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VOLVO PGA CHAMPIONSHIP


May 23, 2002


David Manougian

George O'Grady

Ken Schofield


SURREY, ENGLAND

GORDON SIMPSON: Welcome to Wentworth Club for this very special announcement at the Volvo PGA Championship. I am delighted that we have with us today three gentlemen that will be familiar with you -- well, two will be, and so will this gentleman in a minute. We have David Manougian, President of the Golf Channel. We have George O'Grady on the far left there at the point, deputy executive director for the European Tour. And to open the proceedings this morning, we have in the center, Ken Schofield, Executive Director of the European Tour.

Ken, I will let you take the conference on the way.

KEN SCHOFIELD: Thank you, Gordon. Good morning, everyone. Gordon, you are quite accurate. This is a special announcement in what we all believe is a very special week at Volvo PGA Championship here at Wentworth Club. Welcoming David Manougian today, together with his colleague, Dan Higgins, the Golf Channel, gives us an opportunity not only to introduce Dave to a number of you personally and to make what we believe is a most significant announcement in terms of the extension of our contract and our commitments between the European Tour and the Golf Channel through 2007, but it gives us an opportunity to express some appreciation to Dave and his team; and indeed, if we may go back a number of years -- in fact more than 7, to be precise -- and to explain that, from the very outset when the founder of the Golf Channel Joe Gibbs, the first president and CEO, formed his friendship with Arnold Palmer, and devised the idea of having the Golf Channel in the United States, that the first reason that we felt a very strong commitment was that their view of the European Tour, prior to going on air, prior to having a household signed up, was that they made a commitment to the European Tour.

Dave, you know from George and I, the feeling of appreciation and respect we had at that time for the Golf Channel. It has endured since you went on air from Dubai, one of our truly great stops on our Tour, in 1995, and I think that brings us up-to-date today.

The two things that you have done above all else for us is to firstly expose to an ever-increasing American audience all of our European Tour membership playing in all of our many international locations. It's given followers of golf on television in the United States a view of not only those original wonderful select band of European champions that adorned Augusta for a number of years, but other players from those that rounded out European Ryder Cup teams and those who have joined our Tour from all over our world. It's taken them into the American households, and we believe made our players -- or made the appreciation of the play here on our Tour has come a very, very long way.

Also that it's taken great golf courses such as Wentworth Club and all our other venues into now, as we understand it, the possibility of around 50 million American homes.

Dave, I have said enough. Please feel welcome. We had absolutely no hesitation when George and Rupert Hampel will meet with you and your colleagues to determine to go forward even more strongly. We are very committed to your channel. We salute you. We wish you well. If I may, Gordon, I think it's my duty to hand over to Dave.

DAVID MANOUGIAN: Thank you, Ken.

As Ken mentioned, the Golf Channel launched in January of 1995. And one of the reasons that there's such a special place in our heart for the European Tour is the first live event we showed on our air was the Dubai Classic in January of 1995. So fast forward seven and a half years later and here we are talking about extending our partnership or announcing an extension of our partnership through 2007. We couldn't be more thrilled.

At the Golf Channel it's very important for us to showcase to our viewers golf from around the world. Golf is truly a global game, and that's one of the very important aspects of what we do. And when you look at the European Tour, and that product, we will showcase events from over 20 countries. We will showcase future stars, which is another very important aspect of this Tour. When you look at some of the wonderful names of winners of events that we have telecast, some of the names of people that won for the very first time on our network is quite a stellar list. People like: Alex Cejka, Mike Campbell, Thomas Bjorn, Sergio Garcia, Justin Rose, Adam Scott, Lee Westwood, of course, Retief Goosen. The first time the American public got to see these players win a tournament was on the European Tour and on the Golf Channel, and we think that's very special.

When you combine that with the fact that it's a great place for our viewers to see the current stars, last week's tournament was no exception with the great duel between Colin Montgomerie and Tiger Woods, the list of stars that our viewers in the United States and in Canada and Japan have been able to see win tournaments on the European Tour is a really truly amazing list of stars.

In going into Ryder Cup year, we are very proud that, again, everybody in the United States has been able to see all 12 of the European Ryder Cup team win events on our network, including the Captain, and so we know that the viewers are ready and informed and know how good a team that you all will be bringing to the Ryder Cup.

So with that, again, I'd just like to echo Ken's feelings that the European product is a wonderful, wonderful product. Our viewers love it, and we just very, very much enjoy the partnership that we have had over the years with Ken and with George and Rupert, and we are looking forward to the partnership going on for a long, long time.

GORDON SIMPSON: Thank you very much for these kind words, Dave.

George, anything before we go into questions? If you could, please raise your hand if you have a question so I can identify you. We will take questions from the floor.

Q. How many hours do you plan to broadcast in the next few years? Increase?

DAVID MANOUGIAN: We generally do anywhere from three to three and a half hours per day of live coverage and then we will reair that coverage either in prime time or in a fringe (sic) day part. Depending on the event, that coverage alters a little bit, but that's about the standard, three to three and a half hours.

Q. Do you have any plans to make the Golf Channel available in Europe?

DAVID MANOUGIAN: Yes. One of our main goals going forward, as Ken said, we are very excited that this summer we will hit the 50-million-home threshold in the States, which is a very significant threshold for us. And as part of our strategy going forward, we really want to take our brand and our network more aggressively, globally. Right now we are in Canada, of course, and we are in Japan, but we think there's a wonderful opportunity to take either our entire signal or portions of our programming throughout Europe and the rest of Asia, Australia. So we will be working very hard at that in the months to come.

Q. If you were broadcasting in the U.K. or available in the U.K., won't there be a conflict there with Sky?

DAVID MANOUGIAN: Depending on the particular countries and the right situation, there will be some instance where we might be looking at the 24-hour signal. In a lot of other instances, it might be 3 -, 4-hour blocks of our programming which may not include any tournament coverage from any of the Tours but more focused on our news programming, our instructional and talk shows.

Q. Is this contract financially valuable to you in itself, or does it benefit you in terms of exposure to the American market for your sponsors? Where does the new benefit come from?

KEN SCHOFIELD: It comes in both. I think it would be fair to say without breaching any confidence at all, either for the Tour or indeed for the Golf Channel, that it would be, in terms of the financials, it would clearly be the most valuable contract outside Europe. In fact, we probably rank really second only behind the current arrangements with Sky, would that be fair?

GEORGE O'GRADY: Yes.

KEN SCHOFIELD: I think it is financially important (A) for the Tour and (B) for the tournaments because it -- of course, the production values as well as the rights values enables George and Rupert to sit with over 30 tournament promotors each year and help their budgets. That's a very, very significant part of our work.

Q. David, what would your average viewing figures be for the live broadcast for the European Tour?

DAVID MANOUGIAN: Difficult for us to answer. Currently, as I am sure you are aware, the metric of measurement in the United States is Neilsens - what we get from them is a monthly snapshot. So what we get is a total month number for particular day parts so it is very hard for us to look at one particular event or one particular Tour and say how those ratings are.

From other viewship information that we get, either from viewers, or other information from Nielsen, the European Tour ranks right up at the top of all the Tours that we do. Very popular.

Q. Do you have a ballpark figures for that?

DAVID MANOUGIAN: No. I can tell you -- I can tell you on a monthly basis Golf Channel receives seven million unique viewers to the network each and every month. What exact percentage of those are watching the European Tour, I don't know exactly.

Q. Would you expect more than 100,000 viewers watching the European Tour?

DAVID MANOUGIAN: Yeah.

GEORGE O'GRADY: I think we should answer Mike's question on one other side on the financial deal with the Golf Channel -- comes in two ways to us, specific rights fees, which are -- most of which return to the individual tournament promoters so you see that in the budgets, but a key part, not only now but when they first came in in 1995, was to enhance the production values of each tournament we did. And in those early days, all the tournaments weren't like Dubai. We had to develop some strong tournaments before the Masters, so that our players came into the U.S. masters battle-hardened, and that, together with the involumement we have from Sky here in the U.S., enabled the European Tour to grow internationally and bring the standard of production that you see here all the time. They, if you like, complemented Sky. They do it very much in their own way. They are very professional. They have two very professional commentators who have become fair household names in the States, Renton and Warren supplemented by others. It means when we're portrayed in the States, it's a real quality product and a quality production and if the production values aren't at the absolute top value, the Golf Channel aren't satisfied.

Q. How much has it helped your members, the players, in the sense that they have been seen by American tournament organizers and then they have invited them over to play?

KEN SCHOFIELD: In a word, it's transformed the European Tour. If you are transforming a Tour it is transformation for the players. I mean, prior to the arrival of the Golf Channel, really the only time that European Tour members were shown in competition on United States' television was in -- was those few who were then eligible for the majors. And very few who made full-time commitments to play the PGA TOUR. But those who were playing here were never featured. There was no output station for them. This, in terms of our players, has made them, if you like, absolutely many of them, to the golfing audience, household names. We have many personal examples of this. We take the Golf Channel and we know how good Philip Walton and David Gilford and others were playing that year, no surprise to us. I think those of us that attended the Tour dinner the other evening heard the executive director of the United States Golf Association say pretty much the same thing. So I think it's transformed the European Tour.

Q. Ken or George, can you envisage a time (A) when there might be a uniquely American sponsor of the European Tour event, I mean, uniquely American, a WalMart or whatever? Secondly, are you aware of any players on the European Tour who have received uniquely American sponsorships because of their appearances on the Golf Channel?

GEORGE O'GRADY: I think to answer the first question, we definitely can see a time when a sponsor comes just to get the visibility on the Golf Channel. It hasn't happened yet. I think most of the sponsors we talk to are very well aware of what the Golf Channel means to them. That it means we're starting in a different sort of way. And I would say without question all the tourist boards we talk to back here, if you have studied any of the Ryder Cup bid documents and certainly the support it's received, they get to a very committed audience. Most of us are well aware that golf tourism traffic into Ireland has increased dramatically since they became in the golf program. A large number of that has been American visitors. I think the same attack's been done on Wales, certainly on Scotland. If we looked on the Spanish tourist board as well, if it was aimed in that direction, it was certainly a target of its predecessor, Joe Gibbs, to have exactly that, sponsor come out of America to sponsor over here and it's -- a lot of our sponsorships are now sold -- not a lot, some are sold in the United States. You can see it in the Ryder Cup sponsors and in one of our sponsors that supports this Championship here, Pfizers, that's an American contract signed in America. They are very well aware of the exposure they get on the Golf Channel. We can't say specifics, but it's a very much a contributory factor.

Individual players, the amount of programming we put on the Golf Channel is -- firstly, the European Tour, in the way Dave has mentioned it so far. Secondly, we put our weekly magazine show, European Tour Weekly, which is distinctly a wrap-up of the two tournaments but also has features each week which tend to feature different players - not always the well-known players, young players who have particular interest, we put the highlights of the Seniors Tour and we put a series of programs on our Challenge Tour as well.

Now, the measure we would say on individual players, they get invited to a program that the Golf Channel does that we don't have back here, which a lot of us think is excellent programming called Golf Talk Live, when they invite featured players in to talk, I think it was originally Peter Kessler - I can't think of any of our players who turned down an invitation to go in front of an American audience to have themselves personalized. I believe they are allowed to go in their golfing equipment, logoed sweaters. I think it just enhances it. I don't know enough. You might have to ask some of the other play managers if they had a direct benefit, but I am sure it's done no harm at all.

DAVID MANOUGIAN: I can comment from a manufacturer's standpoint that they are keenly aware of how much visibility the players get on our air as they looked at visibility of their logos and their brands. And just a comment real quickly on what was said before about the quality of the product and the quality of the production and the job that Warren and Renton do. When I am out travelling around and somebody hears I am from the Golf Channel, usually the very first two questions I get is they happen to live someplace where they don't get the Golf Channel; that's the first question, how can we get the Golf Channel. Second one usually revolves around their love and appreciation of the European Tour and being able to see this product. So again it really speaks volumes to not only how good the product is, but the job that's done in broadcasting the product as well.

Q. Can you elaborate on some of the experimental things you are doing on the BUY.COM Tour (inaudible) with miking players and putting heart monitors on; to what extent do you think that will begin to transform television? Will it happen with the European Tour?

DAVID MANOUGIAN: One of the things that we do on programs on our network is look to how we can produce them more creatively allowing the viewers to experience the program more fully and as it relates to tournament action, kind of our mantra is how do we let viewers get a real inside-the-ropes-feeling in watching a golf tournament. And two of the first steps that we have taken there is last year we started miking players on the Canadian Tour, the other Tours weren't really ready to begin doing that. And I think when they saw some of the success that we had in doing that and the response from the players on the Canadian Tour, response from the viewers, we have now begun miking players on the BUY.COM Tour as well as the LPGA. We have added to that this year by implementing heart monitors, so we can start giving our viewers a little bit of what it feels like you know when a Touring professional is standing over a 5-foot putt on the first hole, day one, and you know what their body reaction is when they are facing that same putt on the 17 or 18th hole on Sunday. So it's really our way to continue to look at how we televise golf in a more creative way so that the viewers can really fully appreciate and enjoy the product.

As it relates to taking the next step with the European Tour, to be quite honest, we haven't got to that point yet where we have really got into discussions but we would love to have those type of discussions with the Tour and figure out how we can implement some of those elements where --

GEORGE O'GRADY: It's not completely true. He has got into those discussions and we have ready volunteers at the moment on the Senior Tour where the heart rate monitor doesn't fluctuate that much. None of us have got our heart monitors in yet to ask Colin if he's going to take one, but we're thinking about it.

GORDON SIMPSON: Just before you leave, I wonder if you'd be good enough to join us if you have time for a little glass of Champagne to celebrate this historic day between the European Tour and the Golf Channel. Thanks.

Very much for your attendance today. Thank you.

End of FastScripts....

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