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February 3, 2010
PACIFIC PALISADES, CALIFORNIA
LAURA HILL: We'd like to welcome Commissioner Tim Finchem to the interview room here at the Northern Trust Open. I know it's been a couple weeks since you came in and addressed the media, so we'll give you an opportunity to make some opening remarks and then we'll open it up for Q & A.
COMMISSIONER FINCHEM: Thank you, Laura. Good morning, everyone. Laura tells me we're on a hard stop here at 11:00, so I'm going to make some brief remarks and see if I can answer your questions. I know you want to talk about the grooves question, so I'm going to just get to that in a minute. I would like to preface that by saying that first of all, we're excited about this week. I think this tournament is -- the Northern Trust has made great strides in the last couple years. They have developed to be the kind of quality title sponsor that we had hoped and assumed they would be. They're putting a lot into this.
But importantly, the community has responded, Jerry West getting involved, the development of the Legends Club, I think bodes well for the future of the tournament, the growth of its charity commitment. And the quality of the staging I think continues to improve, as well.
We have a great field this week, and we're looking forward to a great tournament.
These past four weeks have been a great start. I think a very interesting start competitively with Geoff Ogilvy winning the first week; Ryan Palmer coming through for a win; I know because of our overall affection in golf for the Haas family, watching Bill win was a real highlight, and beginning to see Bill as a future star; and then Ben Crane, a really good finish in San Diego, as well.
I think it's important to thank Farmers Insurance for their commitment last week in San Diego. We had a ratings increase in San Diego last week in television, so for both reasons it was a good, solid week for us.
Just generally, to restate where we are in the economy and sponsorship, we've had a good run here in the last couple months. We've now extended or brought new sponsors in to 15 major positions for the future, including the addition of the McGladrey tournament we announced a couple weeks ago, and when you step back and look at 2010, we're pleased that our playing opportunities are very solid compared to 2009, our prize money is very solid, at a par or maybe up a few dollars from 2009, which we're extremely pleased with in this environment.
On the charity side, while we were off in 2009 off of our record year in 2008, moving from $125 million to $109, we anticipate a very solid rebound in 2010 to probably halfway back to where we were in '08, maybe further in 2016, 2018, to perhaps $116, $118 million, maybe even $120 million.
On the charity note, we are, as you know, with our new initiative "Together, Anything is Possible" putting a lot more emphasis in reaching out to corporate America and individuals in communities to join with us in our charitable efforts at tournaments around the country. We have launched Phase I of the new website that incorporates a recognition of what players are doing on their own with foundations and charitable events. We will be launching Phase II here in a few weeks.
But if you go to that new site off of pgatour.com, there's already a video on there that tells the story of what the Northern Trust Open is doing to change lives here in Los Angeles, and that will continue to grow as we try to play out -- continue to play out what tournaments do and also focus on what our players do as part of a broader charity platform.
With that said, I will turn to the groove situation. We had a player meeting last night on this. I'll share with you a lot of what I reviewed last night with the players, and then I'd be happy to answer your questions.
The question of grooves in competition on the PGA TOUR has been a matter of the last 25 years. It started with the evolution of U-grooves in the 1980s. The evolution of the U-groove created an iron club and a wedge particularly that generated more spin. It led to two different lawsuits. The USGA tried to ban U-grooves, but they went at it by changing the rules as it relates to the edge of the U-groove. That was challenged in court by Karsten Manufacturing and subsequently led to a settlement, and that settlement still is in force today, which impacts things like the current rule.
In addition, the PGA TOUR a couple years later just passed a rule to eliminate U-grooves. That was challenged by Karsten Manufacturing and led to a settlement, and that settlement did not include necessarily a ban on U-grooves, it just said if we make a rule that differs from the USGA in any instance, we have to go through a certain process.
So that's kind of Phase I of the groove history. Phase II of the groove history is what happened between those two lawsuits in 2009. And what happened in those years was that manufacturers continued to generate their technical capability to build a better and better club generally, and with respect to grooves, continued to escalate the capability from a manufacturing standpoint to create a sharper groove, a sharper edge on the groove, which led to an ever-increasing spin generation available to players.
Five or six years ago, the USGA set out on a course to pull that spin rate back. That led to the current rule.
During those years and actually in all the years since the settlements and lawsuits, the PGA TOUR has been supportive of the notion of pulling back that spin rate. One of the reasons, not the only reason, but certainly one of the reasons was a growing lack of correlation between driving accuracy and scoring performance. That rule went into effect January 1 of this year. Because of the lawsuit, that rule had to include the Ping Eye 2 clubs manufactured before 1990 were still legal.
As we made the decision to adopt the competition or the condition of competition for our rules, we evaluated that, and we made the determination to move ahead with it.
I think on the part of both the USGA and the PGA TOUR, we did not anticipate a wide range of usage of the Ping Eye 2 as we evaluated that rule. We didn't like it because it does generate a spin rate somewhat higher than the new rule. Significantly lower than grooves available last year but still higher than the new rule.
I'll come back to that in a minute.
A couple of things have happened since then. The first thing that happened was that last year manufacturers across the board stepped up to make this rule work. They generated the equipment necessary, they got it in the hands of the players. The players had an opportunity to experiment and prepare to use it. Many converted to the new grooves last year in many cases, and the manufacturers did what they needed to do, and I think they need to be commended for that.
Players stepped up and got a hold of the equipment, got ready for the new rule, put it into play and were ready to go the first of the year. We basically had no issues during the first four weeks, until the fourth week. But that was then. During these first four weeks, we have had five players -- we've had 218 different players play those four tournaments. Of those 218 players, five different players have actually used a Ping Eye 2 manufactured before 1990; not a huge amount of usage, but a number that was sufficient to create a fair amount of interest, particularly when one of the best players in the world in the short game area chose to use it, which he was fully entitled to do.
And that focus on the rule has led to a couple of things. One is that there was some unfortunate commentary by other players in the media in the last week or so, and let me just pause there and restate, as I issued my statement last week, these are the rules of golf. Any player is entitled under these rules to play a Ping Eye 2 wedge designed before 1990 if he so chooses. There is nothing wrong with that. There is nothing that violates the rule. There is no hidden direction to players or side direction not to play that club, so there is absolutely no basis to criticize a player for doing so. None. And to do so in our view is inappropriate.
With respect to a particular player that used a particularly unfortunate choice of words, I would say that there is perhaps a mitigating factor to the amount of reaction. There is no justification for certain language being used, but the reaction was stronger than it could have been, had we more intensely last year got in front of players with the details of this rule.
Now, what do I mean by that? Well, two years ago when we instituted our drug policy, we made sure that we were in front of every single player in dialogue on the ramifications of drug testing, on the reality that you could be suspended if you violated the drug testing rules, and the dos and don'ts of staying in compliance. Players paid attention. They came out and performed, and we haven't had drug issues on this TOUR. That's not to say we haven't had a violation; that's been reported. But we haven't had issues.
We didn't act with that level of intensity. In my view, had we, the reaction to the use of these clubs might have been lesser. But that is what it is, and I think we're about to close the chapter on that part of the history of this. Phil Mickelson met with Scott McCarron last night. Phil informed me this morning that he accepted Scott's apology. I know you're going to ask me about disciplinary process. You know I'm not going to answer those questions. That is in the hands of the TOUR and our regular process.
The other thing that's happened, however, is to focus attention on the question of the legality of these clubs that do, in fact, generate a spin rate that's higher than the limitation we have on wedges this year. Now again, the assumption was made last year that very few, if any, players would use that club because they're 20 years old; a lot of good clubs have been made, and I think we underestimated that a little bit. Although there haven't been a big number of players using it, there are a lot of players interested in whether they should use it and some players are practicing with it.
The second thing is that we, I think, are clearly -- we are now in possession of more data about the differential in spin rate, and to put it in layman's terms, if 100 is the number of rpms -- these aren't the number, I'm just going to give you by way of reference. If a wedge club a year ago, legal, could spin the ball at 100 rpms, the Ping Eye 2 wedge, relatively speaking, would spin it at approximately 60 rpms, and a wedge under today's rules would spin it at 50 rpms. So there's roughly a 20 percent differential between what you're allowed to do this year and what a Ping Eye 2 wedge from pre-'90 can do.
Now, you will hear players talk about these things anecdotally lots of different ways because players hit wedges 50 different ways. Their club head speed is different, their angle of attack is different, so different speeds can be generated.
But apples to apples, those are the configurations. So you can look at that and say, well, that's not that much of a difference. Well, in the minds of some players, it is a significant difference, depending on the nature of the player. Some players could care less about this because they don't want to win the ball very much anyway. It just depends on the style of their game.
But the key thing here is that we have a situation where if there is a club available -- legal, that is capable of spinning the ball more than clubs in our current rules, and it is a club that is not generally available to everybody, number one, and it is a club that some players by contract can't play because they have agreed with a manufacturer to play the other club, and in those agreements they implicitly understood that all clubs would be monitored the same way. So that's a problem.
So where do we go from here? We have three options. We could maintain the status quo. We could see if this really does get to be a problem competitively. We could watch how many players play the club -- and by the way, we're already evaluating that very carefully. But long-term it's not a credible option because it raises issues about fairness in the competition.
Second thing is because the language in this rule is generated because of a legal settlement between the USGA and Karsten Manufacturing, we were very interested in the comments by John Solheim over the weekend that he recognizes this issue, and given certain circumstances he might be open to at least evaluating a way to deal with this from a contractual standpoint. And obviously if he were to take that step, it would be a terrific gesture on his part to deal with an issue that is troublesome.
And I've spoken to John Solheim yesterday. I've had a conversation with him. My understanding is he'll be meeting with the USGA potentially in the next week. I hope that meeting occurs. And I can only hope that progress is made in that regard.
The third option is that we do have this process available to us in the agreement that we entered into, which allows us after we follow a certain process, which involves asking an independent committee for an evaluation of promulgating a rule that would differ in some respects to the USGA rule, which would give us the ability after that process is successfully completed, to take out the language that would require us to allow Ping Eye 2s manufactured before 1990 to be used.
The committee in question was actually formed in 1994, within a year of the lawsuit resolution. The reason it was created was because we figured that down the road we might be in a situation similar to this, number one; and number two, we wanted the committee to be formed so it could go ahead and become knowledgeable about equipment issues. That committee, I think I'm correct in saying, if not every year, virtually every year since has gone and visited on an annual basis with the USGA and gotten briefed on developments so they are proficient in their understanding, and it's a very credible committee. I think our office would make that information available to you. It's chaired by Gordon Brunner, who was the chief technology officer for Procter & Gamble some years ago and has other very qualified people on it.
It's a cumbersome process. It's not a process that takes forever. But if we go down that path, there will be a process. I also noted in John Solheim's statement the other day that he specifically took issue with our ability to utilize that process in this instance. We feel very strongly that we do have that option available to us, but again, we're hopeful that John Solheim will look at this situation and take steps that would avoid any of these processes going forward.
That's where we are. I would characterize the player reaction to this to be one of concern to some extent but certainly understanding of all the facts at this point and committed to allowing us the flexibility to move forward to deal with this issue as best we can in the weeks and months to come. But we are aggressively on top of it. To the extent that there is a solution we'd like to find it as quickly as possible.
And with that, I'll pause and answer your questions.
Q. Option number three, you used the word process and committee. It seemed a little vague. Can you kind of run A to Z what that process involves?
COMMISSIONER FINCHEM: This process, I believe, is in the public record, but I can give you the -- you could contact our office. But I'll give you the 30,000-foot overview.
Our policy board would say to the committee, we have this issue, we'd like for you to evaluate it. We'd like for you to make a recommendation or comment on -- there's been another way they would do it, they'd say there's been a recommendation that we go specifically this route, here are the details. We would ask that you evaluate what would be involved in evaluating it, is there research required, is there testing, is there enough data out there or not, what's a budget to do that. They'd come back to the board and say, well, here's what we think we have to do to properly evaluate it. The board says don't do it, or yes, go ahead.
They also provide, I think, a timeline of what it would take time-wise to do that effectively. They then go through that process, and they come back and they say we think it's appropriate for the PGA TOUR to move ahead, or we think it's appropriate, and the factors they look at are stated in the agreement that relate to things like what's in the best interest of the PGA TOUR, are there things that are happening that could be corrected by this step that are negative to the PGA TOUR. So that's the process.
Given the amount of data already generated, given the specificity of the current rule, given the facts here, I would think that they could move in a reasonable time frame. But this is an independent committee and I can't speak for them.
Q. Scott McCarron was not the only player last week that was very heavily critical of players that were using this wedge. You have, as you've acknowledged, known about it for a long time. Why do you think that the players -- do you understand, I should say, that some players will say, 20 percent more spin is the difference maybe between winning a tournament and losing one, and why should somebody have an advantage that I can't have? And secondly, do you not think that -- I know you're a lawyer, but do you not think that the Commissioner could just say, all right, guys, we can't use this anymore?
COMMISSIONER FINCHEM: Well, we are evaluating that in addition. There are a variety of things here that run into the question of flexibility from a legal standpoint, and the lawyers are wrestling with a variety of those kinds of questions. It would just be speculation on my part at this point to comment.
But I do think that -- because I've talked to a number of players on this subject, and I think as I said earlier, I think a fair amount of their reaction was a lack of understanding of all the facts. But that's not really -- doesn't really matter to your point. The question is what we do about it.
There are other things that we might consider, but the lawyers are evaluating those.
Q. Just as a quick follow-up, do you think that Scott McCarron should be disciplined for what many other players said but just didn't say to --
COMMISSIONER FINCHEM: I'm not going to go beyond what I said earlier. I said that criticism generally is inappropriate. I have never articulated publicly whether we have a disciplinary process going forward or not and what the outcome is. I don't intend to do that now. I'll leave it at that.
Q. First of all, can you explain to the layman out there the reason for this rule change in the first place? Is it a matter -- and the negativity out there, is this pretty much just the guys are spoiled due to the technology, and they're sort of going backwards on -- because you want the skill to be there more than the technology to bring those scores? And would you change anything if you knew this reaction now?
COMMISSIONER FINCHEM: Well, I think there's been a growing tension in the game for the last 30 years between technological innovation and people in the game that would like to see more stringent regulation on that innovation, whether it's the distance the golf ball goes, the size of the club head. But if you go back 15 years, there's been a fair amount of regulation in those areas. There are now rules on the golf ball, and the rules on the golf ball have resulted in very little increase in average distance since 2001. So we feel like there's no point in arguing about that anymore in our view.
The same thing with the size of the club head is now regulated. The springlike effect of the club face is now regulated. But there is still a sizable number of people in the game, in the broader context of the game, that think additional regulation pull-back is necessary.
In this particular case, the most striking thing about the difference between the groove discussion in 1989 and '90, which was based on some tests and led to a lack of confidence on the part of the PGA TOUR or the USGA that you could win a lawsuit, in this case there have been years and years of very careful measurement of data, of the lack of correlation of hitting the ball in the fairway and performing well on the PGA TOUR, so it's a very strong case, and I think that's one of the reasons you didn't see a lawsuit amongst manufacturers here, because there is a strong case.
But the by-product -- I know I've read some people say this is a backdoor attempt to create softer balls. I'm not aware of anybody that believes that. But I do think that with this rule we really could relax a little bit about the need to fool around with the ball and the driver for an extended period of time. That's my only view.
And believe me, given the fact that in my 23 years at the PGA TOUR -- I told the players last night, I've been extremely frustrated only five times. Three of them had to do with grooves. So I would welcome the opportunity -- and just an additional frustration is that we all felt that we had this one pretty much behind us.
I think this is a narrow issue. It's getting a lot of attention, but it's still a narrow issue. I think it can be dealt with. I don't think it has -- and should be dealt with, and it should be dealt with as soon as possible.
Q. The burden of proof into this committee seems to be very difficult. I mean, you have to have significant changes in regards to the PGA TOUR and the players. I know you used the word significant once. Do you really think that because guys have contracts that preclude them from not using clubs and they could buy these clubs readily available on eBay is significant?
COMMISSIONER FINCHEM: I mean, the committee is going to be asked whether a course of action is appropriate or not. It's a yes or no as I read the language in the procedures. The policy board makes the decision as to whether to go forward. They just do it based on a nod of the independent committee. So the independent committee can come to its conclusion for any set of reasons. There are some specified in the agreement, best interest of the PGA TOUR, et cetera, et cetera.
As I say, I can't speak for the committee, but if the policy board were to say, we would like to do X, do you think this is in the best interest of the PGA TOUR, which is the fundamental question, and here's why we think it is, but you can make your own evaluation, I think the chances are reasonably good, perhaps more than reasonably good, that that committee would say yes.
Q. And if the committee didn't say yes?
COMMISSIONER FINCHEM: Under the guidelines of the settlement, the committee needs to say yes.
Q. And have you ever used the committee before?
COMMISSIONER FINCHEM: No.
Q. You mentioned that -- you characterized spin rates as a comparative, and spin rates, correct me if I'm wrong, is not actually part of the rule, is it?
COMMISSIONER FINCHEM: No. The rule is based on two things, the volume of the groove measured by detailed format, and the measurement of the edge that takes the surface of the iron down into the groove. Those are the two things that impact spin.
Now, to come to a conclusion on the amount of volume and the radius requirements in this rule, the USGA did spin rate tests. So that was a function of it, but it's not in the rule itself.
Q. And just to follow that up, to clarify, if Mr. Solheim decides that he wants to enact some -- take some kind of action to speed the process up whereby you can level the playing field again on the TOUR, does he have to go to the USGA first to discuss that, or can he discuss that with the TOUR, or how would that process work?
COMMISSIONER FINCHEM: Let me just make clear that I'm no longer a lawyer and haven't been for decades. I want to be clear on that.
It's part of a contract, so it would be a situation where the two parties would agree that that language in the contract is amended in some fashion. It's either taken out or it's waived for purposes of this particular situation. There's different ways they can approach it. But I can only say that since it's a two-party contract, the two parties would have to agree to whatever is going to be done.
Q. I was just curious, the two parties with Solheim, is it you and them, or is it the USGA and them? If he wants to just blow this thing up, it seems like he's got unilateral power to pretty much make this go away tomorrow.
COMMISSIONER FINCHEM: If he and the USGA sat down tomorrow and said we'll take that language out, then we are free --
Q. Problem solved?
COMMISSIONER FINCHEM: They would change their condition and we would have no problem. That would be the cleanest, easiest way. I'll just say publicly -- what's that old phrase about Macy's window? It would be a great solution in a short period of time, not to say there aren't any other solutions.
LAURA HILL: Thank you, Commissioner.
End of FastScripts