August 21, 2002
JAMES CRAMER: I'd like to now introduce PGA TOUR Commissioner Tim Finchem who has taken time out of his busy schedule to give us an update on the World Golf Championships.
COMMISSIONER FINCHEM: Thank you, James. Thank you all for being here this week and attending the NEC Invitational.
I'd just like to make a few comments about this week, a few comments about the state of play with the World Golf Championships generally, and then I'd be happy to take your questions on those subjects or others.
First of all, we are delighted to be here at Sahalee. The improvements to the golf course, the work that's been done on the golf course over the last few years, is quite evident. I was here in April and with clubhouse improvements and the improvements on the golf course, we seem to be ready for this championship. I was just out talking to a number of players, and they are delighted with the condition of the golf course, and they think the venue is appropriately presented for a World Golf Championship.
When we announced the World Golf Championships some years ago, we did so with the intent of altering the competitive landscape at the PGA TOUR level in the sense that we wanted to create some more opportunities for the best players in the world to come together and compete, perhaps in slightly different formats. As we look at where we are now, coming close now to the end of the first four-year period of that, we look at the major championships, THE PLAYERS Championship, the Ryder Cup, the Presidents Cup and the World Golf Championships as those times during the year when the world of golf comes together, and we are pleased with that mix. We think it's an appropriate mix. It runs the gamut of the year. It includes team competition and it includes match-play competition and it includes full-field events. It includes some very distinguished invitational events, and it has gradually become more and more a fixture in the golf landscape.
Of course, we are particularly pleased this week that all of the 78 players who were eligible for the event are here. I think that speaks a lot to the import of these Championships.
I know there's been some discussion as we talk about the venues that we use. There's been some discussions about the fact that in 2003, all four of the World Golf Championships will be played in the United States. That's true, and there are reasons for that.
But I think in terms of the overall mix, if you look at the last 50, 60, 70 years of golf competition, 75 percent of the major championships have been played in the United States, 25 percent are played overseas, which is the British Open.
As we look at the international competitive mix, we include the Ryder Cup and the Presidents Cup and the World Golf Championships, and during this eight-year period, the last four years and the next four years, somewhere in the 40 percent range of these total Championships will be played outside of the United States. Frankly, we are less concerned with where they are played and we are more concerned about the international flavor of the field and the television presentation worldwide, but we are concerned about where they are played. We want them to be played around the world. We are delighted that we have been now, through the end of this year, on five different continents and seven different countries, and we will continue in that direction.
We are obviously pleased, especially in this economic environment, that our sponsors for the World Golf Championships, NEC the sponsor this week; Accenture, the sponsor of our match-play championship; and American Express, the sponsor of the American Express Championships to be played in Ireland in a few weeks, have all renewed and committed their sponsorships to the 2006 season.
EMC2, the sponsor of the World Cup team competition, has already signed through the 2003 season, and their sponsorship is not up for renewal just yet.
With regard to the World Golf Championships post-2002, a number of you have asked about the future of the purse structure. I'm not going to announce purses now because we are still working on those, but purses over the next four years will continue to grow at some level. We continue to believe, generally, from the philosophy of purse structure that, while prize money on the PGA TOUR has grown and prize money in the World Golf Championships has grown, that our athletes as world-class athletes still earn significantly less than world-class athletes in other sports. That's not to say that our total focus, however, is generating prize money.
We are delighted that these World Golf Championships events contribute heavily to the First Tee initiative, on a national and global basis, as well as to the First Tee initiatives locally. We are pleased that the First Tee effort here in the general Seattle area is making the strides that it is toward bringing accessible, affordable golf to kids, especially kids who heretofore have not had the opportunity to access golf.
We intend to continue the charitable tradition of the PGA TOUR, continue to grow charitable contributions. We are just a few years away now from when total charitable giving on the PGA TOUR historically will surpass the $1 billion level.
As far as First Tee goes, we are delighted with the progress of First Tee and that by 2005, we will have reached 500,000 kids in the United States. We see First Tee as a vehicle to be used globally to make golf available and accessible to kids.
Now, a few comments about each of our World Golf Championships. As far as the Accenture Match Play goes, we are happy to announce today that the championship will be coming back to the La Costa resort for the next few years. We think that the Match Play Championship has really taken its place among the World Golf Championships. It has renewed the interest in match play, the uniqueness of match play, why match play is different, the pluses and minuses of match play in the eyes of the fans, but certainly a lot of interest and enthusiasm among the fans, which has been growingly evident, based on their reaction to the telecast, as well as their enthusiasm and participation in the internet activity that surrounds The Match Play Championships.
The NEC Invitational, this year, this week, Tiger Woods certainly, is a major story, since he's won this championship three years in a row, and he has the opportunity to join Walter Hagen and Gene Sarazen as the only players to win the same event four consecutive years.
We are pleased to announce that the NEC will be returning to Firestone for at least the next three years, and we are delighted with our relationship with the Northern Ohio Charities and all of the work they have done there, and we are looking forward to renewing that relationship.
The American Express Championship will be in Mount Juliet in Ireland this year, a Jack Nicklaus designed course that's hosted the Irish Open a number of years, and we are delighted that all of the best players in the world will have an opportunity to play in Ireland. And that's not just because I'm Irish. (Smiling.)
We announced that the 2003 American Express Championship will be played in the Capital City Club in Atlanta. The 2004 event will return to Europe. We are in discussion with three or four different venues for 2004 and 2006, and we will have more to say about that in a few months.
The EMC2 World Cup will be played in Puerto Vallarta at Vista Vallarta, an excellent golf course. The first two years of that reconstituted World Cup has been most successful in Argentina, and particularly in Japan. In fact, I've had a number of people in the Japan business community and media tell me that it was perhaps as good an event as there has been in Japan, from the standpoint of its execution, management and profile.
We will play next year at The Ocean Course at Kiawah Island, a terrific test, and we will be announcing the 2004, 2005 and 2006 location in the next few months.
To summarize, thank you for being here. We are delighted with the progress of the World Golf Championships. I think when you look at golf and you consider that when Arnold Palmer won the Masters in 1958, the Masters was 23 years old. It takes a while in golf to develop the stature of these events, or any new events, and I would submit that now, just less than four short years, the World Golf Championships have taken their position as part of the landscape and the platform has been established and they will continue to grow going forward.
I'd be happy to take your questions on these or other issues.
Q. Would Sahalee be in contention for anything in the future still? Is a possible return here for this event or any of your others?
COMMISSIONER FINCHEM: The answer is yes. The more difficult part of the answer would be when and how.
You know, there are four or five markets in the United States where we don't play that we'd like to on a more regular basis. Portland and Seattle are on that short list, along with probably St. Louis, Minnesota, and Boston, and there may be a couple of others.
The challenge is creating the event, working it into the schedule. I think there is some fluidity in our schedule going forward, but in this economic environment, a lot of change, there's going to be some change, but a lot of change also comes with difficulty.
I can't say when we will play in Seattle. I can only say that one of our objectives in scheduling the NEC Invitational here was to learn more about the marketplace here, how an event could be positioned, what steps would be necessary to create the community support necessary and the appropriate community beneficiaries, and we will now evaluate all of that and work on a scenario.
All I can say is it is a reasonably high priority for us to play in the Northwest, and to get PGA TOUR golf better regular exposure in a signature part of our country, not only from a size standpoint, but from a standpoint of the interest in the game that is in the Oregon/Washington area.
Q. In the program, it says "World Golf Championships", "world" golf; yet this won't be so next year, and I think there will be some disappointment outside of the United States that it won't be. You said there were reasons for that. Could you expand upon those?
COMMISSIONER FINCHEM: Well, there are scheduling reason, sponsor reasons, venue reason, television reasons. There's a whole range of reasons that 2003 just happened to come about the way it did. Obviously, it's the -- well, it's not obvious yet, but it will become obvious that that's the only time that will occur in the next four-year cycle.
What I would encourage everybody to do -- and I understand there is some disappointment, especially in areas that feel like if we came and played there, it would be a superb event. When we have played in Australia, in Melbourne, it's just been phenomenal to be down there. All of the indications are when we play the Presidents Cup in South Africa next year, it is just going to be just superb. These are areas, and there are others, that feel like: "You should come play here, because you have such strong support and you're not here," and I understand that. We're just going to have to do the best we can.
But I would ask all of those interested people just to stand back and look at the broader scheme. Don't focus too much on one year, and give us a chance here to work through it. In the long term, I think we'll have a mix that everybody will be reasonably comfortable with. Of course, we'll never be able to satisfy what everybody wants to do, but I think we're moving in the right direction.
Q. With the number of events on the TOUR now and the difficulty in delivering a top-level field at every event, are you concerned about a two-tiered tour, and do you think that contributes to maintaining sponsors?
COMMISSIONER FINCHEM: No. I mean, I get that question a lot in a slightly different way. It has more to do with Tiger Woods and where he plays versus other places where he doesn't play, and my answer would be, I think, the same. And that is, that where Tiger hasn't played in the last four or five years, our tournaments are stronger today than they were then. Our television ratings, everybody talks about Tiger spiking television ratings. And you could make the same comment about World Golf Championship events have pretty solid television ratings.
But actually, our television ratings across the board over the last five years are up. Our audience is up across the board, our charity dollars are up across the board and our prize money is up across the board, in virtually every single week of our schedule.
Now, having said that, are volunteers and fans desirous of having every top player play an event? Sure, that's natural. But on the other hand, what's been demonstrated over the history of the TOUR, and certainly this period; that the fans and volunteers really support the quality of golf that the PGA TOUR delivers, and as a consequence these events perform quite well. I don't think it can be overly stated, the impact that most of our events have on the communities where we play, when this year, for example, $70 million will be raised for charities in those communities. So that's an important part of it. I think our sponsors and our volunteers look at it that way.
Now with respect to sponsorship, which was part of your question, no, I think that we are going to have more turnover in our sponsor base than any time, certainly since the 1990-1991 recession, and we are going to have more turnover.
But in no case has that turnover been a function of field quality. As a matter of fact, our field quality over the last five years is significantly stronger than it was in the prior five years. And why is that? Well, one reason is that today virtually every top player -- I say virtually. A very strong and high percentage of the top players in the world are members of our Tour. We have 50 players, members of our Tour, exempt players are who are from somewhere else, and that mix of players from all over the world has really created a situation on the PGA TOUR where we have significantly enhanced strength of field week-to-week.
Secondly, unlike five or six years ago, we get very few requests from our members for conflicting event releases to go play somewhere else. As a matter of fact, this year will be the fifth straight year we have had a reduction in the number of times players asked for conflicting event releases to go play an event on another tour. Now, I know that there's some frustration on other tours about that fact, but the reality is that the strength of fields across the board on the PGA TOUR are stronger than they have ever been and our sponsors relate to that.
The reason that we are having turnover is that there are some companies in this economic cycle that just cannot, given their significant cost-cutting measures -- when you are taking a billion dollars out of your cost structure and letting 10,000 employees go, a lot of times you conclude that it's not appropriate to sponsor sporting events, and so we have had some of that.
The good news is that we will be fully sponsored next year. We will have a lot of turnover, but we welcome that, and it actually will be a stronger tour because of the relationships we are forging in this environment.
Q. Can you comment on the status of the Vancouver event? It is my understanding that potential sponsors just informed the TOUR that it won't be stepping forward to sponsor that event. Will it be on the schedule next year?
COMMISSIONER FINCHEM: I'm not aware of that development, but I know there are a number of companies in discussion. I think it is a sponsorship issue in all likelihood.
First of all, the schedule next year is largely unaffected until Labor Day. I think that it would be highly unlikely that we will see any change in our basic scheduling structure until Labor Day.
From Labor Day on, however -- Labor Day, by the way is a new event structured intentionally for Labor Day with a Monday finish in which we have a number of options that we are wrestling with. But in the fall, it is conceivable that we will have two or three changes in our schedule. It's likely, but it would be premature for me at this time to conclude or predict exactly what they would be, and I would use that same philosophy as it relates to the specifics of the Vancouver situation at this point in time.
Q. Would it be premature to discuss some of the options you have for Labor Day?
COMMISSIONER FINCHEM: Yes.
Q. Would it be premature to ask what Labor Day is? (Laughter.)
COMMISSIONER FINCHEM: It's the last week before the NFL starts their official season. I'm sure that clears it up for you. (Laughter.)
Q. When do you expect to be able to announce the 2003 schedule?
COMMISSIONER FINCHEM: New Year's Eve. You know, somewhere in that range.
Seriously, I suspect we will announce it in phases. As I say, I think that we are very close to probably being able to announce everything on Labor Day, pre-Labor Day. There are a number of things going on with Labor Day and a couple of weeks after Labor Day that probably will preclude us from finalizing the fall schedule until a little bit later in the fall.
Q. The World Golf Championships, the ones that are played for official money, do they lose money when they are played overseas?
COMMISSIONER FINCHEM: No, I don't think so. They may have on occasion, but as a general rule, no.
Q. Do they make more money when they are played here?
COMMISSIONER FINCHEM: When you say an event makes money, in the broad sense, your question relates to all cash flow that relates to the event; that would include television rights.
If you say, does an event make money aside from television, from an operational standpoint, it's a different question.
I would not say they always make money when they are here. The market support here is very strong. Clearly, from a market-strength standpoint, this is the strongest golf market in the world for everything, whether it's golf balls, golf clubs or tournaments. It's the strongest market for sports marketing enterprises, generally, in a lot of sports.
But our events perform fine overseas.
Q. That would not be one of the reasons to have all of them here next year?
COMMISSIONER FINCHEM: No. There are other issues; television schedules. As I said earlier, on this question of being critical, I've heard some criticism, for example, that it's not healthy for all of the top players to come and play this tour from the standpoint of -- and I've heard the criticism made in the context of creating interest in the game. I would challenge that premise, and the reason is television.
The reality is that when Sergio Garcia plays on this tour, he's on live in Spain that evening. The television penetration that we have emanating from the United States is very, very powerful. It's well-packaged and it's got huge distribution worldwide. So in terms of the overall stature of an event, it's just by coincidence that the three of the major championships are in the United States, for example.
So there are television issues, there are sponsor issues. It's less a dollars and cents issue, to come back to your major point, than it is a combination of things, in terms of what fits in what years and what's available.
Q. You mentioned AMEX is going overseas in 2004 and 2006. When you say that next year will be the last year for everything being in the U.S., is it possible that the only WGC event outside the U.S. will be the World Cup?
COMMISSIONER FINCHEM: The year that AMEX is here, which means -- you mean after 2003? You mean in 2005? I don't know about that at this point. It's possible. It's possible.
Q. Getting back to a sponsorship issue. The game is very popular with the fans. I know one of the problems with Vancouver is they wanted a guarantee to get more of the top players there. You, as a commissioner, cannot force these guys to physically go there and play, but are you looking at options to get them there somehow, i.e., trying to maybe cap purses, downsizing some of the schedules? Because by Labor Day, a lot of these guys have made so much money, they don't need to go to Vancouver, they don't need to go to Reno. Are you looking at options like that? Some of the players maybe say it's time to cap some of the purses, make it more affordable for sponsors.
COMMISSIONER FINCHEM: But they do go to Vancouver. Vijay Singh is going to be in Vancouver.
We have good fields across the board. As I said earlier -- maybe I'm using too many words here. We haven't lost a sponsor since I've been Commissioner because of field quality.
Q. What we are hearing in Vancouver is the potential sponsorship is not there because they cannot get a Tiger Woods or a David Duval. Yes, Scotty McCarron and Fred Funk are great --
COMMISSIONER FINCHEM: Air Canada was the sponsor of that event, and the reason they left had to do with what's going on in the airline business. It wasn't because of who played in the event last year. I'm just being straight with you.
The reality is that from an operational standpoint, with the field quality that we are delivering, we have more stars every year; it's been the history of the PGA TOUR for 40 years. We have Pro-Am contestants who are very pleased with the partners they get. Our ticket sales are up. Our charity dollars are up, and our gross revenue at the tournament; and that's not just one week, it's across the board.
So I don't feel the need to impel players to play certain weeks at this point in time on this tour. There may come a time when that's different, but right now, I don't see it.
Q. Maybe I missed the official explanation on this, but what was the motivating factor --
COMMISSIONER FINCHEM: That's because I'm giving the unofficial explanation. (Laughter.)
Q. What were the motivating factors that went into changing the eligibility requirements so that the field of this event would double?
COMMISSIONER FINCHEM: Well, in that case, there are a number. One factor was that the field was pretty small. We thought it would be helpful when we come to Sahalee to have more of the top players in the world playing, more golf to see. It helps the tournament organization and operation; that will be the case next year in Akron. Certainly, that's a factor.
Secondly, there has been in the last four or five years, a diminution to some degree of the impact of winning on the PGA TOUR. The Masters no longer recognizes tournament winners, per se. The old World Series of Golf recognized tournament winners, per se, until we changed the format.
So there was a fairly strong feeling on the part of the players that it would be helpful if more was done to recognize what they believe is the most difficult thing to do in the game, and that is to win and beat these fields. And so that was a factor, as well.
I think that when you look at this field, I think we are all pleased with the result. To have this field here is a good thing.
Q. Is another factor that this is more of an international field than it was before? Is that going to be a theme for the World Golf Championships eligibility in the other events? Are you going to change the format? Are there any plans to change the format?
COMMISSIONER FINCHEM: Not at this point. I think we are really comfortable with 64 in the Match Play.
Let me say, also, that eligibility for tournaments on our Tour, and I'm speaking about the PGA TOUR is something that we have changed every single year in the 15 years that I have been either Deputy Commissioner or Commissioner.
It's something that you look at, you study, you adjust and you get into situations where there's no right or wrong. The recent situation with Jeff Sluman, for example, where if Bob Tway doesn't withdraw from the event, his victory has him here. It's an unfortunate situation. I think that's something that we have to look at.
There are things still in the world rankings -- although the World Rankings are much improved with the changes we have made in the last four years, there are issues in the World Rankings that affect eligibility that need to be addressed.
So I think it works pretty well now. Can it be improved? I think it's something that we always have to look at and study and make sure we are being equitable and doing the best thing we can for the quality of the tournaments.
Q. Am I correct in saying that the three official money WGC events will be played in either the U.S. or Europe through the end of 2006; that all of the official money events will be in U.S. or Europe through the end of 2006?
COMMISSIONER FINCHEM: On the official money events, that's correct. I think that's correct.
Q. So have you basically made a decision that --
COMMISSIONER FINCHEM: I would say this: That's where we are headed. We have not made an announcement on the 2006 NEC Invitational at this point. We have announced the next three years. We have not announced the fourth year. But assuming that fourth year was in the United States, that would be correct.
Q. Have you basically made a decision that these events don't work outside the U.S. and Europe?
COMMISSIONER FINCHEM: I think I already answered that question. The answer is no.
There's a certain number of factors that relate to where we play, and those factors get us to this point.
We were delighted to be in Australia -- now, when you say play events, I also refer to the Ryder Cup and Presidents Cup. In the Presidents Cup, we had a great experience in Australia. We anticipate a terrific, terrific Presidents Cup in South Africa. We think Ireland this year is going to be tremendous. Frankly, I was pleased with The Match Play in Melbourne.
So, no, I think our experience overseas has been quite good, and we would anticipate it would continue.
Q. When these World Golf Championships were announced, with the purse at $1 million, a lot of the other tournaments on TOUR did not have the size of purses they have now, and there was more of a gap between the purses at these events than those events. Looking down the road, is it important to raise these purses for prestige of these events, to kind of re-establish the difference between the two, or do you feel that that's not important?
COMMISSIONER FINCHEM: I think it's a factor. I think that the PLAYERS Championship, THE TOUR Championship and the World Golf Championships ought to sort of set the bar in terms of reasonable prize money. I would anticipate that we would continue to try to do that, and I think that having done that, it has a positive effect on not just PGA TOUR events, where we have something to say about it, but prominent tournaments that we don't have much to say about it.
Q. You've said a couple of times now that you will be fully sponsored next year. Will you have the same number of tournaments that you have this year?
COMMISSIONER FINCHEM: Well, we will play the same number of weeks. I'm not so sure we'll have as many events opposite -- I'm not so sure we'll have as many two-event weeks, but we might. That's really a function of not so much sponsorship as it is resource allocation, things of that nature. It's possible. I wouldn't rule it out at this point.
Never say never.
Q. You hinted at this Labor Day possibility. Would that be for next year or 2004?
COMMISSIONER FINCHEM: In our television negotiations last year, we crafted, given the NFL's movement to the next week, we crafted a new tournament week, which would be a tournament that would end on Labor Day.
So it would play Friday, Saturday, Sunday and Monday. It will be on ABC television, and we are working on where we are going to play it and what the sponsorship arrangement would be and how the event would be structured in the community. I think Doug asked me earlier, can I mention any specifics; I won't. I will say that we are actively looking at three or four different markets, and three or four different sponsor relationships. Because we think it has the potential to be a pretty good event starting in 2003. We would be committed through 2006.
Q. Is Seattle in the running for that?
COMMISSIONER FINCHEM: I don't want to say yes or no to any market. As I said earlier, the Northwest is obviously a priority for us to get to. If this potential moves us in that direction, that's something we'll look very carefully at. But I don't want to raise any expectations or get ahead of ourselves. Let's just work through it if we could.
Thanks very much. Thanks for being here again.
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