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January 25, 2011

Tim Finchem


MARK STEVENS: I'd like to welcome PGA TOUR Commissioner Tim Finchem. Commissioner, thank you for taking some time to be with us today. If you want to start off and make a comment, then we'll go ahead and take some questions. Thank you.
COMMISSIONER FINCHEM: Thank you. It's about three weeks since I had an opportunity to visit with you all, and in that time, there has been a number of questions that have come up, two or three particularly that you might want to ask me about. So I thought I'd make myself available.
I start off by saying we're really excited about our sponsorship here. Farmers and Zurich, are terrific companies committed to being involved here and we're doing a good job with that. We really appreciate the energy that they're putting into building this tournament.
I think over the next five years you're going to see the impact of that. I'm also delighted with the field quality this year, and I'm delighted that we have a number of players who are kind of moving their schedules around to play in some markets they haven't been in in a while. And I think that will help the overall texture of the TOUR this year.
Before I take your questions, I'd just note that I started to sit in the seat that was marked golfer, but just before I sat down it was quickly removed.

Q. How important is Tiger's playing well for TV?
COMMISSIONER FINCHEM: It's probably, I mean, we're going to negotiate our television agreements this year. I don't know what real impact in the final analysis that has. You go out and do a contract for six years, a lot of those years you have to do with what the ratings are a year from now.
But I think having him return to his competitive level that he enjoyed for 14, 15 years has a positive effect on the sport. I think that positively affects everything we do, because he creates a lot of attention. So it's certainly a positive. There is no way I could estimate what the impact is.

Q. On that topic, anecdotal stuff like ratings declines or the Sports Business Journal survey that came out today with golf having a big decline, does that make you want to rethink how you present the product of the TOUR, whether it's formats or on television?
COMMISSIONER FINCHEM: Ratings are a unique animal. As I've said many times, if you're a 30-minute program sponsored solely by scattered sales and the ad market, or a 60-minute program, you live and die on ratings. We have more hours on air probably than any other sport.
We're on at a minimum three hours on Saturday and Sunday on network television, not to mention the cable lead-ins sometimes four hours or four or five hours on Thursday and Friday. So we have a lot of hours.
Our value comes from two things, the cumulative, the sides of our cumulative audience. 141 million Americans watched some of us last year. 110 million watched a fair amount. The other thing is the quality of our audience, because if you are doing certain things as a business, we are the best place to reach the customer that you want to reach. That's why you see us virtually -- we have a couple of holes right now for a brief period. But virtually 100% sponsored during the worst recession since the depression. There is a reason for that.
These companies make decisions based on careful metrics and study. So the value proposition is very strong, and it's blended with the business-to-business side of our business and other factors. So that's why we've continued to grow right through and have grown right through the down turn.
Now, having said that, if we had better ratings, we can do better. Because our scatter value on television would go up, and that's why we like to have better ratings, because it is a value proposition.
But we don't depend on it. We don't have to -- we can still eat lunch without it. But ratings also -- we'll see what happens this year.
Ratings are affected by a lot of different things. In 2010 they were primarily affected by three things. In the first part of the year, the Olympics had an all-time record year. Three weekends we were head-to-head with the Olympics. Tiger out for a big chunk of the first part of the year, and then not playing at his normal level had an effect on our ratings.
Late in the year, the NFL record ratings impacted us, so it's kind of a perfect score. We'll see how we perform this year. We're up a little bit early in the year, but it's way early. We'll see. However that goes, our basic value proposition is going to be solid for the future.

Q. The pairings such as Tiger, Rocco, Anthony pairing, are we going to see those more often, and those kind of story lines be pushed more to help the television product and provide story lines on Thursday and Friday?
COMMISSIONER FINCHEM: Well, I think you will see it more often. I don't think you'll see more of it in any particular week, but we are going to do it a fair amount during the course of the year. It does help our television product, we think. We also think it creates a little bit more interest.
Certainly major championships that don't follow us as it relates to pairings have utilized pairings effectively in recent years to create story lines to help break into a few more column inches in the sports section, which is important in today's world, to compete and to get more attention.
So, yeah, we like it. We'll test it out here the first few weeks and see what happens. But most likely we'll continue during the course of the year.

Q. There's been a lot of action in the last couple of weeks in the discussion front on scorecards and signings and disqualifications, and TV viewers affecting outcomes and those types of things. Does something need to be changed as far as you guys standing on how this is administrated? Do you need to have a rules official watching the broadcast, open scorecards, all types of things being discussed?
COMMISSIONER FINCHEM: Well, we are on record from a few years ago with the USGA questioning the rule as it is written as it relates to the penalty. Because we questioned and asked several years ago for a review of the rule because we felt that perhaps the penalty was out of sync with the infraction in some of these situations. So that continues to trouble us.
Based on the two situations in recent weeks, we are re-articulating our concern to the USGA. And I've spoken at length to the European Tour a couple of times in the last ten days, and they also are joining with us in questioning this rule.
Really, when I say question it, asking for a full and thorough review of the rule. Asking ourselves is there a better way to do this from a rules standpoint, especially in light of today's technology.
I think the question of somebody in a booth is kind of a sideline question. Which is if you have the rule, and it is an onerous penalty, should you try to protect the player by getting that information somehow in advance? And that's got its own set of problems and issues, but that should be part of the discussion as well as we look at it.
But I'm meeting with USGA Executive Committee late next week. I hope to have a conversation with them at that point in time, and I would hope that we could have a global conversation about the rule and certainly the penalty that is attached to it, because it obviously troubles a lot of people in terms of how it shakes out from time to time.

Q. When you say the rule, what specifically, disqualifying after the fact for incorrect scorecard?
COMMISSIONER FINCHEM: Primarily. I think the suggestion has been made in the past that perhaps it would be adequate to have an additional two-shot penalty to a player who had no knowledge that he violated a rule, and the tournament was over or the round was over, the scorecard was signed, and he is disqualified.
But there are other variations. I just think that there's a lot of discomfort with this whole situation and questions raised. I don't want to assume what our position would be on any piece of it. All I'm saying at this point is we ought to have an intelligent, thorough discussion of what we have today and what options might be available to us.

Q. How do you think we got to the point where the punishment doesn't fit the crime in this game?
COMMISSIONER FINCHEM: Well, whether a punishment fits a crime, of course, is inevitably a subjective analysis. So everybody would have a view on that. The rules as they're written create a focus on players on knowing the rules and/or checking with officials when they don't know the rules, which is why we have officials out on the golf course.
Just certain situations arise where we take the example of Camilo Villegas, the ball's rolling back towards you, you don't have time to call for an official. So that is a subjective analysis.
I think it's enough to say that all we're saying is why don't we get the people who work on the rules, write the rules, the people on our team who execute the rules, and review that rule and the attendant penalty and ask ourselves some questions about it.

Q. What do you see to do better this year? Separate from if Tiger plays better and more people watch, if you look at the business last year, and the business going forward, what things didn't go so well last year that you'd really like to make some concrete progress on this?
COMMISSIONER FINCHEM: Our business did well last year. We're very pleased with the amount of business that was organized for the future. The way our tournaments came back in terms of their sales, still in a down economy so we're pleased about our business. We grew in each of the last three years in terms of what we're supposed to produce.
So we feel good. Our objective going in -- and I had no idea it would take what, going on three, three and a half years now -- was to come out of the downturn stronger than we are going in from a business standpoint. I believe that's exactly what will happen.
We'll have a better group of sponsors. We'll have longer term contractual commitments. We'll be set for the future.
We're poised to take advantage of -- obviously, we could do better financially if there is an up turn, especially in our supporting businesses, where we have 25 clubs around the country. That part of the industry has been really depressed.
So when the economy comes back, we're poised to take advantage of it, but we're very pleased with particularly 2010. And in addition to everything else, television sales came back strongly in 2010.

Q. To go back to the rules conversation. Rocco was just in here. Is there no conversation at all of bifurcating the rules that the TOUR would create its own rule to address this particular issue?
COMMISSIONER FINCHEM: Well, it's premature to say yes or no to that. We have the option to write our own rules and it's happened a you couple of times historically. We maintain that position under our regulations. It's been in the regulations for 40 years.
However, you know, we think it's important for the sport, if at all possible. And if, at all possible, to maintain a consistency of the rules throughout. Everybody pretty much in golf agrees with that.
Now, there may be reason for deviation from time to time and we've had a couple of those, but right now we're not even thinking about that. We're thinking about one thing, and that is can we have a comprehensive discussion about the rule, and about its implications and about options. And that's what we're asking for.

Q. What are your realistic expectations for the next TV contract?
COMMISSIONER FINCHEM: I wouldn't tell you if I knew. And I might know, but I won't tell you that.

Q. Can you talk to the possible relationship between Bill Clinton and the Bob Hope Classic?
COMMISSIONER FINCHEM: Well, we put out a statement on the weekend. I think it's self explanatory. We are in discussions and have been for some time with the Clinton Foundation about some different options, but a broad relationship, one that might include Palm Springs as a hub for that activity.
If that gets completed, we'll have more to say at that time. To say anything else at this time would be speculative, and it wouldn't relate to one of the options that are on the table and we're talking about. It's not really a negotiation. It's looking at how a partnership could be formed and what form it would take.
But we would welcome the opportunity for that to work. And if it works, we'll articulate how it's going to work and what it is here probably this spring.

Q. What is your reaction and level of concern about Westwood and now today Rory McIlroy saying they will not play in THE PLAYERS?
COMMISSIONER FINCHEM: Well, any time a top player or any player who is eligible for THE PLAYERS doesn't play, I'm disappointed. I'd like to see everybody play. But that doesn't always happen, and things happen, and players get injured.
In this case, players make decisions based on their schedule that they're focused on for whatever set of reasons. I really never try to second guess a players decision as it relates to his schedule. I'm just disappointed that they're not playing. Particularly Lee, because he played so beautifully last year as he was marching toward finally achieving the number one ranking.
But I'm not troubled by it. I'm disappointed that they're not playing, but I'm not troubled by it. I feel we'll have an excellent field again. It's a premier tournament on a great golf course with a great pedigree of champions, and the highest purse of the year. We'll have a fantastic tournament.
My only message to those guys is you're always welcome, and we'd love to have you back.

Q. You said you were optimistic about designated events this year. Can you give some examples of players changing their schedule or other anecdotes that make you optimistic about it?
COMMISSIONER FINCHEM: I don't know. We've already had a number of players who haven't played in tournaments in a number of years play, which, we're asking players to preferably add an event to your schedule, and or play some place you haven't played in a good period of time.
I know for a fact having either myself or my team has talked to almost every player now, and we will get virtually 100% of the players doing that. Let's just see how the year unfolds. But I'm pleased with the reaction.

Q. Was Sony there an example so far this year?
COMMISSIONER FINCHEM: There were two or three players at Sony that hadn't played there in five or six years. Not sure about Hope as much. Though Stewart Cink played there for the first time in a few years.
But just top to bottom, I know what players are talking about the top 125 players, and I think it's going to pan out very, very positively.

Q. What would be the down side of taking and making a Top 10 player exempt from any membership criteria? Basically let them play whenever they want on the TOUR?
COMMISSIONER FINCHEM: Well, there's a lot to the answer to that question in terms of what rules we have that would "limit a player". When we made the little change we made for THE PLAYERS, it wasn't about players as much as it was about the tournament. We didn't want THE PLAYERS Championship to be in that mix.
The rules that we have as it relates to how many have to play to be a voting member, 15. How many can you play if you're not a member? How many sponsor exemptions can you accept as a non-member? And all those rules are something that we look at every year. Isn't any right or wrong to it.
As I've said, I think right now with European players playing so well this past year. Candidly I'm disappointed about players not playing here and this and that because it helps our field.
But, on the other hand, I feel like we have the right mix of international players on the TOUR. I see no need for us to have more international players. I also feel strongly that the European Tour needs to be a strong TOUR. It's a very good thing for golf globally.
They have struggled more than we have with this downturn. They've had to morph their schedule into the Middle East and now Asia to find markets to support their Tour. I applaud that. But a lot of these players, if they didn't play -- they need to play more to help the European Tour.
I'm not going to argue whether the European Tour player whether he's doing the wrong thing, if George O'Grady feels because it's so important for that player to play over there. Candidly, it's probably more important on the European Tour that some of those players play over there than it is for us that they play here.
So there isn't any bad feeling. We're not going to try to juggle the rules to try to make this right now as a result of this. It's a long-term thing. We'll analyze it from a long-term standpoint.

Q. I wanted to follow up on the request for a review of the scorecard rule. Could you put a timeframe on it when you'd like to see the review take place and when you'd like to get some conclusions from it?
COMMISSIONER FINCHEM: Well, my staff, our staff has already interfaced with the USGA. What's come back to me is they're very open in having a discussion now. I think there are a number of things involved here that perhaps make it more of a situation to talk about.
Certainly in the case of Harrington, I think you could argue that -- somebody told me the other day they watched a replay of the Harrington incident, and in analog television you absolutely couldn't see the ball move. It takes HD television to tell you that.
Now if you can't see the ball move in that kind of setting, are you really going to let that go to disqualification? I mean, there needs to be some common sense here maybe in terms of the way these things are.
So I don't know whether the rule will be changed. I don't know what timeframe the final decision will be made by the USGA. I feel comfortable given the quality of the people at the USGA today that if we can just get into a room and talk seriously about the options, we ought to be able to give this a very careful review.

Q. Why did you issue a statement on the Hope and Clinton possibility? It seemed like an unusual negotiating?
COMMISSIONER FINCHEM: Because, candidly Joe Ogilvie, who is one of our TOUR members, called for the idea of President Clinton hosting the event. A number of people who, for various reasons, primarily business oriented, we were having discussions which were confidential.
It was my conclusion that with, I think it was Golf Digest putting online that story, that it was likely going to leak that we were having these discussions. And if it was going to leak, I'd rather put it in the context that it was appropriate so that people understood, yes, we're having discussions. We'll see where they lead and avoid all of the speculation that might surround a leak, which would be unnecessary and might end up being counter-productive to us getting something done. It's very simple.

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