by Rick Horrow and Karla Swatek
PGA Tour Business in the New Year...or Second Quarter?
Even though it’s populated with outsize personalities and purses – think World Number One Tiger Woods and the recent revelation that the golfers’ career earnings from tournament wins and endorsement deals now top $1.3 billion – the PGA Tour at the onset of 2014 finds itself in a bit of an identity crisis.
For starters, there’s the issue of the calendar itself. The Tour is in its first year of a new format that herds the fall "silly season" tournaments into a new role as the initial events of the upcoming full season. While the schedule change was meant to add relevance to those events and attract a stronger field (as early FedEx Cup points are now there for the taking), as 2013 tournament winners gathered last week at the Hyundai Tournament of Champions at Kapalua, it was clear that Tour pros still abide by the Gregorian calendar.
"I haven’t played much of the wraparound schedule, so looking forward to playing here in the next week and kind of getting my season started," golfer Jason Dufner told Golf Channel, a sentiment echoed by his Tour brethren throughout the week.
Then there’s the issue of the PGA Tour’s true charitable footprint. The Tour has long been considered one of the most benevolent organizations in professional sports, giving millions of dollars annually to worthy causes in the cities where its tournaments are held. But in December, an ESPN "Outside the Lines" expose took the Tour to task for not giving enough money to charity as it should, saying even though the organization was celebrating reaching the $2 billion mark in total charitable giving, the percentage of contributions when weighed against total revenue doesn’t add up. The ESPN report revealed that on average, 16% of the PGA Tour’s spending is allocated to charitable grants and/or services, which is "far below" the recommended 65%.
Moreover, like all pro sports entities, the PGA tours tax free status is now under even more scrutiny thanks to legislation introduced late last year by Oklahoma Senator Tom Coburn. PGA Tour taxpayer subsidies reaching $8-9 million per year, Coburn noted, "are ludicrous."
For the 2014 season -- regardless of when you perceive it started -- the PGA Tour is also going through more than its normal share of sponsor musical chairs. American Express, an official PGA of America and PGA Championship patron since 2007, chose not to renew its deal with the association after it expired in 2013. "Patron" is the PGA’s highest sponsorship designation, with deals at that level estimated to cost in the mid seven figures and include a commitment to incremental media spending with the PGA’s media partners. (Omega and Mercedes-Benz are the other two PGA patron sponsors.)
Luckily for the PGA, Samsung was there to step right into AmEx’s vacated golf shoes. The newly announced three-year Samsung patron sponsorship deal, according to the association, also includes the development of "multi-screen, second-screen, and other interactive experiences for fans," with the initial focus on expanding PGA Championship and Ryder Cup experiences for fans watching from their couches. Samsung’s mobile products line will also be used as the official scoring system of the PGA Championship and 2016 Ryder Cup at Hazeltine National Golf Club in Minnesota.
The WGC-Accenture Match Play Championship, finally, played at La Costa and more recently at Arizona’s Ritz Carlton Golf Club at Dove Mountain, will be without a title sponsor after next month’s event. Accenture is opting out of the estimated $9-11 million annual commitment; the summertime AT&T National and FedEx Cup BMW Championship also have title sponsorship deals that expire this year.
One sponsorship commitment that carries no ambiguity whatsoever is the heartfelt relationship that golf legend Gary Player and Humana, Inc. have forged.
Earlier this week, Player and Humana Inc. announced the continuation of their three-year partnership as the Black Knight will once again co-host next week’s Humana Challenge in La Quinta, CA. Since the partnership’s inception last year, Player has served as a national spokesman for the health care company, promoting lifelong well-being and healthy living through proper diet and exercise. Player has also joined forces with Humana to help address the increasing challenges of childhood obesity.
Sponsored by Humana and the William J. Clinton Foundation, the Humana Challenge is now an annual PGA Tour event featuring 156 pros. To date, the event has successfully raised more than $2.1 million for charity and was named “Sports Event of the Year” by Sports Business Journal.
At the age of 78, Player is recognized as an ambassador to fitness and serves as a role model for many of today’s up-and-coming PGA Tour stars. The 2014 Humana Challenge takes place fresh off a milestone year for the Hall of Famer, which included his 60th anniversary as a professional and the 30th anniversary of his philanthropic endeavor, The Player Foundation.
In the constantly shifting world of PGA Tour business, with Player, it is comforting to know that the more things change, the more they stay the same.