come in this morning and expressed very strong opinions on not being on the same part of the schedule, even the possibility of not playing. Tom Kite called it a travesty that the TOUR is not going to be here. Several other players have voiced similar statements. How would you react to that? Maybe at this point could you give us a real detailed explanation of why this didn't work.
COMMISSIONER FINCHEM: Well, first of all I think if a player or anybody I guess is talking about not playing in Washington, certainly that's not a direction we want to go. It's not a direction we intend to go.
I think with respect to playing in the fall in Washington, there is this general unease to some extent in lots of parts of the country when you try to play golf tournaments in the fall, and there's a concern of whether you can be in the football season. Certainly when we moved San Antonio to the point where we were trying to make it a special event in the fall probably six years ago, there were a lot of naysayers about whether it would work. Today we have about a $5.2 million, $5.5 million per annum to charity successful tournament in San Antonio. In Tampa, I think last year was the seventh or eighth strongest field among cosponsored events in October in Tampa, over a million and a half dollars raised for charity. Those are markets where football is very strong.
It's the same challenges that occur there as what happened in Washington. I know when we first brought The Presidents Cup to Washington in 1994, you had people saying you just can't be serious about playing a golf tournament in the fall in Washington, D.C., yet we played four times there, and it has been very successful. It just depends on the golf course, the sponsorship partnership, the quality of operations, the charitable partner, and the extent to which those things come together to attract a credible field. I think the fans, whether locally or through television, will respond.
That's our thinking. That's our philosophy. Certainly there isn't any consideration for moving in a direction where we would intentionally not play tournament golf in Washington. That's our intention.
As I said earlier, we're planning to spend $18 million to $20 million on a facility in Washington that we fully intend to be a facility that lends itself to the highest level of competition at some point in the future. At this point I'm not able to predict when, although it continues to be our focus for the "when" to be 2007.
With respect to how we got to the scheduling decision, as I indicated at the end of our television negotiations, when we released our schedule earlier in the year, we felt like it was important to give as many weeks to possible consistent dates. We could have gone to a continuation of a situation where some years we play earlier in the summer in Washington, like we played last year, and other years we could play later in the summer. The feeling was that we would continue to have an inconsistent execution of our product, probably the fallout of that being a lack of continuity with the title sponsor, which has certainly been the case there since Kemper left. We just didn't want to go down that road. We wanted to try something we felt like had a better chance of continual year in, year out success.
We couldn't accommodate in that environment everything we wanted to do and make everybody exactly happy. We thought with respect to Washington, this was the best course. We continue to believe it is. But overtime we will determine that.
Q. If you do go ahead and make the changes like you say you're going to here, irrespective of what happens next year or the year after, is there a possibility if the course and facility become a strength as opposed to a perceived weakness as it has been in the past, you could move this event back into the FedEx Cup at some point?
COMMISSIONER FINCHEM: Yes. I think if we get going next year, the first challenge will be to arrange for sponsorship and put a schedule together that allows us that either in '7 or '8 date off so we can do the right job on the golf course. If we go a different direction where we break, we take a break and get the work done and come back, then, yes, there are flexible opportunities in the schedule long term.
Again, I suspect the agronomics, they always figure into date equations, and we are going to readdress the golf course in its entirety as part of the scope of this. It may allow us some more flexibility with the newer grasses and consistent grasses that gives us a little more comfortable level in date options.
Another thing that may happen, in the FedEx Cup competition, we will know more about playing patterns. Our assumption is that every tournament is going to benefit from the FedEx Cup, and we also believe the fall events will perform quite well, but we'll have a better sense of that downstream. If we don't get going next year, we will look at every opportunity.
I will just say, we own the club there. Our headquarters used to be there. We have a long history in Washington. We're delighted that the USGA is coming to Washington. We're delighted that some of the other golf organizations are looking at competitive opportunities in Washington in the years to come. But we want to be in Washington. Frankly, if we're going to be there, we want to do it right. I think Ralph Shrader has said a number of times, I certainly concur in this regard with what he said, we ought to have a first class event in Washington if we're going to have one. That's part of how we got to this point. If we're going to move forward, we want to do it in the best possible way.
Q. Big picture question. How did the tournament in DC, one of the biggest markets in the nation, nation's capital, wind up on the outside looking in as far as the good dates go, and some tournaments in smaller markets, like the 84 Lumber in Greensboro, not nearly as well supported by the public as this one, how did they end up with the good dates and this tournament was on the out?
COMMISSIONER FINCHEM: First of all, it's kind of hard to answer that question in the way you phrase it because you're assuming certain things about a "good date." We have dates on our schedule from the first week in January right through now the fall series to November. What's a good date for one market is not a good date for another market. What's a good date for a particular sponsor is not a good date for another sponsor in the same market. There are a lot of variables in terms of what goes into a date.
I think that the reaction to the date change in Washington has really been focused on one thing, and that is being in the FedEx Cup season, early summer, is preferable to anything else. I certainly wouldn't argue the point that being in the FedEx Cup season is an advantage. But I think the reaction perhaps has been a little bit overdone in terms of the negativity of the fall, as I said earlier.
The bottom line is that we were not comfortable, and frankly neither was Booz Allen, in continuing a date structure that has historically led to an event that would not be the kind of event on a number of levels that we'd like to see over the long term in the nation's capital. We wanted an opportunity to do something better. We thought consistent dates was part of that, but there are other factors.
I just want to underscore the notion that our focus for the long term, I've learned in this job over the years that that's the best way to look at it, it's not so important what happens in the next couple of years; it's more important what happens over the next 10 to 20 years. In that longer term, we want the ability one way or the other to get to a point where we have a first class event in the capital, and that's our intention.
Q. Two years ago they talked about the changes they were going to make at Avenel. Fred Funk was in here earlier talking about how there was a lot of issues with permitting. If they had figured all these issues out and problems out beforehand, actually had the permitting two years ago when they were thinking about breaking ground, this course had been redone by now, do you think this event would still be in the FedEx Cup Series?
COMMISSIONER FINCHEM: You know, first of all, let's go back and talk about let me answer your question in a second. I actually don't know the answer to that question, but I'll speculate.
We started this in late '04. We went to the board at the end of '04. We got a budget line item to utilize for '05 to do planning. We met with Booz Allen in the spring of '05, a year ago, and talked about the scope of the project. We got the permitting process moving by the end of '5.
At the very outset of this direction, we were hopeful to be able to do the construction, do the work in '06. It developed that that just wasn't going to happen. The planning took too long. The permitting process was too long, although public officials have been cooperative with us to date.
We're headed to a situation now where we will do the work in '07, so we have a one year delay. The work product, the work has moved at pace since late '04 when we got going. The scope has moved around. We've had a lot of input. We've had probably 20 players included in the process, over 35 players have viewed the property with us and our design team. We've had multiple architects review the property and make, without the need to be retained, a series of recommendations. An awful lot of work has been done. A lot of tournament planning work has been done.
I don't want there to be any question in anybody's mind there has ever been a hesitation to move forward with this project. In fact, I can tell you unequivocally that it's not just for the tournament, it's also for the benefit of the members. But largely it's to make sure we have a quality, competitive venue in the nation's capital.
Now, had this been expedited, would it have changed anything? Not in this instance because at least in terms of the current situation we're in, because the only sponsor partner that we've had to discuss this with is Booz Allen, and Booz Allen had made it clear from day one about certain date limitations after the U.S. Open. That more or less dovetailed with our attitude that continuing to move the tournament back and forth was not consistent with being able to stage the kind of event and to have continuity of sponsorship.
I doubt seriously whether an expedited schedule would have made that big a difference. If you come back and rewrite history, I can't swear to that.
Q. Was the only acceptable dates to Booz Allen the week before the U.S. Open or were there other acceptable dates in the calendar?
COMMISSIONER FINCHEM: There were other acceptable dates. The main thing, the main point of Booz Allen was they did not want to play anything after the Open. That was troublesome for us in juxtaposing a schedule unless we went back and forth. But even then they would not have been comfortable with it. We could have moved it around different ways before the Open, but that caused us problems in other markets where we wanted a consistent date.
It's just one of those situations where we had too much water to put in the glass, and what was the best alternative given that situation. Again, we think this is a decent alternative. If it doesn't work, we'll certain for others going forward after we complete our construction.
Q. We haven't had a chance to talk to you since what happened with the Memorial with the bunkers. What were your feelings? How do you think the test case worked out? Is there anything that you regret in regards to most specifically maybe not notifying the players beforehand?
COMMISSIONER FINCHEM: I think if you just stand back and look it from a strictly competitive standpoint, it's hard to argue with our team, our officials, who feel strongly on this point, Nicklaus and his people, who feel strongly on this point, which is that bunkers are hazards, and you play the ball as it lies. (Indiscernible) competitively play the hazard. There was a growing sentiment, I guess, that this may be fueled by (indiscernible) over the last 12 years, but there's a growing sentiment that bunker play has become too routine.
I hear it on two levels: one is that it's not competitively challenging enough, and number two, it's not interesting enough to the spectator if guys are getting up and down a lot. The problem with that thinking a little bit is, however, that they'll always get up and down.
If you stand back and look at Memorial, 2005, players got up and down I think 47% of the time on greenside bunkers. This year they got up and down 42% of the time. It's not a huge falloff.
It seems to me it's a different issue in the fairway bunkers. How you want the fairway bunkers to play in my mind is a different issue than the greenside bunkers.
This is all I think healthy, positive for the game, to have this discussion, to have this focus on variety in setting up a golf course, including raking of the bunkers. I think it's fair game. I think a lot of players feel that way.
Now, having said that, I was not comfortable in hindsight about the way we went about it. I think if we're going along with a certain philosophy for a certain number of years, it's only reasonable to inform the players in advance if you're going to make some major shift in that philosophy, allow them to take the steps, whether mentally or physically, in terms of practice or getting their heads together in terms of how to play.
Now, if there was one isolated thing, it might be one thing. But we have a pattern of setups. I think you need to tell the players. If we were coming to Avenel this week and we put every tee back 50 yards, I think we should tell the players that was happening. I think that's not unreasonable. I don't think there's anything unhealthy about having our players involved in discussions to that point. Not that they make the call, our rules team makes the call in most instances.
I don't have any problem with the application, the process. I think we should be a little bit more careful. Bottom line is, I think it was a reasonable, healthy exercise that stimulates discussion and focus on different parts of setup philosophy that can contribute to challenges that are good for the competition and also interesting to the spectators.
Q. Back to the issue about the fall. My understanding is that if it does happen, it would likely be right after the Ryder Cup or Presidents Cup. Is that assumption correct?
COMMISSIONER FINCHEM: I would say yes with an asterisk. We're headed in that direction, but that fall schedule has yet to be nailed down. While I will say generally yes, if we are successful here in Washington in getting this done, you see a different date, I don't want you to think I misled you. We are focused on that early week, yes.
Q. Assuming that is the case or close to it, we're talking about a tournament that's going to be held very close to one of those competitions, you're talking about an event that comes after all the majors, after your FedEx Cup. What makes you think at a time of year when players traditionally, the top players, do not play in a lot of events in the fall, what makes you think you can have a first rate event without Tiger, Vijay, Ernie Els, who we both know are probably not going to come because they've never come before?
COMMISSIONER FINCHEM: I think the attitude on the tournament folks, Washington Golf Charities, their tournament organization, was that in just looking at the schedule, they felt strongly that you've got while what you just suggested is a negative, and a way to combat that of course is to put together the best possible event you can. On the positive side, you've gone now multiple weeks when a huge number of players haven't played at all. That to them was compelling.
But, like I said, we're not done with the schedule. It depends a little bit on a couple of other holes that are being filled in the fall event. We frankly have some flexibility in that regard. I thought we had an outstanding week the year we played very late, the year the Olympics were in Australia. We played The Presidents Cup well into October. So we have flexibility in that regard.
I think once we understand what our options are with respect to which tournaments we have, we'll sit down and hammer out a schedule. As I said earlier, don't hold us to anything at this point.
Q. The next Presidents Cup in the US would be '09. The date nor the venue has been selected. Every Presidents Cup in the US has been in Washington, D.C. Do we know any more about that? If there is a fall event in Washington in '09, would it preclude you having a Presidents Cup here?
COMMISSIONER FINCHEM: It would not preclude it. However, it could affect it in the sense that if we I suspect, by the way, the time frame of the Presidents Cup decision for '9 will be sometime in the first half of '7. You know, I think depending on the sponsorship and organization of a fall event in Washington, we'd have to work with that tournament structure, including a sponsor, in terms making that decision. We wouldn't make it in a vacuum.
We've looked at this every time in the past. We've never committed ourselves past the next US Cup. We've always ended up coming back to RTJ just because it's worked so well in the past. It may very well end up being that way regardless of the tournament structure. It's certainly something we would want to talk to the new tournament structure about before we made a final decision.
Q. Is there an absolute drop dead time in which you've got to get this fall schedule out for next year? How much longer can you wait before you put together that schedule and announce that schedule for '07?
COMMISSIONER FINCHEM: Well, we haven't set a drop dead date. I think realistically sponsorship will probably have to be identified by the end of the third quarter at the very latest because beyond that companies are finished with their '07 budgets and the rest. The other thing is that that allows everybody reasonably close to a year to promote and plan. It's hard to imagine a situation that would go past the middle of September at the very latest. That's still 90 days away. I think that's the latest.
The only thing I would say on that is if we were in discussions with a title sponsor, they were comfortable in taking their time to finish things up, we still wanted to hold off, it's possible. I would have to say at the very latest, soon after Labor Day.
Q. When 84 Lumber pulled out, was there any thought of coming back to DC and saying, We have a slot? If not, why not?
COMMISSIONER FINCHEM: Because of the date structure. It was after the Open. That was the primary reason. We felt like immediately after the Open we would run into the same difficulties. We'd be right where we are now. Frankly, we didn't think the prospects of a new sponsor in that environment would be much better than what we have for the fall.
I think it's important, again, to recognize that we've organized now five solid events for the fall series. There are companies that like what can happen in the fall. There are markets that like what can happen in the fall. We hope to find the right fit for enthusiasm for DC. It was unfortunate when 84 Lumber changed direction. Very surprising to us. But they had their reasons. They've been very supportive. That is what it is. It didn't change our thinking about the fundamental situation we face here.
TODD BUDNICK: Thank you very much for your time today, Commissioner.
COMMISSIONER FINCHEM: Thank you, Todd.
Ladies and Gentlemen, if you need additional information, we're available to you. I know a couple of you have called in the last couple of weeks. I've deferred those conversations until I had an opportunity to make comments generally today. In the aftermath of this week's tournament, I'd be happy to make myself available or other people on our team. We'll have more to say about Avenel here very shortly after the public hearing.
In the meantime, I would encourage you to cover this week's tournament. We have a lot of great players there, good golf course, we're looking forward to a good competition. Thank you.
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