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May 31, 2009

George O'Grady


RODDY WILLIAMS: Ladies and gentlemen, thanks very much for come here today and George will be making an announcement very shortly, and I'd like to welcome on my left George O'Grady, the Chief Executive of The European Tour and David MacLaren, Director of Property and Venue Development for The European Tour, and I shall now hand it over to George.
GEORGE O'GRADY: Thank you, firstly, welcome and thank you for joining all of us today. This is a two-party announcement. One, something we wish to announce today, and secondly, to say welcome to everybody for joining us for the week and to introduce all of the people, if you like, concerned.
Well known that we have run this tournament in association with our partners, Leisurecorp, in Dubai, and that's well chronicled in the changes going on in Dubai, but it's really important for The European Tour that in troubled times, you've got tough partners who stick with you and who believe in the dream of The European Open and where it goes.
Our partners in running the tournament as well, The London Club, Charles Fairweather, chairman at the back of the room; Heath Harvey, managing director of The London Club, and I think Peter Todd, course manager, as well, welcome here, as well.
I think that's the first point of our announcement today is the European Tour is having a bigger tie-up with the London Club in the future. It's spearheading our future property strategy where it will become a European Tour Destination.
Two years ago we regained the name European Tour Courses, for our property company which had been passed on in a shareholding to Denis O'Brien of Ireland. We now have the name and all venues are currently there for The European Tour Courses, association in our portfolio, but this is part of our new strategy of being on really big championship courses that have potential, development potential, and are acceptable to our Membership.
This is the second year we've had the main European Tour play at The London Club. We don't, if it's come, it has not come to my ears of any real complaint on the golf course at all. This has been quite a tough week with the wind, but the conditioning of the fairways, tees, greens, has been exemplary, and even the top players who have had tough rounds, I might add, 79, 80, have not complained about the setup. If we can find courses like this, two championship courses, because the Heritage Course, and what's the name of the other one?
DAVID MacLAREN: The International.
GEORGE O'GRADY: The International; are both in really good condition. There's a lot more that can be done here at The London Club, and I think that's what we want to do in the future.
We are looking for similar opportunities in other parts of Europe. It doesn't stop our new development policy; when the economic terms are better, our preferred development partner is Leisurecorp. We will look at those sites as and when they become available, and as AND when the economic conditions improve.
Outside of that, that's the only, if you like, message. The second message is just thank you for your support this week and thank you for the tournament. We didn't have a press meeting last Sunday because we had so many other meetings during the week. You're going to see too much of me in the sense that we are with the First Minister and the Ryder Cup Captains in Wales next Wednesday; there will be plenty of time to make myself available then.
So thank you for your support. David MacLaren is the Tour's Director of Property; will that do?
DAVID MacLAREN: That will do.
GEORGE O'GRADY: Someone who is doing the work, in other words, and he certainly has done it here.
And so we will take any questions on either the property strategy or on the tournament, or on life in general, anyway.

Q. Sorry I'm being stupid, have you bought this place then?
GEORGE O'GRADY: No. We are going forward on a 50/50 basis with the current owners. It's a partnership where we will work on a joint basis together. We are not licensing our name. We are in it, a complete joint venture. We are 50/50 partners with the current owners of The London Club.

Q. So you have to hand over any money or not?
GEORGE O'GRADY: The handing over of our name.

Q. And the future of the tournament?
GEORGE O'GRADY: To be discussed in the next couple of weeks. I think it's pretty certain we won't be playing here when The Open is at Royal St. George's. I think we have some eye on that, and we'll take a view next year depending if it's in with the plans of The London Club and ourselves and the future.
We would be very happy to come back, and the Tour would be very happy to come back here.

Q. We were under the impression this tournament was going to Turnberry next year. What has happened to that notion?
GEORGE O'GRADY: It's not decided. I think you might be under that impression; no one's, in fact, confirmed that with me yet. We would be very happy to go to Turnberry. We would be very happy to go to a lot of different venues, and this is on the map. I think Turnberry, it has potential on when we sort out the dates, but nothing has been decided as we sit here today.

Q. How many courses now in your portfolio?
GEORGE O'GRADY: The total number, David can answer, but each one is under review whether it fits our model.

Q. Does that include Catalunya and places like that?
DAVID MacLAREN: It does. We inherited I think 12 venues when we acquired Tour Courses from Dennis. We have decided to go forward for the next three years with six of those, where the quality of the facilities and the courses fits our new strategy.
The press release lays this out but they will be known as European Tour Courses, and The London Club will be our very first European Tour Destination. So where we have a particularly serious and intensive relationship going forward, as we will here, those venue will be European Tour Destinations and Courses, whether it's less development opportunity, but whether it's still tournament opportunities for us, they will be known as European Tour Courses, so two tiers, if you like, of venues.
GEORGE O'GRADY: Your question on Catalunya fits because the Spanish Open this year was remarkably successful. And it's slightly similar to here; they are really tough on the Friday in the sense of wind. It was a grueling test of golf; but in beautiful condition, wonderful condition. And in fact, unusually, for the Sunday, when I didn't go to the tournament, because we had been travelling a lot, I got a text from four different players saying what a great week it had been and how wonderful they thought the course was. And one of those players had taken 80 in the third round, so it wasn't just because they played well.

Q. Is it a strict 50/50 partnership ownership, because my understanding was that it was 50/50 on the up value of the club if and when it was sold; is that wrong?
GEORGE O'GRADY: We have agreed at going in, if you like, a valuation, and then we are 50/50 from there.

Q. And are there plans for a hotel on the site; is that right?
GEORGE O'GRADY: I don't think we are discussing, if you like, the future. We reckon there's potential here at The London Club and we are working together to maximise that.

Q. Back to the tournament, it was obviously a difficult decision to drop prize money this year, because obviously sends a message about the times, so do you want to talk about that?
GEORGE O'GRADY: I don't think it's a difficult decision. I think it's a realistic decision. We have kept The European Open going. I think 1.8 million in this economy, I don't think you have too much to apologise for. We have come at the same time of marketing our way out of problems. We certainly listen to a lot of marketing ideas from our partners at the time, Leisurecorp. There has been if not free entrance, if you register online, you can come in for nothing. The crowds have been tremendous.
It sends a very good signal to people who perhaps have not been fully interested in golf before. It's a wonderful day out for the family. We had record crowds for Wentworth last week, as well. You are blessed in this country when the weather was good.
The weather wasn't particularly good in Ireland, and the Irish government and our new sponsor, 3, wanted to adapt this, and if you registered with the Irish Open Web site or the 3 Web site, you got complimentary admission for the first and Friday, and it meant that it helped to get a good-ish crowd in, I would say, inclement weather. And the last two days was paid for, you had to pay to come in, and most of us witnessed those scenes either on the green or on television. It was a tremendous three weeks or The European Tour.
I could actually say four weeks if you go back to The PLAYERS Championship and The Italian Open, because The Italian Open had record crowds, as well, really well covered. Henrik Stenson won THE PLAYERS Championship. Can't work out what's gone wrong in the last two weeks, he can win THE PLAYERS Championship and miss the cut at the BMW PGA and here. And for all of the talk on the Wentworth greens, masses of work was done on the Wentworth greens in year in association with our agronomist, who have been assisting Peter in the back, Richard Stillwell, assisting just on advice.
Wentworth's greens, I was on them yesterday; not playing, walking, looked pretty good. So whether it's Wentworth's greens or the greens here, it's the common concern of our Membership. The greens here putted beautifully. We know it's been very windy, but that act of fmoving, cutting the prize money to 1.8, we didn't have the money to pay 2.4 million. We are not living on egos now; we are living on reality.

Q. What is the time frame, when did you decide to drop the prize money? Was it after Dubai started?
GEORGE O'GRADY: No. We dropped the prize money early this year when we realised we didn't have enough. We thought we're just not going to get carried away, we want to keep this thing going if we can and so we paid the prize money that we are comfortable with our investment in paying.

Q. Did you have to explain any of the players why, or did you have to sit them down?
GEORGE O'GRADY: No. We explained to our Tournament Committee Chairman, Thomas Björn, and the Tournament Committee what we are doing and they understood that is, if you like a reality here.
It's happened, as well, and it's going to happen as well at the Austrian Open. We had to move that to the end of the year. British Masters was unable to continue, and we worked I think together with Andrew Chandler, who is here at the back of the room, both sides tried to do what we could.
Austria are very comfortable with going to September, because they have got two things going for them: They have got a really good golf course at Fontana. They stage the tournament brilliantly. But they have had problems -- they were sponsored by the Bank of Austria, have been taken over by an Italian bank and so they have lost their main sponsor.
These are tough times. They have got somebody else in the mix. We were cutting that prize fund to 800,000 Euro from what it was before; it's now gone back up to a million, and at a crucial stage in The Race to Dubai, we will have a tournament in there, which most of our players -- we're going for the very best quality we can find in terms of the course presentation. It certainly hurts to us, and it hurts to the promoter of the British Masters that we have not continued with the Belfry because The Belfry was in superb condition last year, and hopefully that will come again.
But people are well aware of the financial position of the Quinn Group, Sean Quinn, in particular, and the investment in some of the Irish banks, and who knows how life will go around in circles.

Q. At risk of sounding typically dim, could you just explain who your primary business partners are in terms of The Race to Dubai given what has happened with Leisurecorp, is it now with Nakheel, or does the Leisurecorp brand still exist or how does that all work?
GEORGE O'GRADY: As we understood it, Leisurecorp is a division within Nakheel now, and we are certainly talking to Nakheel people who assure us our agreements are going to be honored.
Now honouring basic agreements and honouring if you like, all the flower, the flower isn't in the deal; that is, the extra bits. They are committed to what we have done. They think the knowledge of where Dubai is, the marketing of Dubai, has been tremendously successful in the deal so far.
There has been a slowdown in property in the Jumeirah Estates development, and that is, if you like, under review. Further questions they can answer, and you will see in plenty of time to meet all people involved there; they will be here later today, and you'll certainly see them through The Open Championship at Turnberry which as I understand it, the course is immaculate at Turnberry, those who have been and seen, and I'm told that the hotel will be finished.

Q. Will the money that's coming to the Tour come from Dubai or will it come from Abu Dhabi?
GEORGE O'GRADY: You'd have to ask them, as long as it comes, I don't mind where it comes from. (Laughter).
I think ours will come from the Leisurecorp, will come from Dubai World, which Dubai World owns Leisurecorp, and Nakheel and that's where our money is coming from. The money that we agreed for this week is all paid and in the bank. Half the money for our physiotherapy truck, which you're all welcome to go and look at which is now The Race to Dubai Physiotherapy Truck, half of that's been paid, but that's on target. The other second half wasn't due to be paid till the middle of the year anyway.
So it's tough times for them I think, tough times for a lot of people in the world, but it's continuing.

Q. And the flower you referred to, is that kind of setting up the international headquarters in Dubai?
GEORGE O'GRADY: The international headquarters, it's not a matter of a race for us to get it built by a certain day. That will go a little bit slower. The player performance center over there is on track, but again, it doesn't have to open by a certain day.
The flower can be extra investments in all of the other things they want to do. If they are going to develop venues around Europe, you know, in this particular market, is not a good time to necessarily start building something fresh.
Every day I look at Ireland, another big resort development goes to the wall, and there's plenty of existing ones if you want to go into this, that you can pick up now, and at the root time, we'll take a view there.

Q. The European Tour has expanded dramatically over the last few years, but here in England, if what you said is right, next year you could possibly only have one event in England, just a message for the fans who obviously went out in thousands at Wentworth last week and have come here again this week, what is the future for tournaments in England?
GEORGE O'GRADY: I think the future is realistic. We will be even more committed to keeping the PGA Championship going, certainly at Wentworth in the short term. Has not been totally easy, if all your Members don't play. BMW need to know it's our Flagship Event, and it's certainly run like the Flagship Event; and the commitment of Richard Caring to now dig the greens up and redo them, and it's got to be done right.
I pay tribute now to when we started at Wentworth with the championship, the great champions of the day, Severiano Ballesteros, Bernard Langer, Sandy Lyle. All of the guys agreed with Ken Schofield and myself, if we ran the PGA Championship really well, because at the time we brought in very Volvo and prize money was significant, and preferably higher than anybody else, they played two events without any negotiation, which is the PGA Championship and the Volvo Masters. As of then we had the Volvo bonus pool and those players who made the Tour played in it all the time.
We have to get back to a situation where our PGA Championship, where every player who is a member of the Tour wants to play in, and we can be actually proud of it and we have to get there because we have to keep the BMW's of this world onside.
Now, when you come to a situation like the European Open, the other part of our strategy was the PGA Championship at beginning of the year and the European Open at the end of the year; European Open has had to change its date. The world of golf has changed dates. The FedEx series have come in. The European Open can move anywhere in Europe, and it's a wonderful marketing tool.
Together with our severance with Smurfit, we had some money to keep it doing for a couple of years, and when we needed the help, a part of Leisurecorp's deal was to invest marketing funds in other tournaments that suited their strategy. That's slightly what I mean by the flower. You know, this is to assist the Tour, development of the Tour.
Now we have had to use a bit of that assistance here. It certainly worked with Leisurecorp's strategy to develop a title called The European Open, and at the moment, we have used their money to assist us, as well, and it's enabled us to find our way through an agreement with The London Club. So it's all part of our longer strategy, in what is a very, very difficult economic climate.

Q. You can see what I meant, though, you can see the hunger to see the players, last week and this week.
GEORGE O'GRADY: Well, The Open Championship does go Scotland/England, so The Open is coming down here in 2011, and it will be in Birkdale, Lytham and Hoylake.
And we want to keep the PGA Championship going. Ideally we'll bring the British Masters back, that is another big title. Scotland seems to have the run of it at the moment, but who knows; you have venues like this, venues like The Grove, The Belfry, the ones in the Midlands, Lancashire coast, plenty of places that things can happen but if you like, have to weather this patch.

Q. Could you make a comment on your relationship with Asia, has it in any way changed, is it as healthy as ever, and are there any likely changes to co-sanction tournaments?
GEORGE O'GRADY: I think Asia is always a work-in-progress, and Asia, with the OneAsia Tour and the Asian Tour and the perpetual spot we are placed on, a lot of the people in Asia are coming at us all the time for tournaments, as long as we are part of it. And then they are busy fighting their own problems between OneAsia, management groups, and then the Asian Tour. Traditionally The European Tour should partner with another player's organization, and we shouldn't be led by managements, TV, marketing companies and all that sort of thing.
In the last week, we talked to Australia, we talked to the OneAsia Tour, we talked to the Asian Tour, they want the Australian Masters cosanctioned and can't get it done, their prize money is the lowest on the whole of The European Tour. We have players thinking we are making them go all the way down there for one we can.
We are looking at a lot of different stuff. China wants to partner with The European Tour. The Koreans have been on it. So it is quite difficult to find the correct way through. We might have to decide who we really do need to partner with.

Q. Going back to the reduction in prize money here, have you had any overall view of how many tournaments have cut prize money this year?
GEORGE O'GRADY: Well, I can give it to you lock, stock and barrel if you want me to, but off the top of my head, you balance that, you balance the ones that are cut, which are realistic, Italy cut their prize money. In a week against THE PLAYERS Championship, I might say, when a lot of our top players, we helped them to get into THE PLAYERS Championship, but we brought BMW in, if you like, as the lead title sponsors. That secures the Italian Open going toward. So it's realistic.
I don't see them as prize money cuts. I see them as their realistic cuts so that no one is, if you like, losing two great sums of money. These are complete reality to keep a circuit going, certainly at home. The Spanish Open was up to 2 million Euro, really good golf course, and got the fundamentals of an event sound.
The Irish Open, in this market; I had a lovely thank you from Rory McIlroy's Mum for keeping the Irish Open going so that her son could possibly become Irish Open Champion. Because I tell you, that took hours. In fact, hours isn't even fair; days, weeks, to bring Ireland together. If there are any Irish journalists are in the room, I think they would understand the situation that country finds itself in; Karl, am I exaggerating or not?

Q. Not in the least.
GEORGE O'GRADY: Thank you. And then, it might have been our fault in the week when the weather wasn't great, but occasions like that a bit later as well. It is there. It's now preserved, and it's hopefully got a future when the chief executive of 3 comes to Wentworth on June 11.

Q. Believe it or not, this is not a question about an Irish tournament or the Irish Open. But another one, the Volvo World Match Play, it had a problem with the date. Is that going ahead the way you would like it to be and can you tell us what kind of a field they might have there?
GEORGE O'GRADY: Somehow we managed to find a date which they are happy with, and I think you'll have to ask the promoters of that event how they are getting on.
It will be almost certainly co-sanctioned -- well, at the same time, there's a co-sanctioned event in Singapore which is not announced yet, but that will be announced in the next couple of days. They should get a very good field I would have thought.

Q. Just on the co-sanction, the Singapore Open will be European?
GEORGE O'GRADY: We are hoping to. Singapore have asked us to; the Asian Tour asked; everybody is asking us to. Just someone needs to say, whoever is finally allowed to, needs to say yes. I was approached by Bob Diamond, the Chief Executive of Barclays at the Masters last year, and Barclays are big supporters of the Scottish Open, as well, and they want to.
I think it the last minor details are just being finally agreed, and that's part of our strategy. We can't have The World Match Play event in a single week for 16 players without something else beside it. They were originally in a date which they were completely offered and agreed to, which would be the week after THE TOUR Championship, and they were advised that you never know what America is about to do; and America moved their TOUR Championship into the week they were given. Suddenly they want everybody else's date. So just have to go at our speed, I'm afraid.

Q. Just to belabor the flower image, the deal with Leisurecorp, there was a treasure chest of 70 million which I thought was supposed to take care of shortfalls and prize funds and things like that; is that part of the flower still there, or is it now a piggy bank?
GEORGE O'GRADY: I think Leisurecorp, they announced the amount of money they had. It's not to take care of shortfalls; it's to support events both as and when Leisurecorp and ourselves thought it was a fit. And they have been involved in South Africa, which supports their reasons. They have looked at other opportunities. I think they have had a bit of belt-tightening.

Q. So it's not there anymore?
GEORGE O'GRADY: Belt-tightening; this is a five-year deal. By the end -- I think it's well chronicled. I've said this before, you read the business pages or you read the financial times, no one is deluding ourselves that it comes through, and there's times when it comes to it, this is realism, and the amount of money that's come in here; plus their marketing ideas, which suit us in terms of giving everybody a really nice day out by having, if you like, free admission, or largely free admission, I think works.
The whole deal is a work-in-progress in a realistic, tough market.

Q. You stress the importance of the top players playing in the PGA Championship earlier. What is the future of the PGA Championship at Wentworth if Garcia, Harrington and Poulter and others on The Ryder Cup Team continue to the to play in it?
GEORGE O'GRADY: I think it would be disappointing if when the investment of their owner to completely redo the golf course if we can't persuade them to play. No problems with Ian Poulter, who played several years when realizing he had not had a good finish; and certainly Sergio -- it's not just Sergio. Sergio plays at certain events which are absolutely critical for the Tour. Padraig we want Padraig to play and he's told us he will play. Can't get to grips with the greens. Padraig supports a lot of other tournaments really strongly. Volvo Masters he's always played.
I think there's a lot of other people that are Members of The European Tour that we have got to address as well; Trevor Immelman. If they want to be Members and play The Race to Dubai, Ogilvy, all of these other guys. If you are taking up Membership; I think if I respond to what the players say, Retief Goosen has spoken to me, he doesn't play well at Wentworth in the spring. He's said he feels if he's a member of The European Tour; it's his duty.

Q. It sounds like you're moving towards or the players committee might be moving forwards making participation of the PGA Championship a compulsory condition of membership of The European Tour?
GEORGE O'GRADY: I think there's a lot of people on the Tour who have different ideas from time to time and they come around. I think BMW in this market can crack the whip reasonably. I think people can see what they have brought to the tournament in terms of presentation, in terms of the staff for the public who come to the tented village and on the golf course and on the score boards and all that sort of thing. They are way wonderful sponsor to have in our portfolio, and we have a lot of other really good sponsors that.
One in particular has to be the Players' Flagship. And that's why if quite frankly we didn't have the investment at Wentworth into the greens now, and we promised that this time last year, we might have moved.

Q. But has that been discussed?
GEORGE O'GRADY: Oh, absolutely. Absolutely. Last year was critical when we played The London Club; would the course be well received by the players.

Q. Sorry, Mark's question about whether making it compulsory?
GEORGE O'GRADY: Has not been discussed formally, no.

Q. But it has been informally?
GEORGE O'GRADY: Well, you have masses of different ideas from different players at different times, but not in a -- by formal, in a Tournament Committee setting, no, it has not village discussed, they leave all that to me at the moment.
RODDY WILLIAMS: George, David, thanks very much, and Charles Fairweather, chairman of The London Club.

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