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KRAFT NABISCO CHAMPIONSHIP

March 23, 2005

Ty Votaw

RANCHO MIRAGE, CALIFORNIA

COMMISSIONER TY VOTAW: On behalf of the LPGA, I'd like to welcome all of you again to another wonderful Kraft Nabisco Championship. I'd like to also give special recognition today to Kraft and to Nabisco brands for their commitment to the Kraft Nabisco Championship and the LPGA and allowing us to do our State of the LPGA Tour press conference as traditionally been done here. This event has played host to our State of the Tour, state of the LPGA press conference, and I've enjoyed sharing this tradition since being named Commissioner in 1999.

Today I'd like to continue that tradition by sharing with you some of the business successes and a few of the highlights that we're looking forward to in the 2005 season. As I typically do, I'd like to give you a quick recap of our strategic business plan. As you all know we announced our business plan in 2002 at our LPGA Players Summit, and we are now entering the fourth year of our five-year business plan and we're pleased with the progress and the results so far.

Our Fans First business plan is producing very positive business developments since 2001, the year just prior to our rollout of the plan. And to give you some idea, since 2001 our attendance at our LPGA tournaments are up 20 percent, the average purse of an LPGA event is up 23 percent since 2001. Our network viewership is up 26 percent and our cable viewership is up three percent.

We are seeing the reasons for that success in a number of different areas. All of this we think is the result of the overall organization's embrace and commitment to the business plan itself. Everything we're doing is to create a bigger enterprise for the LPGA, and we sharpened our focus on the consumer and the fans and we are driving players celebrity in making our players awareness levels across all forms of media better known. We also are showcasing the great talent and the deep talent that is evolving and developing on the LPGA Tour, and we have also had some very electric moments, not the least of which have been in our major championships which I'll talk about here in a little bit, major championships of 2004.

There's no question, and I'll get into this a little bit later, that the global diversity is also driving our business success. The contributing factor to that success is the makeup of our Tour. Emerging and veteran stars are making names for themselves not only in the United States, but all over the world which creates an enormous amount of opportunities for us in terms of television sponsorship, development and tournament opportunities. There is no question that the LPGA global diversity is resulting in an increased fan interest from consumers all over the world.

The LPGA itself will continue to have global appeal. As I said to a number of you, the LPGA is a very different product today than it was five years ago; and it will be a very different product five years from now than it is today, and that will continue to be a product that has enormous amounts of global appeal.

Now, this is the last State of the LPGA press conference that I'll be giving you as Commissioner of the LPGA. It's been somewhat a reflective time for me, and in addition to our strategic results that we've talked about, I'm very happy to share with you some of the tremendous milestones as they relate to the economic opportunities of our membership. As I reflect back on my tenure as Commissioner, it's rewarding and gratifying to see the growth of the LPGA as a business. In 1999, for example, our average purse was $800,000, and today it's $1.4 million. If you look at the seven years immediately prior to 1999, 1992 to 1998, total prize money cumulatively over that seven-year period is $170 million. Since 1999 and up through the 2005 schedule, total prize money has resulted in $278 million, an increase of $108 million over the previous seven-year period.

If you think about that $108 million in growth of prize money over that period of time, that period of time included a tech bubble bursting, the stock market imploding, 9/11, an advertising recession, two wars and a tough economy. What that shows is the marketplace is responding to our players and willing to invest in them, which is a great product, and obviously the very best golfers in the world.

In 2005 our total prize money is the richest in the LPGA's 55-year history, $45 million. There are 30 events at a million dollars or more in prize money, and the first time that all of our full-field events on our schedule have $1 million or more prize money, with four of those at least $2 million or higher; and to give you a comparison in 1999 there were only 12 events that offered $1 million in prize money and none that totalled over $Q2 million; and now we have 30 on our schedule at $1 million and four over $Q2 million.

In 2005 as well in September of this year, we are also going to be staging the most financially successful Solheim Cup in the event's history. Already public ticket sales have sold out, and if you can believe this, there are a number of offers for Solheim Cup tickets on eBay at much higher than the face value of the tickets, so from that perspective, from a popular culture perspective, we are very gratified to see our product is being auctioned off on eBay.

Another staggering fact to demonstrate the economic opportunities for our players is obviously Annika Sorenstam's remarkable performance during this same seven-year period. She has earned more than $12 million since March of 1999 bringing her total career money to $16 million, a milestone she eclipsed with her win last week at the Safeway International in Phoenix. On the PGA TOUR her $16 million in prize money would represent the 16th -- she would be ranked 16th on the PGA TOUR's all-time Money List.

In addition to Annika, we have seen a number of great performances and players evolve over the past several years and we have seen a development of young rising stars competing alongside veteran talent lent week-in and week-out on the LPGA Tour. Our players are now performing at a level beyond anything that has been accomplished by Tour in recent memory, maybe even in our history. The emergence of young talent mixed with dedicated veterans has produced a continuous assault on the record books and has brought a new level of interest in the Tour and our players. One of the aspects of our five-year business plan was to conduct more fan research, and we've been doing a fair amount of that over the past several years. And response from our most recent fan research says that the LPGA is exciting and entertaining; the number of people that say that the LPGA is exciting and entertaining is up eight percent amongst men and 11 percent amongst women from 2003 versus 2004. So obviously the players' performance is a direct result of that fan feeling about the product.

We also boast a dominant contingent of international players that increasingly has I've said earlier creates a global appeal and a global demand for our players. Of 193 players who cashed a check on the LPGA Tour, 85 of those are international members. Last year Lorena Ochoa was the first Mexican in the LPGA Tour's history to win an event; Jennifer Rosales was the first Filipino to win on the LPGA Tour in 2005, and we see Li Ying Ye become the first player from Mainland China to earn LPGA status as a member.

While the LPGA has seen a rise in international players and their continued top performance, we are also seeing continued tomorrow performance from veterans in the past few years, and with that success we have also seen our fans clamor for the next wave of American talent.

The 2005 rookie class is the strongest in this regard in recent history. Our rookie class, over two-thirds of our rookie class are coming from the United States in 2005, up from just over 50 percent the prior year, and it's the highest percentage of American players in our rookie class since the last five years. Rookies.

Paula Creamer, Brittany Lincicome, rookies to watch this year, Americans players, young American players to watch. Other U.S. stars to watch obviously Christina Kim, Cristie Kerr, Natalie Gulbis, Dorothy Delasin, Laura Diaz; the list goes on.

The LPGA Tour has also seen an increase in younger players making their way on to the Tour; 27 players who are 25 years of age are younger make their debut on the LPGA Tour with an of average age of the rookies at 24.1. The second youngest group in the last ten years.

Youth may speak to the future of the game but fans are still entertained and compelled by the great performance of players like Meg Mallon, Beth Daniel, Rosie Jones, Juli Inkster, Laura Davies. All you need to do is look at the Solheim Cup team standings to see the great leadership mixed with young rising talent on the LPGA Tour.

I mentioned earlier some of the economic success of Annika. You have to put that in context of her actual competitive performance, and after 11 consistent seasons, 11 remarkably consistent seasons of winning and record-breaking, she has numerous chances to make even more history this year. Annika could conceivably pass LPGA great Patty Berg as third on the list of all-time winners with 50 wins; she currently has 58. With her win last week, she became the first player to surpass $16 million in career earnings on the LPGA Tour. She's going for a record-tying fifth consecutive win in five starts this week at Kraft Nabisco Championship, which carries over from her win in 2004. As you remember, Nancy Lopez is the only player to have accomplished this in her rookie year in 1978, five wins in five starts. No player in history has ever won a major championship three consecutive years, and Annika will go for an historic threepeat at the McDonald's LPGA Championship presented by Coca-Cola at Bulle Rock Golf Course. Later this year and at this years Mizuno Classic Annika will attempt to become the first golfer, man or woman, to win the tournament five times in a row, where she has now won four years and is a huge story in Japan leading into the Mizuno classic.

Another player I'd like to highlight because at the end of this year she will be going into the World Golf Hall of Fame and LPGA Tour Hall of Fame, Karrie Webb will become the 22nd member of LPGA Tour Hall of Fame when she's inducted later this year at the World Golf Hall of Fame after she competes in her 10th event throughout the year. I would not be surprised to see a return to form by Karrie who has never stopped winning, but has certainly known a new commitment and maturity in her game as evidenced by April win in Australia last month and a runner-up finish earlier this season.

And no discussion about the promise of the future of the LPGA would be complete without mentioning the teenagers who have competed on the LPGA Tour the past several years and this week in particular with nine in the field. This week mark's the first time that Paula Creamer, Morgan Pressel, Aree Song, Michelle Wie, Jane Park, Brittany Laing and Ai Miyazato sharing the same stage in a competitive environment. It's going to be a great week.

One of other areas I'd like to just touch upon in terms of our future as well as the marketplace's confidence in us is in the area of television. More and more fans worldwide tune in to the competitions of the LPGA week-in and week-out over an LPGA season, and over the past several months we made three television announcements regarding our television deal to highlight our large global footprint and that we continue to deliver the very best of women's golf to women's golf fans around the world. Late last year we extended our relationship with SBS our Korean TV partner for coverage of all LPGA events in Korea, which was a record-setting deal in terms of television rights. In fact, it's the largest television rights agreement in the history of the LPGA, which speaks volumes to the level of interest of the 26 Korean players who play our tour have in their home country.

Last week we announced an extension of our agreement with The Golf Channel televising a minimum of ten events each year through the year 2009. In addition to the first-run coverage of those events, The Golf Channel will also be home to a complete ball by ball coverage of the 2005, 2007, 2009, Solheim Cups including the opening and closing ceremonies.

And then finally we reached a multi-year extension with ESPN to televise the State Farm LPGA Series on ESPN for 2009 which is the network's longest commitment to the LPGA. This year for the first time of the State Farm LPGA Series will include a major championship, this week's Kraft Nabisco Championship. All in all, our television schedule features 250 hours of domestic first-run coverage and for the first time in our history, every domestic event in our schedule will be televised in those agreements with SBS, Golf Channel and ESPN run through 2009 which secures our television future in a very nice way.

In the area of sponsorships, last week we announced the addition of the SchickÃ‚Â® Intuition brand to our sponsorship family and they join an impressive group of sponsors including industry leaders like ADT, American Airlines, Anheuser-Busch, Choice Hotels International, MasterCard, Rolex, State Farm, all companies whose partnership in our organization are indication of the sponsor demand for the LPGA Tour remains strong and their involvement with the LPGA crosses not just official category status but often times also title sponsorship of events and investment in our players in terms of sponsors, as well as advertising commitments on our telecasts..

Samsung, another blue-chip company is on our roster. A tournament title sponsor for more than a decade, Samsung has extended its commitment to the LPGA Tour with partnership as Official Sponsor of Realtime Scoring at LPGA.com, and our family of sponsors continues to be very, very strong.

As we enjoy this week's Kraft Nabisco Championship, the first major championship of the season in golf, I recall the majors last year provided a number of very compelling and electric moments. Who can forget Aree Song's putt on the 18th green last year to force Grace Park to make a birdie putt to win her first major championship; or Meg Mallon's feel-good victory at the U.S. Women's Open; certainly Karen Stupples' eagle, double-eagle final round start en route to her home country win at the Weetabix British Women's Open. All of those things were electric moments on the LPGA and our players last year, and we anticipate those electric moments to continue.

With all of the momentum created last season, we are as excited as ever about the prospects of another vigorous year in 2005. As I close my seventh state of the LPGA I'm excited about the season and focused on executing the LPGA's 2005 strategic plan, helping the board of directors in their search for my successor at the end of this year, and obviously helping that successor in a transition plan as we continue to capitalize on the momentum that we have been experiencing.

I'd like to express certainly my appreciation to all of you for covering this week's Kraft Nabisco Championship. I hope you have a wonderful week doing so, and at this time I'd like to open the floor to questions.

Q. What would you consider your greatest accomplishment and what would consider the biggest challenge that you leave?

COMMISSIONER TY VOTAW: Well, I've often said the thing I'm most proud of is how the players came together during the 2002 Players Summit to embrace the five-year business plan that we rolled out in 2002 and helped the staff of the LPGA execute that plan in making sure that they did everything they could to embody the Five-Point Celebrity, create greater fan interest for the Tour and meet their obligations as celebrity athlete.

In a time in which you have a work stoppage in the NHL, and you have steroids being talked about in baseball, you have NBA players going into the stands to show how they really feel about those fans, we continue to have some of the most, if not the most, approachable and accessible and appreciative professional athletes, and some of the best people in all of sports competing week-in and week-out on our Tour. The fact that they have been so much a part of the business success of the organization is probably the thing I'm most proud of.

As far as challenges are concerned, I would say that clearly we remain in a very competitive sports entertainment marketplace. While the problems I may have mentioned in other sports certainly exist, we have to continue to differentiate ourselves and make sure that we keep all of the strengths that we have while minimizing whatever perceived weaknesses there may be, and whoever my successor is will have to work very hard to continue that momentum. I think that's probably the biggest challenge.

Q. What are your plans after this year and why are you standing down?

COMMISSIONER TY VOTAW: Well, I'll answer the second question first.

I have traditionally over the past seven years taken the time at the end of each year to re-assess my accomplishments, the accomplishments of the organization and what the future holds, and in the course of doing that at the end of 2004 I came to the realization that I had spent fully two-thirds of my adult life with the LPGA. And that amount of time was impressive to me personally; I didn't realize it was two-third of my adult life.

So when I realized the time invested had been that amount of time, I looked to see some of the results that we've been able to achieve over that time, and certainly the accomplishments I've stated here in my opening remarks were part of that process; and both of those things, the time invested and the results of those investments made me think, maybe this would be a good time for me to hand the reins over to somebody else, which led again to how you conduct the transition in that regard.

When I talked to the board of directors I had indicated to them to provide as orderly a transition as possible, that it would be ideal for me to stay at least another year, through the end of 2005 if that's necessary, in terms of the amount of time my successor might need in that transition. The board was appreciative of that time commitment on my part, and they agreed that 2005 would be the end of my time as Commissioner. Those are the reasons why.

As far as my plans are concerned, they are not in any way formed or really relevant at this time, simply because I'm dedicated through the rest of this year to help execute the strategic business plan, as well as help in the search to whatever extent the search committee and the board feels is appropriate.

And then obviously when the successor is named, we'll help in the transition of that successor. I think that after those things are a little bit more formed, whatever my future plans might be may come closer into focus. Right now I'm focused on the job at hand.

Q. Even though you won't be at the helm, is there something you would like to see in five years, growth internationally, purses, or just a continuation of what you're building on now?

COMMISSIONER TY VOTAW: I think clearly who whoever is leading the ship over next five years will have a large say in that. So for me to suggest what that might be, other than the general statement, it will be a very different organization, I think will be somewhat presumptuous on my part.

I think that -- I don't see the global diversity being any less than it is today. I think it will only be greater and greater because as the economic success of the organization continues with prize money and with notoriety and playing on the LPGA Tour, I think more and more players from around the world want to compete on the LPGA Tour. So certainly the global evolution that is taking place will continue, and when that happens, there will be greater global appeal by sponsors and by television partners and by fans around the world.

Clearly, the United States is the largest golf economy in the world, as well as one of the largest economies in the world in terms of advertising, sports investment sponsorship, etc., and so I don't see over the next five years our schedule being -- I would anticipate that our schedule would continue to see a majority of our events here in the United States, vast majority of our event in the United States, but taking advantage of the opportunities exist where they are around the world, where the players are from, where the demand is present, and obviously whoever my successor is will have to take advantage of those opportunities as they arise. But I think clearly with two-thirds of this year's rookie class coming from the United States, the future of women's golf here in the country in terms of having an American audience, wanting to follow an American player, is certainly very high.

Q. What can you tell us about the increases you might have in the number of events on Tour? Is it going to stay pretty constant?

COMMISSIONER TY VOTAW: One of the things we looked at over the past five years is what the right number of events that our players want to play, the quality of the fields that we deliver to our sponsors. If you look at the past couple of years, we've averaged 7 of the Top 10, 15 of the Top 20 and 23 of the top 30 on the schedules that we have. In terms of adding more events, we may very well look to adding a couple more full-field events to our schedule in strategic places, but we have to be mindful of the fact that the more events that we add to the schedule, the more likely the averages of top players playing in those events will go down.

So when we had 28 full-field events in 1999, we did not average 7 out of 10, 15 out of 20 and 20 out of 30. We averaged significantly less than that. And when we had 28 full-field events we, had a number of situations where we had short fields where our players didn't fill 144-player fields, and we have averaged in the area of seven to nine events on our schedule that we had 28 or 27. So if you take out 28 events, less those seven or eight or nine that have short fields; and, oh, by the way, those events that had short fields are no longer on our schedule because the sponsors were not happy with the quality of our field and the fact that they are not filled, you come to the number of events that we have now, which is 22 full-field events and 34 total events.

We think that we are delivering the very best of women's professional golf right now with that number, but we recognize the need to perhaps add one or two more events to the schedule so that we can have a little bit more economic opportunity for our players while also being mindful of what we can deliver to our sponsors in terms of quality field the very best of women's professional golf.

Q. You talked about Annika and the milestones she's had financially, she's been your most high-profile player over the last few years; can you talk about how what she has done has trickled down to the Tour and the other players in general?

COMMISSIONER TY VOTAW: Well, I mentioned this at a player meeting last week in Phoenix. If you take the fact that over the last seven years we've gone from $170 million total prize money 1992 to 1998 to $278 million in prize money from 1999 to 2005, a $108 million increase cumulatively over that period of time, her $12 million in that period of time represents more than ten percent of that increase.

So the other 90 percent of that increase has been distributed amongst all of the other players. That alone I think has -- that result demonstrates the impact that her notoriety, her dominance, her excellence has made on the economics of the LPGA and it's players.

I don't know if -- I mean, because you can't rewrite history, I'm not sure that you can say that we would have had less increase of $108 million in cumulative prize money over the time had she not been as dominating or as excellent in performance. While also helping raise the bar for all of golf while playing in Colonial, creating an icon status for herself both in terms of currency as well as legacy, the LPGA and whatever economic success we have had, Annika should be thanked and credited a great deal for that.

Q. Can you give me your idea of the impact that Michelle Wie has had your Tour, playing in her 20th event?

COMMISSIONER TY VOTAW: Since she was 12, first event Takefuji in Hawaii. I think that you have to look at the past seven eight years, not just in the area of Michelle Wie, because I don't think you can really focus on any one player in that regard.

But look at the totality of what's happened over those seven years, Natalie Gulbis at 14, when she was 14 became the youngest player ever to qualify for an LPGA event. And then you had Naree and Aree Song player in the Kraft Nabisco Championship, and Aree Song when she is 15 finish in the Top-10. And then you have Morgan Pressel who was the youngest player when she did it to qualify for the U.S. Women's Open; and Michelle Wie being 13 years of age at Kraft Nabisco, and finishing in the Top-10 when she's 13, all of those things have resulted in more and more players playing at a higher and higher level at a younger and younger age on the LPGA Tour, which obviously creates no small amount of interest in the public, a small amount of coverage from the media which has fueled everything that follows from that.

Clearly when a Michelle Wie, for example, will play in six events last year and up to eight events this year on our schedule. Those events that she plays in tend to have a little bit more media representation, tend to have a little bit more attendance on average, simply because her persona that's been created by the media has been followed by the fans is of a nature that rises to the level of fascination. We're happy to have her here this week. We're happy to have her last week in Phoenix and the SBS where she had her highest finish, second, and we are also happy to have last year Paula Creamer as an amateur win close -- would have earned close to $250,000 had she become a professional as an amateur last year.

So all of those things create greater interest in the LPGA, but it's not necessarily because of Michelle Wie individually. I think it's more of the overall trends of young players having success on the Tour.

Q. There's an event in Florida -- will you add one to the schedule?

COMMISSIONER TY VOTAW: We've had some discussions over the last couple of years with a couple of different markets in Florida and we have maintained, and I think it's the right strategy that we are not going to go into a marketplace that doesn't have the potential for long-term sustainability and success.

And we clearly are very pleased with our season-ending TOUR Championship at Palm Beach at Trump International, the ADT Championship. We think that that's a great way to finish our year in Florida. We think that taking the month of January off is the right thing for us to do in terms of off-season and helping our players and our sponsors recover from the previous year and deliver the best-quality field throughout the schedule. By having our season start in February last year starting in March but this year and next year it will be starting in February.

I think that's the right direction for us to go and certainly where you can play in Florida, the traditional has been January and February when the PGA TOUR and Champions Tour has been on the West Coast. If we go to Florida, I would anticipate that if we add an event in Florida, I would anticipate that it might very well be later in the spring, whether it's April after we come back from a West Coast situation or in the fall. But right now there are no developments of any concrete nature for the 2006 schedule that would enable us to return to Florida.

Again, thank you very much and appreciate your attention and your coverage this week.

CONNIE WILSON: I would like to introduce Terry Wilcox, Kraft Nabisco tournament director, to say a few words.

TERRY WILCOX: Thank you, Connie. Thank you, Ty. That was very enlightening.

From all of us at Kraft Foods who are great fans of women's golf, I want to thank you for your tireless efforts here in the last 14 years, and certainly we wish you good fortune in whatever endeavors you care to take in the future.

As for the Kraft Nabisco Championship, today I would like to present you with a display of an original oil painting by Graham Baxter, who is our official tournament artist. This painting is a representation of 18th hole the Dinah Shore tournament course which we hope will ensure that you don't forget us. And we will assure you that we will not forget what you have done for our tournament as well as all of the LPGA Tour. I'd like to ask Graham Baxter to come up and help me with this presentation by unveiling it.

Graham joined the Kraft Nabisco Championship family last year as our official artist and this was the first painting that he has that he did for the tournament, and he did another one this year, which we're going to talk about and we hope Graham stays with us for many years. Thank you very much, Ty, and good luck to you. (Applause).

End of FastScripts.

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