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CHARLES SCHWAB CUP CHAMPIONSHIP

October 26, 2006

Rick George

SONOMA CALIFORNIA: First Round

RICK GEORGE: Thanks everybody for being here and being on the phone. I guess as we look at the year, we look on the a year that we think has been very positive from start to finish. Loren Roberts starting the year out with three wins right off the bat was a good story. And kept the momentum that felt like we had from 2005.

Middle of the year, Jay Haas, wins 3 times and we're starting to go back and forth on the Charles Schwab Cup race between those two. Jay just got the gold bib in the last two weeks. That's been an exciting race. We've had 8 new winners this year. Some came with really good stories. Jerry Pate playing at the Outback Steakhouse Pro Am. I'm diving in the lake again. I don't know why he did that. But I guess he had done it one other time. That was a good win for him. He hadn't been in the winner circle.

I think Tom Kite, went in twice this year, was good for us. Fred Funk winning last week. Maybe that will entice him to come out and play more. That was a great win for Fred. I know there was a lot of pressure on him. Andy Dean finally getting back into the we winner's circle was great for Andy and great for the Tour. John Harris who had a great win at the Commerce Bank Championship, I believe it was and David Edwards.

We've had great competition. Our scoring average continues to be on par and I think it's becoming more competitive out here and the guys continue to raise the bar on the game. Our scoring average continues to improve every year. Our golf course link, everybody always asks that question. It was very similar to what it was last year. 6950 yards is what we play on average. Ten we play ten to twelve courses over 7,000. About five or six in the 65 to 6700 range and the rest in between there. Played on good golf courses.

Allen Doyle had a terrific U.S. Senior Open. Was great for the Champions Tour to see him shoot I think 64 on Sunday to win which was great for Allen and great for the tour.

We had 18 different winners and we anticipate that we'll hit ten million in charity again for the third year in a row, which really speaks to the health of our tournaments financially. We point to that quite a bit. It's important to us. We wake up and go to bed thinking about charity. We think it shows a lot about the health of our tournaments by charitable money that we're able to give every each and every week. We think that's positive.

So we finish the year on what we think is a very high note going into 2007 with some very key players coming to play this Tour. We happen to think we have a lot of recognition with the players that we've got, particularly in this week's field with the Watsons, the Irwins, the Kites, the Stadlers, Jacobsen who couldn't play but was here earlier in the week. But next year really starts the next 3 to 5 years of really quality name players that are coming on the Champions Tour that are going to add to the players we have. Mark O'Meara will start the year on the Champions Tour. His birthday is January 13th. Nick Price turns January 28th. I anticipate that both will play regularly, full time. I think comments we saw this morning in Tampa from Nick was that this may be his last PGA Tour event, and he'll play out her full time. So we think that bodes well for this Tour. Sevey (phonetic)turns in April, and we have every indication that he's going to come out here and play this Tour. Nick Faldo turns in July and we have every anticipation that he probably won't play this Tour, thanks to our partner over at the Golf Channel , and others. But it's good for Nick. If we see him for a few events that will be great, but we don't anticipate seeing him a lot.

Bernard Langer turns in August. We think that's going to be really good when he turns. He'll be eligible for about six or seven events towards the end of the year, and then Jeff Sluman and John Cook are both going to play.

And then in '08 we get some more names. So we think this starts the growth. Our tour is very healthy. We are at 29 events. We anticipate an announcement in the next couple weeks of the 30th event. We've completed our schedule very early, for us. As you know, it's been December since we did that. We anticipate that by the end of the year we'll be at 28 events that will have committed for 2008.

We hope to solidify our schedule early in the year next year so we can start focusing on nine and ten and start block scheduling that way. We had eight or nine renewals this year, which speaks to what our players are doing and what this Tour is doing for our title sponsors.

We picked up three new sponsors. The GHIN Championship is going it be a great event in the Palm Coast area, Hammock Beach. It is going to play for a $2.5 million purse at a new Tom Watson designed golf course called The Conservatory. Principal is going to be our title sponsor in Des Moines. As you're aware, we moved Alliance down to the first event in Florida in Boca. It's going to be a great golf course. A great area for our Tour to be in that time of the year. Really solidifies the early part of our schedule.

We really have two objectives with the schedule, three really. The first is separating our Majors. We've done that. Our number one priority was solidifying the early part of our schedule. The first being that we separator majors. We've done that in '07. We're excited about that. We also our No. 1 priority was solidifying the early part of our schedule, and we've done that getting Alliance down to Boca in that time of the year.

And then the third objective that we had is that we wanted to play on quality venues in our Majors. And while we don't have a lot to do with some of them, where they play, to be able to play at Hualalai, to be able to play at Whistling Straits, Nearfield, Cross water in Sun River in Sun River, moving the Jeld Wen Tradition , and then ending the year at Baltimore Country Club. We're excited about where we're playing those venues. We think it adds to the quality of this Tour.

The other thing that was important in that is that all of our Majors will be on network for the first time. We think that's very important for this Tour. You know, we been asked a question before about, Well, do you think you have too many Majors? Well, I think we do if their within a four week period. But I think if we space them out I think they'll take on more significance. As they go to network, we think that's going to be great for this Tour.

Our purse level next year will be at about will be over $55 Million, when we get the 30 events, which will be an average purse of $1.86 Million. Again, that's a record for the Champions Tour. The one tournament that I failed to mention that we added to the Tour schedule was the old BC Open, now called the Dick's Sporting Goods Open. I was up there for the press conference, and it brought me back in time, but it was a lot of fun. That community is going to be really engaged in that event. We think that with Dick's Sporting Goods we'll be able to elevate that event quickly.

It's been a good year. We've talked about our network and our TV numbers have been down slightly. It's one piece of what we do. It's not the over arching thing. So we don't measure our success or failure on any one thing alone. But as a combination of everything, our attendance continues to grow. That's going to be a real emphasis for us in 2007 and beyond. It's been an emphasis for us. It's one area that we feel that we need to improve on each and every year at a higher level, because we want our players to come out and be in front of a lot of people.

So we're going to work on that as we move forward. And we also thank or new partnership with the people at the Golf Channel. It's really positive for the Champions Tour. As I've said before, we think it's going to elevate all events and particularly the Champions Tour, Thursday broadcasts.

Whether we play before or after the PGA Tour on Friday we think it's going to bring more eyeballs. That relationship is going to help rise all boats. We think the Golf Channel will grow fairly quickly, and just by the sheer nature of the growth, attendance being probably the most important thing, but I think our tournaments and our tournament directors have worked very well with us to make our tournaments better.

I would like to think when you go from a PGA to a Champions Tour event the presentation is as good as theirs. Where I think we don't do as good as them is we're not on network week to week, and that's something we're going to work on.

Questions.

Q. (Inaudible.)

RICK GEORGE: I can, and it's really pretty easy. It has to do with eligibility. When you make the top 30, you're guaranteed you're going to be in every full field event next year as No. 30. And there's an a lot have benefits to that. There's benefits if you're in the top 24 you maybe don't have to play in both Pro Ams Wednesday and Thursday. And so if you bring 31 in and 31 has a great week or wins and it surpasses them, it bumps somebody out of that security that they went into the season playing for to be in that Top 30. So that's why we did it.

Actually we've got a great marketer here today, David Greer (phonetic) who is the old club champion here. But that's why we do it. We would certainly like to have Peter in the tournament, but we don't think it's equitable for those guys that play all year to get to that point in the Top 30 to bring somebody that didn't qualify to come in and potentially bump of one of them.

Q. (Inaudible.)

RICK GEORGE: The selling point for the Champions Tour, and what we're out there selling, is that what we do for title sponsors is better than any sport. And we really hang our hat on being the best business to business marketing opportunity in sport. Because our players get it. They do a great job of engaging and interacting with the title sponsors, their clients, their customers. Engaging with the fan.

We want to be very interactive in engaging with our fans and the people that come out. So we bring them inside the ropes in our Honorary Observer Program, we let the ropes come down on 16 behind the lead group. We do things during the course of the week: There's the Caddie for a Day, all the things that the players do, that's what question hang our hat on. That's what we're selling.

We're also selling a competition. We want it to be a competitive golf Tour. But at the same time, we want it to be very interactive and engaging for the clients, fans, and title sponsors. You'll see some thing that we do, like we had Johnny Bench and Roger Clemens last and we had two three somes in the course of our we put them in the sequence of our tee times. We do some of that, which is a little bit different, because we want to get into that entertainment mode. It helps bring some people that may not come to golf events and maybe to get them to support what we're doing.

So our selling point is what our players do. It's been very effective, and that's why our titles are renewing at tremendous rates for long periods of time. Because our guys do a great job. I set up there yesterday and watched Loren Roberts for an hour having lunch with his armature partners. If you sit up there you'll see our players up there interacting with those people. So that's what we do very, very well. And that's why we've had the success.

And as we continue to or tenants, and when we get that where we want it to be, and when our numbers get to where we want them to be on TV, we hope that will be in the very near future.

Q. (Inaudible.)

RICK GEORGE: You know, we'll look at it. And as we continue to work with Charles Schwab and Price Waterhouse Group, we'll look at it. We have a two year extension through 2008, and we'll look at it beyond 2008. We like this area this time of the year. We think it's a great place for the players to end the year. So start in Hualalai and end in Sonoma doesn't get better than that.

This golf course has gotten so much better from the first year to now. What they've done to the clubhouse, and I think we're starting to get the community support. We have a really good tournament director here in town , Leon Gilmore (phonetic.) Leon has done a really tremendous job Marin County, northern San Francisco, and trying to get people up here to attend the event.

That's probably the biggest challenge, but something as we move forward and Leon has done a great job of addressing that. I think year two under his leadership is going to be much better than what you're going to see this weekend.

Q. Is Schwab's agreement with (inaudible.)

RICK GEORGE: They're concurrent at this point, yes.

Q. (Inaudible.)

RICK GEORGE: It really came up after that time. There was no promises made that we were going to have an event there. Our focus we essentially had one date in the summer, and we had we talked to a number of people about that one date. I'm sure you know Alex very well. He's very persistent. He got all his ducks in a row. We had some concerns up there because of the last two years, the history that we have. We're playing essentially in the same time frame with the flood that they had last year and the year before, so we had some concerns there.

But we just had our egronomist and our rules official up there this week, and all systems are go. We're really looking forward to it. We think that after being at that press conference, that that can quickly become one of our best attended events.

People that we talked to up there were excited about embracing the Watsons and the Kits and the Stadlers and people that have had some great success. We have nine or ten players today that have won there in the past, and Fink is one of them.

But it kind of evolved after that. Once the Tour and BC Open made the decision that they weren't going to play the PGA Tour, we started discussions about the Champions Tour.

But while we would love to play there, you know, just like anybody else, you need to have a toggle sponsor first. Because there is a lot of courses that would love to have us, but until we debt get that first piece and having the title sponsor, we didn't feel like we could move forward.

So when that happened, obviously we weren't able to get sponsorship in Kansas City , so essentially they took their date. Which is tough to do, you know living in an area where Tom Watson is at, and Jim Colbert right down the street in Manhattan. And we've been there for 14 years but we have very few dates available the way we schedule. They way we schedule is three weeks on, one week off, four weeks on, one week off.

We try not to play opposite the PGA majors, and what's that's done for us is we've looked at our strength of field. We're averaging 25 of or top 30 playing every week, which is good. So we're essentially guaranteeing the field.

Q. (Inaudible.)

RICK GEORGE: Uh huh. I'll tell you, it's very frustrating. Because I think we've got one helluva product. When we're on site, I think people sometimes take shots because they look at things. But when you attend or Tour on a year round basis we do some really good things. We've got some tournaments that are really stepping it up. But there is a buzz in that community when we're in town.

Is it in every community? No. We need to get it there. We told the tournament that this Tour is only as good as the weakest tournament. And so we keep continuing to raise the bar with our tournament directors, and I think Outback has done a great job, I think 3M. There are a number of them we could talk about, because we do think how can you say you don't have name recognition when you have Tom Watson, Tom Kite who are Hall of Famers, Peter Jacobsen, Craig Stadler.

I mean, there's a ton of names. But sometimes we focus on the things, the negative things that are easy to focus on. We think we've got a great product. Are we where we want to be? Absolutely not. We do want better attendance and more viewership in our broadcasts. But we have a great product. If you talk to our sponsors, they'll tell ya, Shoot we're in this thing because it's working for us.

Q. (Inaudible.)

RICK GEORGE: Yeah, I mean it's like anything else. A lot of our alumni focussed on who we didn't get instead of who we got. Who we've got is pretty damn good. Greg Norman is not out there. So what. We're okay. Our sponsorship base has never been better.

Fred Funk is not playing. That's fine, but when he comes over here he's going to be great for this Tour. And when you get guys coming on next year that we have, I think it's arguably one of the best classes this Tour has ever had. And then you get Fred Couples who's going to move in 2009. I think as you look towards I mean, all of the people that the baby boomers have followed are coming on this Tour in the next 3 to 5 years. I think what we've done is put this Tour in a position for growth, because, you know, in 2003, you know, we were just coming out of a TV relationship, you know, everybody figured out Jack and Arnold weren't playing as much, and Chi Chi wasn't playing as much anymore.

So what we did is we rebranded the Tour to an area where we thought we had a place in the market. And we found out three, four years later than it does. In their business is outstanding. Just ask them. And we've been very successful in that. It's really frustrating, Bill, and why do we have to write that? Again, we're not perfect. We know that. But it's getting better.

Q. (Inaudible.)

RICK GEORGE: I think it's a combination. You know, and every sponsor is different. Some of them want to entertain their top customers. And they think a great way to do that is to have them play with a Champions Tour player and have our players drop by their tent. So some of it is that, and some of it is incentives for their salespeople. Some of it is for branding. They want to display the products. So everyone is different.

And our challenge and what we do with our TBA staff, we work with our tournaments and our titles to find out what their objectives are, because they're all different. Some of them just want a full vendor outing to thank them for what they've done. Wal Mart wants to do it to give back to charity. That's a great way for them to give back, and they've been able to give a $1 million. That's what they want. They want to impact children's lives. That's why young kids are out playing with our players. It's a great platform for them.

All of our sponsors are different, and our challenge is to make sure that whatever their goals and objectives are for their sponsorship we've got to meet that. I think we've done a good job.

Q. You been talking about, you know, players kind of not coming over right away playing the PGA Tour. What do you think you can do to entice them to come over?

RICK GEORGE: It's part of our strategy. We've got an educational and informational platform that we get out there and talk with the PGA's as I call them, the old young guys. You know, we go out and talk with them and educate them on what we're doing.

I think it's really difficult anymore to assume that the guys are going to come out here and play right away. That's one of the reasons we're looking at (inaudible) of our all time money not making an adjustment until a player comes out here and plays six, seven events. Because we want to make sure some of these guys aren't coming right away. We think that's okay.

We think when they're on network and talking about Fred Funk on the Champions Tour, that's good for us. Because there's a number of eyeballs that are going to see that and see Fred's association with the Champions Tour.

And I think as we move forward, I think you're going to see more players that are going to play both Tours. I don't know if there's anything we can do to entice them other than having a great event for them to play and playing on very good golf courses. I think that's what will entice them more than any kind of recruitment that we do.

And as we continue to elevate this Tour, we need to address the attendance. We know that. We think that that's another way when the players come out here and they've got the sense of bigness, and they're playing at a good golf course, that we think they'll play. So there's some areas we've got to work on.

But there's nothing other than playing on better golf courses and continuing to make or tournments better that's going to get them to play, and so that's what we're focused on.

Q. Is there any plan to bring a Champions Tour to Philadelphia?

RICK GEORGE: That's a market that we'd like to be in. We've talked about Philadelphia a lot. As we look at the schedule in the future, it's certainly one of our targets on our radar screen.

Q. You mentioned earlier about Jerry Pate winning, and he certainly he is certainly a guy that interacts well with sponsors and fans. How tough was his season ending injury? How tough was that for him as well as for this Tour, was that to absorb?

RICK GEORGE: It's always tough to lose a player of Jerry's name and quality. And Peter Jacobsen is the consummate I mean, if you talk about a person that you want out here that engages with fans and sponsors, probably at the top of your list you would say Peter Jacobsen every time.

So losing Jerry after the Ford Senior Players was tough tough, and it was tough decision for him. We talked about it at length. But he felt like he needed to do it so he could be ready to play. I mean, he was probably playing as good a golf as he's played in years.

It was a very difficult decision for him to make, but he think it's going to make him better for 2007. Peter struggled and tried to play at the Jeld Wen Tradition. That was an extremely difficult decision for him because that's in front of his hometown. So it hurts, it certainly does. But I also think that we've got enough names on this Tour that we can overcome that, and I think we've have.

Q. And in just the short time he was on the Tour, what impact do you think that Jerry made with all of the things that you're trying to do.

RICK GEORGE: He's made a huge impact. I think it was huge. Jerry attended a lot of golf parties , he went by sponsors' tents. He obviously competitively he was in the Top 30 every year. So I think he had a very big impact on what we're doing. And I think collectively as a group when you get all those stars out here and get them playing every week it makes our Tour better.

Q. (Inaudible.)

RICK GEORGE: I think you'll find that McNulty and Nick Price have talked quit a bit. I mean, Scott Simpson, you know, talks very highly of this Tour, and he's been out here just over a year.

And Loren Roberts being the assistant Ryder Cup captain. Him talking to those guys while he's out there playing the other Tour. That's why I don't know it hurts us.

I think when the guys are playing both Tours they can go share their experience being out here, and it's pretty the doggone good out here. Our tournaments do a good job of taking care of players. They're playing good courses. The camaraderie is good out here. A lot of the players travel with their wives, and they couldn't when they were younger on the PGA Tour.

With the FedEx Cup coming next year, I think that's going to be good for golf in general, but I think it's going to be good for the Champions Tour. I think it's going to be good for viewership. It's going to increase. Again that's going to help our boat rise again.

I just think there's some great things coming in golf, and you know, the Charles Schwab Cup point race has been a great mechanism for us, and it's a great race this year. It's a two horse race. Last year I think there were 13 in the mix when we came here. This year, two guys from the start of the year to the end have performed very well.

Q. Can you just address the qualifying changes? (Inaudible.)

RICK GEORGE: Actually, it's interesting, Bill. We just completed our application process, and we've got a few more applications than we did last year with the olds system that we had. And we're going to look at it very critically, just like everything we do. It's something new; it's something that the players felt would help the Tour; and we're going to look at it very critically.

My biggest concern is how it affects our tournaments on their Monday Pro Am. That's a big concern of mine. Arguably you'll see some maybe some more names of PGA Tour players that will be able to play on those Monday s to qualify. We think the stories that it may generate early in the week is going to be good.

There's a lot of positives to it. And we really just got to get through it and see how it is and see how it works. We may do some qualifiers on Tuesday, but that concerns me a little bit. If they have a good Monday and if you get some rain, and how it affects when you draw part of that because it's so important to this Tour. So it's just a lot of moving pieces. We just need to keep our nose to the grindstone and make sure that we look at it very critically.

If it doesn't work, then we're going to make adjustments. But, from the early applications that we've got, it's very positive for those people that want to try to do it, because of the response that we've gotten.

And arguably, you can say that 30 and ties is going to bring a lot of people that don't have PGA experience to that Monday qualifier.

Then you got the local qualifier the week before that's going to add more than six players to that field. So there's going to be a good mix of competing.

Somebody said, Well, it may be the best 50 year olds in the world trying to compete. Which it may be. We'll see.

Again, the concern that I have is that will the international player come over and qualify? We'll have to look at that and see what that does.

Q. Is there an international player on the docket this year that has or has not signed up that you're aware of?

RICK GEORGE: Not that I'm aware of at this point. That's something that we're going to look at very closely. Like anything else, if it's not working in the way that we think it will, we'll make adjustments.

Q. (Inaudible.)

RICK GEORGE: I don't know the exact numbers, but I can get them for you. But it's better than what it was last year by a few. Not by much. But, again, you have to remember that a lot of the guys that were on the Champions Tour that had to go to the final stage of Q School, they don't, and the numbers are still higher.

Q. (Inaudible.)

RICK GEORGE: The right time, the right place, the right time of the year. He continues to grow ever year. It's probably one event that gets as much exposure as any because of the uniqueness of that format. And where we're going with that in the future is that all of juniors will be first tee kids. Hasn't been that way because we've done these qualifiers around the country.

And in the very near future, maybe even by '07, all of our participants will be first tee kids. They're there based on the way the write the essay, the way they're interviewed, the way they handle themselves throughout the tournament week that they have. So there's a lot of different factors that get in.

But we don't duplicate the event. Don't have any intention to at this moment, unless Wal Mart came to us and said that they would liked to that. But we don't anticipate that happening.

End of FastScripts.

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