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September 23, 2009
LAURA HILL: We'd like to welcome Commissioner Finchem here at the TOUR Championship presented by Coca-Cola. I know you have a few opening remarks here at the finale of the FedExCup, and then we'll open it up for questions.
COMMISSIONER FINCHEM: Thank you for joining us this afternoon on this nice, sunny, bright, non-rainy day. I'm going to cover a few things and then be happy to answer your questions. This is basically about our take on the state of the PGA TOUR at this point of the year as we close out the FedExCup part of our season.
I would like to thank, again, Tom Cousins and the East Lake Foundation for their hospitality this week, Coca-Cola for their continued sponsorship and commitment to the tournament, and going the extra mile to promote the tournament, and our partnership with Southern Company, as well, for the TOUR Championship, as well as their very special commitment to the continuation of the Payne Stewart Award, which we congratulate Kenny Perry on his receipt of last night.
I think that as we look at this part of the FedExCup season, the Playoffs, we're certainly pleased with -- we'll see how it plays out this week, but we're certainly pleased with the way it's come along during the course of the year. I think gradually fans have gotten their arms around this sort of three-tiered system where we have a base amount of points to be earned during the regular season portion and then increased number during the first three Playoff events, and then resetting for a more open competition among the players who have played well enough during the first two stages to get here to Atlanta.
We note that there are five players who can win with a win, but everybody has a mathematical chance to win. You know, we're getting a good reaction to that from players, from fans, and it seems to be playing out pretty well. We'll see what happens after we get going tomorrow.
In terms of the response to particularly the Playoffs from a FedExCup standpoint, while we as a sport are primarily interested on the cumulative viewership from a television standpoint, total number of people who tune into our telecast, we are obviously interested in ratings, as well, which is a measurement of the average point in time during the course of the telecast.
Interestingly, these first three weeks our ratings are up 77 percent over last year, which is a very nice increase. But going back to before the PGA Championship to Bridgestone, we've had a steady week after week after week of increased ratings, including Wyndham, which had a 50 percent increase in its rating.
The activity on our website -- I should say that in the Playoffs we've had an average of 77. Chicago was up 120 percent over last year. And our website traffic, we've had on average about a 75 percent increase in unique viewers during this first three weeks of the Playoffs versus last year.
In addition to that, we promoted and got a very strong response to our new iPhone application that we rolled out in the Playoffs, and from the standpoint of our new media platform, we view it as just a tremendous success.
It's also interesting to sort of kick around the notion of Player of the Year with an eye on what happens this week. The Player Advisory Council will say grace on a ballot that goes out at the end of the season after the Fall Series, but at least at this point in time where we have eight multiple winners, and six of those eight in the Top 15 going into this week, it would indicate that the four major winners are between 20 and 26, it would indicate that a win in the FedExCup could, in fact, have an impact on the players' vote for Player of the Year this fall.
As we talk about this time of the year, we're also focused on The Presidents Cup in a couple weeks. Everything has come together, I think, very, very well. If we go back since 1994, I think the preparations for this Presidents Cup have been the best. I've said this before, but I'll say it again, I think Greg Norman and Fred Couples have been tremendous captains. They've both put a lot of energy into preparing for the competition. They've put a lot of energy into their captains' selections. They've also gotten involved very hands-on in the staging of the tournament. They've gone out of their way to help promote what the Presidents Cup is.
We went together with them over to the White House two weeks ago to visit with our honorary chairman, President Obama. They've just gone out of their way. I think it's tremendous.
And given the personalities involved with those two guys, I think it sets up for some very interesting back and forth as we get into the matches in two weeks.
We would like to publicly, again, thank President Obama for his honorary chairmanship position, and we look forward to having Governor Schwarzenegger and Mayor Newsome from San Francisco with us at the Presidents Cup, as well, and some other interesting guests that will be there, including Condoleezza Rice, who's a member of our host committee.
In addition to all that, our Fall Series kicks off next week at Turning Stone, and we'll look forward to the players having an opportunity to qualify to the Top 125 positions for next year's FedExCup.
A few words on the state of the TOUR from a business standpoint, you know, I think that -- I just did an interview with CNN, Larry Smith, and he mentioned the words "doom and gloom" of a year ago when we did a similar interview, and I think if there was one message about the economy today that the doom and gloom has largely been replaced by very strong concern about the existing economy but much more a forward-looking focus to people involved in business around the country today, which allows you to get some business done.
We are getting some business done. A number of you have asked me many, many times in the last 12 to 18 months about my take on the impact on the PGA TOUR business from the standpoint of the economy, and I think that -- I think the reality is that -- the good news is we've had a lot of good extensions. We've had extensions well out into the future. I think we're going to have some new sponsors, additional new sponsors, over the next two or three years.
We will have a good solid schedule for 2010, we know that. But I think it's also important to recognize that marketing budgets are still down, and with the underlying economic factors stable but not getting worse, that's good. But it's certainly going to take a while to improve. We can anticipate pressure on marketing budgets at many, many companies as we go into '10 and maybe even '11. I suspect it's possible that we could lose a couple more events. I think it's likely that we will lose some title sponsors, and they'll need to be replaced. But thus far we've been able to handle that.
I think on the Nationwide Tour and Champions Tour we're seeing a consistent presentation and a consistent sponsorship level, so we're pleased about that. And to sum it all up -- and then on the charity side, while our charity numbers are going to be off 14 or 15 percent this year, they will be north of $100 million easily, and we think that bodes well. If our tournaments in this environment can raise $100, $105 million, $108 million or a number close to that as we finish out the year, it means that they can perform well in the economy at this level. As the economy turns, we ought to be able to bring back our growth pattern to our charitable impact.
In a nutshell then, I'd characterize the situation as good, maybe even comparatively quite good, when you look at other enterprises. But certainly we have our challenges ahead of us. And we have to hope that the economy continues its stable situation and doesn't resume a path of deterioration.
You know, I think as we look out five years or six years, we've done well in restructuring our operating reserves for the out years. We're doing well with our long-term planning in each of the three Tours, and we look forward to our television discussions coming in '11 or '12. And that's pretty much it. So I'd be happy to answer any questions that you have about where we are at this point in time.
Q. I just wanted to ask you about when you're talking about all of this, what's the -- is it coincidental to you that Tiger's return to the winning days has led to increased television ratings? And just a word about what he means to golf and what he means to the TOUR.
COMMISSIONER FINCHEM: Well, I mean, it's not coincidental. Tiger draws ratings, there's no doubt about it. The good news for us is our tournaments this year when Tiger didn't play early, and some more recently where he didn't play, are also up. So our overall television audience is up. That's good from a trending standpoint.
Having him back, candidly, does a lot more than just television ratings because you all write and communicate more about the sport when he's around, he generates a lot more interest in the sport, whether he's playing or not, typically.
When we're with a bigger audience, we can promote the sport for the next week when he may not be playing and he brings new viewers to the sport all the time, so he has a dramatic impact on our success as you would expect. Having him back is huge. I also think I've mentioned in the last few weeks, I think as he was out for an injury, he absolutely captivates our fan base, whether he's winning or losing and when he's winning big. But for him to come back from injury, it did generate speculation on whether he'd be able to play, was the knee going to hold up, would he be able to swing the club as hard, et cetera, et cetera. You all are quite familiar with all that.
And I think it added an interesting element to people wondering how he would perform. I think he's answered all those questions, although you still hear an announcer or two say, well, he looked funny on that swing, I wonder if it's the knee. I think that's another element that's created some interest. So I think it's all very positive from a Tiger perspective.
Q. A couple completely unrelated questions. Since you made the ruling on the grooves in D.C. a few weeks ago, some of the manufacturers have had some prototype clubs shot down by the USGA, so I was wondering whether there was any reason to rethink the January 1st start date?
And the second part is I'm wondering whether the Wal-Mart news on the senior circuit has any effect on the sponsorship at Disney at all.
COMMISSIONER FINCHEM: On Disney? Yeah, it could. Right now we're working on filling that bit of a hole, and we're optimistic that that will be done.
As far as grooves go, no, we don't anticipate any reason to postpone at this point in time.
Q. When the Olympics were held here in Atlanta, you were part of a press conference down in Augusta that we're going to kick off the idea in the Olympics and all the different golf bodies were together. Now that the Olympics may be back in an American city, golf looks like more of a sure thing to make it to the Olympics in 2016. I was wondering if you think that was maybe the first step to a path that's allowed golf now to be on the very verge of getting into the Olympics?
COMMISSIONER FINCHEM: You mean the announcement at Augusta?
Q. Well, was that the first step in the path? It's taken you guys obviously a decade or more than a decade to get where you are today. But is it just a long process to go?
COMMISSIONER FINCHEM: No, I think the real -- the leadership of the IOC has been consistent both with Samaranch and the current president, Rogge, with respect to having a very strong interest in golf joining the Olympics. I think that is perhaps the spark, if there is one.
The process -- the two processes were very different. In the case of Augusta, that was an effort brought forward by the Atlanta organizing committee. The process of adding a sport has changed dramatically since that time. An organizing committee can't bring forward a sport. I mean, they can make recommendations to the IOC, but there's a very different process, the one we're just going through. You make a presentation, you're reviewed by -- you make a cut. You make a presentation to the executive committee. The executive committee can recommend, in this case, up to two sports or none, and they recommended two, us and rugby, and then the IOC votes. It's an up-and-down vote. It's very different than what happened at Augusta.
And of course in the Augusta situation, we announced with the Atlanta Organizing Committee it was going to happen. Obstacles were raised in Atlanta, and the IOC and the Atlanta Organizing Committee got to be late, and they decided it just wasn't worth the effort. This is also fundamentally evident because the IOC has approached this from the standpoint of a very methodical, strategic look at what a sport brings to the Olympic games and where are sports going, and so we've been through a two-year process on that.
We're certainly hopeful that we get the vote. And the reason for that is we've become convinced over the last couple years that joining the Olympic program will accelerate the trajectory, raise the trajectory of growth for the game around the globe. I'd say everywhere, but certainly and significantly in Asia and eastern Europe. And that's good for the game. Anything that grows the game is good for the game in my view.
I think it'll also help over time to add diversity to the game, and it will add an image of athleticism to the game, which will be manifested by countries who are focused on winning medals and building athletes. It'll add a whole other dimension, and I think it's very positive.
So we're hopeful. That vote is on Friday the 9th from Copenhagen, which -- I guess Ty is in the back of the room. We're going to hear about that at what time of night?
TY VOTAW: In San Francisco it'll be around 3:00 or 4:00 in the morning.
COMMISSIONER FINCHEM: Yeah, so any of you who aren't doing anything stop by my room, and we'll have a cup of tea and wait for the votes to come in.
Q. When you mentioned the possibility of losing title sponsors next year, is it possible you could go through next year without losing any? And what would be the number of title sponsors you might lose before it starts to really hurt?
COMMISSIONER FINCHEM: It's possible, I suppose. We have a lot of tournaments up in '11. I don't think it's possible through '11. I just think there are too many companies that have issues, although they all want to stay with us now. But I think that it's highly unlikely we would go through '11 without some turnover.
Now, we don't have a problem with changing sponsors. We don't want to. We like the continuity. It's just that especially in a downturn, it's hard to sell through to already-reduced marketing budgets. But I don't have a specific number.
We just -- there's no point in worrying about that. We just continue to nurture potential replacements, which I think our team, Tom Wade is here, and his team, are doing a good job and putting a lot of energy behind that. So I think we can withstand a number of changes. How many would depend.
When you talk to a title sponsor about sponsoring a tournament at this level, they have their own ideas, time of year, geographical location, kind of tournament, and it's not just -- because they're all not vanilla. Our tournaments are very much different.
I've had companies that really want to do a sponsorship with us, but they only want to be in one part of the country, and they only want to be a date other than this because they're getting ready to reveal their earnings report. Different companies look at things differently. So it's hard to know. Even if we had eight sponsors that -- ten companies that are saying to us, look, we want to figure out a way to do this if you have an opening. It may not be an opening that works for any of them. So we just have to see.
But I think that at least currently, I'm very confident that we're going to be able to weather whatever transition emanates in this area. I feel good about that right now.
Q. You kept talking about '11. Are those the title contracts that run through '10?
COMMISSIONER FINCHEM: Yeah, most of our contracts end on even years, so we have a number through '16, we have a growing number through '14, we have a bunch through '12, and we have some through '10 that are yet to be extended. And some of those it's just a matter of getting it done, and some of them there are question marks with how the company is doing.
In those cases because they want to stay, they're kind of also in a slow-play mode. They don't want to bring it to a head because they don't want the answer to be no, so they like to wait, things get better, revenues get better, their budgets change. '10 will be an interesting year on that front.
But we've been working hard on replacement possibilities, and as I say, I think that we're going to be in good shape.
Q. There's a couple of scenarios, one that's actually quite possible, where you'd have a player not win a tournament all year but could still win the FedExCup. Just curious if you think -- are you okay with that? Is that a loophole that might need to be looked at? As the points have fallen out now, you see how those scenarios might evolve.
COMMISSIONER FINCHEM: I'm not uncomfortable at this point. I think that -- I'm certainly not uncomfortable with the idea that a player could come from a reasonably good year without winning a tournament and win the Cup. That in and of itself -- it would be odd to try to somehow legislate against that. I think that the important things are still the fundamentals. Is it a system that pulls the season together? Is it a system that playing all year long matters? Does it give -- does it make it easier to get there if you win, which it does. Can you position yourself -- does it recognize the winners of the big tournaments in a reasonable way?
To have the kind of system that we want, which is multiple tournaments, all the best players in the world performing, which those are fundamental things, when you get into -- it's a question of degree. There isn't any yet right or wrong in this area; it's a question of degree. So for example, we wanted more volatility once you got in the Playoffs; we got it.
Some people raised an eyebrow, when Heath Slocum moved from 124 to where he did overnight, and so they might argue that you've gone too far on creating volatility.
The other dynamic here is how interesting and exciting is it to the fans, and so far this year we're pretty pleased with the answer to that question. So we'll see how this plays out.
The only thing I'm sure of or generally certain of is it will probably work out in some way that we haven't talked about yet. (Laughter.) Tiger won't win by 10. Somebody in the Top 5 won't win and win it. There will be a three-way playoff with somebody that hasn't won and somebody came from nowhere. I don't know. It'll be interesting to see. But it'll be fun.
Q. You spoke about nurturing possible replacements as title sponsors. Given all the problems that have beset the automated and banking industries, just wondering if you had met with a particularly positive response from any other sectors as potential sponsors.
COMMISSIONER FINCHEM: Well, we are talking to other sectors, and certainly some of the companies we've targeted as potential replacements are in other sectors. But we feel like there is a great future, continues to be a great future, for us in the financial services sector.
I think the rhetoric that emanated from Washington in February has been muted largely. It doesn't appear that Washington is going to try to tell companies, even if they have investment of tax dollars, how to market their products. These are companies that have had a long history of marketing very well. That wasn't the problem that got us into this mess.
You know, everybody looks at General Motors, which needed significant financial assistance, and yet they were selling more cars than anybody in the world for all of our lifetime. So it wasn't their inability of building a good car and marketing the car. There were other factors that led to their problems.
The basic elements are still there. The value proposition of the PGA TOUR is still very strong. There isn't another sports marketing body that equates to the branding, the advertising, the quality of the audience and the business-to-business platform that you can generate if you title sponsor a PGA TOUR event and work at making it work. It's the best. And that's why we're successful in downturns because you cut the budget by 50 percent, 50 percent of what you were spending has to go away, but yet we pretty much stay in there because we pencil out in value very well. And hopefully that will play out for us again during this stint.
Q. You mentioned the feedback has been positive on the Playoffs and the general consensus seems to be year after year they continue to get better, yet the system still seems hard for the casual fan to follow. Is there any room for improvement in that area?
COMMISSIONER FINCHEM: I'll give you a candid answer to that. I don't want to be flippant, but I think it depends on the fan's level of interest in detail. Some people say, well, wouldn't it be easier if you just took the Money List. Well, yeah, but then if you ask somebody, well, should a major championship count more than another event, you'd say yes. Well, the major championships don't have the highest purses. So then you say, well, let's double the money or something.
So there isn't any perfect way. It really depends on -- if you're only interested in, say, who has the most points, who's going to move from that position as you get in the Playoffs, given that there are more points available, and this seems to me it's pretty simple this week. That fan is probably saved. If you want to delve into the details and say why did a major championship get this many points and the player get this many points versus any other week, because we make the arbitrary view that it's worth more.
We just have to keep explaining it, I think, and gradually people will want to spend more time, go on line and study it and evaluate the different point configurations in tournaments, three different sections of the season.
But you know, whatever system we put out there, I guarantee you there will be some fans that say, you know, this is a lot for me. Unless you just make it the same number of points every week, all week, all year long, and we just don't want to do that. We're not going to give that up just from the standpoint of making it simpler. I think people will understand who won this week and why.
Q. Not to get into details, but are you aware that Tiger could have sat out the first three playoff events and still been seeded as high as No. 3?
COMMISSIONER FINCHEM: No, and I'm glad he didn't.
Q. Are you comfortable with that?
COMMISSIONER FINCHEM: Tiger is pretty adept at this. Tiger's view was his best chance of winning was to play them all and make sure he was the No. 1 seed. I think the No. 1 seed has an advantage this week. It's like I've always characterized as kind of a home field advantage. You can still get beat, but you've got an advantage. Tiger usually plays to have an advantage.
Q. I was just wondering based on that possibility if you had ever considered making it a requirement that you play every event to be eligible for the Cup. It goes against the contract thing, but this being a little bit different.
COMMISSIONER FINCHEM: I think we're pretty much past that now. I and our sponsors really don't have too much of a concern in that regard.
But to your question, I mean, as we got into the Playoffs, a number of people asked me, well, are you aware that Tiger could win the first three and not win the Cup. I think that's what we're trying to do here. We're trying to have excitement with lots of possibilities. You've got to beat the best, you've got to beat them regularly, and you still have to turn right around and perform here with an advantage, and that's the system we like the best of anything we see.
Q. What do you think it would mean to win the FedExCup, and what I mean by that is it's hard to call it a season-long point race when there's so much emphasis on the final month, which is what Playoffs are supposed to be about. But what would be the significance of the guy who won the FedExCup? He will have just done what, besides get a big check?
COMMISSIONER FINCHEM: Well, he's going to get a big check, but if you go 15 years into the future and you look back at the 15 guys that won, and I can say there are about two right now, Tiger Woods was the best player in '07, and Vijay was the best player in the FedExCup in '08. The guy who wins this week will perform the best when he has to perform in the FedExCup in '09.
All you're doing from day one until today is positioning yourself to have the best possible chance against 29 other guys who had to work that hard to get there. That's what we find exciting about the system. That's what we want; we want fans talking about the system. We want fans talking about the competition, and we want them watching it on television. That's what we're after.
We're not after a system that answers all these kind of questions. That's not what we're about. You could argue that until the cows come home, and I think that's great; I think you should. I think the BCS is blessed to have the kind of controversy they have. Everybody talks about it. I hope we get talked about as much and people are strong-willed on both sides and very vocal about it and write blogs about it, talk about it, go on TV shows, and argue about it. It's great. That's what we want.
Q. Along those lines, what happened at the BMW with Snedeker on the 18th, is that the type of stuff you envision that -- I mean, people were talking about it.
COMMISSIONER FINCHEM: No, I did not envision that. But I think with Poulter and Snedeker down the stretch, does remind you of watching qualifying school, where you've got so much on the line, whether you're going to get a card or not, and how many guys come down to that 18th hole year after year after year and have a hard time delivering. I mean, it's compelling to watch. If you've never watched qualifying school, you ought to watch it. It's amazing.
That was my reaction to it. There was a lot on the line. It has that effect.
Q. Someone could have a putt on the 72nd hole worth $11.35 million. How would you handle it if you had a putt worth $11.35?
COMMISSIONER FINCHEM: Well, how long is the putt?
Q. Let's say a million a foot, 11.35 feet.
COMMISSIONER FINCHEM: Closest I ever had to that was in some sort of Ryder Cup team competition one time. I was in the last group. I was 1-up. If I make a three-footer, we win the matches, and if I don't, we go to a playoff. I didn't sniff it, and there was no money involved. So I think I'd be history on a 11-foot putt.
Q. I just want to be sure I understand you. When you first broached the subject of sponsorships, you said it was possible to lose a couple of events. Now, you could lose a couple of sponsors without losing a couple of events.
COMMISSIONER FINCHEM: Yeah, it's two different things. I think it's possible we could lose a couple of events. It's probable that we're going to lose some sponsors. They're two different things, really. You lose a title sponsor to an event and you can't replace -- you can't keep that particular tournament going -- well, Buick Open going to the Greenbrier is a good example. In losing the Buick Open sponsorship, we also lost a tournament, and we replaced it with a new tournament. There may be some more of that ahead, I don't know, but it most likely will be some more sponsorship loss.
Q. Is it possible you will be down a couple of events next year in total? That's what I would mean.
COMMISSIONER FINCHEM: Unlikely. Unlikely.
Q. When do you think the schedule will be released? Or do you have a rough idea now?
COMMISSIONER FINCHEM: Rick, when are we going to have a schedule? Not too long. We have a board meeting November 1st. Probably right after that.
Q. Do you still look at the Fall Series as a separate thing, or are you looking at them as potential tournaments that could fill in whatever gaps you might have during the regular portion of the season, assuming it's a fit for them?
COMMISSIONER FINCHEM: Well, I think it's its own thing because it does a certain number of things. But just like any other week, you have a tournament that starts out as an event opposite World Golf Championship or something, and then it blossoms into something that is deserving of its own date just because it's demonstrated strength, et cetera, et cetera. So it's both.
LAURA HILL: Commissioner, thanks for joining us.
End of FastScripts