From former USGA Executive Director Frank Hannigan. Past letters of his can be viewed here.

Geoff,

I once sat in a meeting room full of corporate executives who advertise in Fortune magazine. The speakers were Warren Buffett and Bill Gates. After bragging that Gates personally taught him how to get online, Buffett fielded a question about his annual report. Buffett said he regarded his annual report as vital, that he spent much time on it, that it contained nothing he did not regard as true. All one had to do to know what was happening at Berkshire Hathaway was read its annual report.

The recently published annual report of the United States Golf Association is the converse of the Buffet attitude. It is a monument of obfuscation and self praise.

The governing body’s report contains two principle sections. There is a 3-and-a-half-page hunk of prose signed by current president James Vemon. Then comes the financial statement for 2008. Let’s consider the money part first.

There was revenue of $155,814,000. Expenses were $155,747,000. So the “profit” was a pittance of $67,000. In 1997 USGA revenue was only $136 million. Financially the USGA is like a hamster on a wheel. No matter how hard it runs it can’t catch up to itself.

If the USGA wants to have more money the answer is simple – spend less. Concerned, Vemon says they are now reviewing the expenditure of every nickel and dime. Expense reports are to be examined with a new fervor.

That’s not going to get it. Just like the federal government the USGA is eventually going to have to deal with entitlements. Examples:

Expenses for championships and broadcasting are line-itemed at $80 million. There is no breakdown of what was spent when or where although they maintain distinctions internally in finite detail. Most of that money has to be ascribed to “US Open” given it doesn’t cost much to run the Senior Amateur Championship. A person familiar with tournament expenses, anonymous because of ongoing dealings the USGA, says “US Open expenses are completely out of control.”

I wonder where they hide the cost of a private jet to ferry members of the Executive Committee to sites of USGA activities where they are not needed. Perhaps they have dumped the jet in emulation of Citi Group and other corporations – out of embarrassment. You can’t know because it’s a verboten subject.

Denied all detail as to championship expenses, I nevertheless conclude they could be cut by $5 million or more and nobody in the audience would know the difference.

The USGA gave away $3 million in grants via its own Foundation and another $3 million as a gift to The First Tee effort. Vernon points out in his text that the USGA has been the biggest giver to The First Tee. He omits mention of the PGA Tour whose creature is The First Tee. The omission tells us Far Hills does not love Ponte Veda. Probably vice versa too.

Since these gifts have accomplished nothing in terms of “growing the game” (golf is either flat or in decline) I say get rid of them. But if the USGA can afford to and wants to give away money, send it to where it can do some good – to Darfur, the Mississippi literacy program, or the Western Golf Association for caddie scholarships.

I shudder on reading that the combined expenses of its “communications” and “digital media” operations were more than $10 million. The USGA seems to think that if you just throw enough stuff online the result will be that everyone will love you. What difference can it make if the USGA is held in high or low esteem so long as the Rules Of Golf are accepted by golfers everywhere? Achieving uniformity in the rules, in accord with its partner the R&A, is the primary triumph in USGA history. And it happened before anyone owned a computer.

Vernon writes they spent $20 million to redo the Museum and Library. As a former curator of the USGA Museum (I got a D because I misplaced items), I remain a fan of the museum but not $20 millions worth. When the museum reopened in June, admission was charged for the first time. It now costs $7.50 if you want to see The Moon Club.

You will search in vain for museum attendance figures. That’s because even golfers can look at the moon itself – for free. Apparently attendance is limited to elderly people on busses who thought they signed up to catch a matinee at the Paper Mill Playhouse in Milburn. They are startled when the bus passes Milburn and keeps going west on I-78.

The Vernon message is replete with odd usages. He seems to think the USGA began about five years ago when contracts were signed with four corporate “partners” and that NBC is an ally. That alliance consists of NBC giving the USGA about $30 million as a rights fee along with the understanding NBC will never criticize the USGA on air.

The US Open is described as “the most rigorous examination in golf.” Translation: “We want high scores and we get them.”

He enthuses about a 14-point course philosophy. Amazing, but Jones, Hogan and Nicklaus each managed to win four US Opens absent 14-point philosophies.

He enthuses over the introduction of graduated rough. US Opens had graduated rough when Bob Jones was playing. They have introduced a third cut of rough. But, although they surely have numbers they don’t say what effect, if any, the third cut has on the competition.

Vernon cites using different yardages for the same hole among recent inspirations. Excuse me, but alternative tees were used in the 1967 Open at Baltusrol. In all, setting up a course is one third art, one third agronomy and one third guesswork. Fourteen points was what President Wilson tried to pull off after World War I.

It wouldn’t be a USGA annual report without claims of being newly “relevant,” which is what happened when the Open was played on Torrey Pines (where they gouged the City of San Diego.) Each of the four corporate partners were “relevant” to USGA priorities. The automobile sponsor contributed 13,000 “car nights” . When you were a kid, did you beg dad for two “car nights” this week?

The ailing economy sharply reduced the value of the USGA investments. So what? That happened to everyone. The amount of loss should be specified in the president’s message. Instead, you have to hunt for the numbers in the fine print of the financial statement. I doubt it would be there at all but for a legal requirement. Transparency is not a USGA virtue.

We learn that both junior championships this year will be played on courses owned by Donald Trump. Now that does exemplify a new and different USGA. I find it hard to picture historic USGA figures like Richard Tufts, Bill Campbell, Sandy Tatum and Joe Dey hanging around with Donald Trump.

Staff resignations, early retirements and plain old firings in the last two years are not mentioned. It could be argued that staff turnover doesn’t matter so long as the USGA runs splendid championships and nurtures the Rules of Golf. The workers on Henry Ford’s assembly lines were not wild about their jobs but kept on churning out Model Ts.

On the other hand, the USGA is an institution of human relations. It is not Google. The USGA is having people troubles both at home and away.

Only recently there were four exceptional US Open sites in the New York metropolitan area. Now there is one – Bethpage, where this year’s Open will occur. The Shinnecock Hills Open of 2004 was a debacle. It ended with the two parties spitting and hissing at each other. Baltusrol has switched to become a PGA Championship host. The members of Winged Foot last year voted overwhelmingly not to put up with another Open.

Those losses, Mr. Vernon, are relevant.

Frank Hannigan

Saugerties, New York

Former USGA Executive Director Frank Hannigan has penned another of his letters after reading Tuesday's golf.com story on the financial state of the USGA.

Dear Geoff,

Michael Bamberger's piece commiserating with the USGA because the street value of its investments dropped from $300 million to $200 million during 2008 was misleading in the extreme.

What possible difference can it make whether the USGA has $300 or $200 million stashed away so long as verges on the impossible for them not to take in more money than they spend in any given year? So long as the US Open exists the USGA can't avoid being an extremely profitable 501C3 entity.

Only once since the USGA was founded in 1895 has there been a year when the USGA spent more than it took, that happening a few years ago under the hands-on management of the most misguided president in USGA history - one Walter Driver, who moaned about money as he was leasing a corporate jet to shuttle members of the USGA executive committee to places they weren't needed.

If the USGA is cutting back on its contributions to other golf entities, the reason is likely a belated understanding that they have simply blown a lot of money. During the period of the USGA messages to "really, really love golf" and "for the good of the game," precisely nothing has happened. And nothing began happening a long time before the economy went in the tank last year.

As a recreational activity, distinct from playing for unGodly sums of prize money, golf teeters on the edge of obscurity. The game has been no better than flat for at least a decade in terms of rounds played or golf balls sold. Economic downfall or not, more courses are shutting down than closing.

Sure the USGA has been the primary giver to the PGA Tour's First Tee program. So what then has the First Tee accomplished other than the spin that the PGA Tour is a generous operation. At random, of course, there have to be First Tee centers that do good things, like the one nourished in San Francisco by former USGA president Sandy Tatum whose virtues and skills are such that one wishes he had devoted himself to things that matter, such as running the CIA.

Giving a lot of money to the First Tee has also kept the heat off the USGA about US Open prize money, a pittance compared to the money earned by athletes in team sports, about 15% of the gross compared to more than 50% in the National Football League.

What might the USGA have done? For openers it should have been shrieking that golf was being wrecked by the wicked and unnecessary growth of maintaining courses, which have shot up faster than the cost of health care or college tuition. The promotional ads on USGA telecasts, of tremendous value, should have been devoted to ONLY the matter of golf course maintenance. Those two morons we see every year saying they will renew playing when it stops raining should have been dumped into a septic tank.

Meanwhile the USGA spends $16 million to overhaul a museum nobody will ever attend. And it starts charging admission on the grounds that visitors will reject free admission because that leads to "an assumption that there’s nothing of value there.”  That's like saying the Yankees would have serious attendance problems if they let everyone in free.

When I first stumbled on the USGA headquarters in 1972 it never occurred to me that people would wander into the Museum in numbers. Far Hills, New Jersey was and remains remote. And there were not a lot of folks in the neighborhood, what with Far Hills then having the most restrictive zoning ordinance in the United States - 10 acres per new house.

As the then Assistant Director of the USGA I had no stated authority but I could sure sell those executive committees. I put on a dog and pony show with photos of that building, with what many felt was the single best rendering of a hanging staircase in America, to die for.

It's hard for me to even imagine, but it is so, that the USGA, in that setting with 62 acres to die for, is regarded as an unhappy place in which to earn a living. Many people of quality, who thought they were on a mission working for the USGA, realized dumb things were happening (see above). Some quit; others were fired.

Those left should blame me for having to be miserable in Far Hills. I wanted it because the main building was the work of a great American architect and it was remote enough so that some staff members might be able afford to play golf. Above all, though, was the existence of decent public schools for our kids less than 20 minutes away.

Former USGA Executive Director Frank Hannigan sends another of his thoughtful letters, this time he's reacting to the recent USGA staff firings spearheaded by Walter Driver and rubber-stamped by the Executive Committee. Hannigan tells us what they mean for the organization and the game.

Dear Geoff:

I can’t convince you, because of your youth, there was a time when the USGA was generally regarded as the most effective, efficient and logical body of sports in this country. When I was chief operating officer of the USGA and feeling sour about something we’d done I would turn my mind to the US Tennis Association and immediately perk up.

Alas, I agree with your low estimation of today’s USGA which is no better than the USTA, the NCAA, the AAU, the US Olympic Committee or, I suppose, Vince McMahon’s World Wrestling Federation.

The barrage of media criticism of president Walter Driver is both unprecedented and deserved. It’s also simplistic. The USGA began to behave strangely more than 10 years ago. The greatest failure was to pull back from what would have been a stupendous conflict had the organization attempted to do the right thing about distance.

Knowing full well that they should have risked the farm with anti-distance legislation, they instead have announced a ban on U grooves starting in 2009, saying that the game has been totally changed by grooves so that there is no longer any correlation between accuracy on the Tour and success. This they say in a year when Fred Funk, Scotty Verplank, Paul Goydos and Zach Johnson are gobbling up tour titles, not to mention the Masters.  All bunters.

Internally, the USGA is grim.  President Driver has ousted two senior staff members.  The first was Tim Moraghan, a specialized agronomist who worked with the superintendents at championship courses. The second, not yet formally announced, is Marty Parkes, the USGA’s long time director of communications.  Parkes was #4 on what has become a perhaps too large staff of more than 300.

The firings, of course, are termed “resignations.” Both of those leaving accepted bonus packages including a provision they would not speak ill of the USGA or talk about their separations.  I find that a very sleazy way for a public entity to act. The USGA insists on its privacy, which it legally holds, but it has no problem avoiding federal taxes. It even accepts 501c3 status as a “charity” which means that volunteers like Driver can deduct their USGA expenses.

Moraghan, I would say, has been fired retroactively for whatever part he played in the course debacle of the 2004 US Open at Shinnecock Hills.  Driver was then chairman of the championship committee and had to endure humiliation.

Marty Parkes is gone, as I and others see it, because he could not prohibit negative print media and blog stories (like this) about Driver. There was the notorious Golf World magazine cover story headed “Can the USGA Survive Walter Driver?” But then Washington Post golf writer Len Shapiro labeled Driver “the most disliked USGA president ever.” Driver’s partners at Goldman Sachs do not know what Golf World is, but they are certainly cognizant of the Washington Post.

You would think Driver, having a major post in what is likely the world’s most successful financial concern, would know a bit about money. Instead, he has a strange idea  about the USGA being endangered financially.  He points out that the USGA “lost” $6 million in operations in 2006 and has budgeted a $5 million loss for 2007.  The 2006 “loss” was the first in the history of the USGA, which commenced in 1895.  It was also the first year of Driver’s two as president.

Meanwhile, the USGA investments have a street value close to $300 million. Even a financial ignoramus like myself could churn $15 million or more out of that without going near the principle. The “loss” he’s talking about does not take into account the growth in value of the investments.

He says the USGA, were it a business, would be in big time trouble.  Excuse me, but the USGA is NOT a business.  It is a non-profit service organization. The American Cancer Society would be in trouble as a “business.”

He points to the fragility of the USGA’s television income, which is hidden but likely pushing $25 million a year. The contract with NBC runs through 2014.  President Driver says who can possibly tell what will happen with TV money after 2014.   Nobody, can. But you know what?   If it’s so scary the USGA could easily get an extension of its NBC contract right now, especially after the success of the Open at Oakmont.

Marty Parkes is after my USGA time, which ended in 1989. I have had no professional dealings with him, but we were cordial when I ran into him. As is my want, I would tease him by saying one expected more of a graduate of the London School of Economics than being a USGA publicist.  I read him as being an exceptional manager of projects and people but uncomfortable cozying up to golf media giants.

The USGA set-up is truly strange. It gives complete power and authority to its volunteer executive committee of 15. The president is labeled in the by-laws as chief executive officer but his powers are limited to presiding over meetings and appointing the members of the many sub committees. He can’t even hire, that power being given to the executive committee as a whole. (The by-laws say the committee can hire “clerks.”).

Parkes may also have been fired because when Driver and his colleagues slashed staff benefits in January, Parkes sent an email to Driver asking for or demanding an explanation.  This caused Driver to fly to New Jersey from Atlanta and address a surly staff.

This must be said for Driver.  He did not use the USGA’s leased jet when he flew to Newark for this meeting.  (He correctly notes that he inherited the jet program from his predecessor Fred Ridley-- which is not the same as saying he could cancel it in these financially perilous days.) You will search in vain in the USGA financial statement for a line item about the jet or for that matter the cost of entertaining members of the executive committee and their wives at championships, where they are not needed.  For the staff, which can truly run golf tournaments, these people are heavy maintenance.

Since Driver does not have the kind of power a corporate CEO has it follows he must have the approval and backing of the executive committee. What are they thinking?  I think they are thinking about getting re-appointed.

How about executive director David Fay, who followed me in that role? I have no idea where he is at. It’s easy for me to say 16 years after the fact, but if the executive committee ordered me to fire someone from what I regarded as MY staff, I would have reacted by saying you can fire anybody you want but that means I go too.

For all I know, David may have fought heroically to save Marty Parkes, and was central in a negotiating process (Marty wisely had got himself a lawyer) whereby Marty got out with an excellent deal.

The USGA is now a grim place.   Nobody thinks that Driver & Co. are finished firing.

I wonder how much it matters save for the exercise of egos.  The USGA is a service entity with a mix of components. It does not follow that terrible leadership causes these to fall apart.  Example:  two years ago my up-state club, 9 holes, was visited by a USGA agronomist. He too was after my time.  I purposely stayed away on the day of his visit but the club people sent me a copy of his written report. It wasn’t just good.  It was superb. The recommendations were followed and resulted in much better turfgrass.

I’m sure the same can be said of other USGA departments, e.g., handicapping and perhaps management of the Rules of Golf.  (The USGA, if known at all to casual golfers, is understood to be the US Open and Rules of Golf.  Many people think I worked 28 years for the “PGA”.)

There is no provision for impeachment. By tradition, Driver will be gone in six months.  I have been saying for years that the USGA is badly in need of an infusion of democratic procedure.  There needs to be a contested election. It doesn’t happen because the average golfer cares only his futile attempt to make a good swing. 

The decline of the USGA did not begin with Walter Driver.  I would label it as beginning in 1995 when one of Driver’s predecessors hired Kenny Rogers for $30,000 to sing at a USGA birthday party.

Kenny Rogers is as appropriate for the USGA as Jenna Jameson would be at a conclave of the College of Cardinals.

Frank Hannigan
Saugerties, New York 

 For some past letters from Hannigan, check here.

Former USGA Executive Director Frank Hannigan shares his thoughts on the ramifications and politics behind a possible U-groove rule change:

The recent USGA announcement proposing to get rid of U-shaped grooves contained every self-congratulatory cliché except “Mission Accomplished.”
 
Dick Rugge, USGA senior technical director, said “These proposals represent the comprehensive, deliberate and thoughtful nature of the USGA’s equipment research.”       

It’s Rugge’s own work.
 
Whatever happened to modesty?
 
The reality is that the USGA, unable or unwilling to do anything about the surge in distance that has polluted the game, is trying to pretend it is giving birth to an elephant. In fact, it’s not even a mouse.
 
Rugge correctly observes that "the skill of driving the ball accurately has become much less important in achieving success on the Tour than it used to be.”  From there comes his quantum leap in logic that by reverting to V grooves the rich, wild and famous will get so much less spin and loft from “the rough” that they might as well leave the Tour and look for jobs.
 
The balls used on the Tour, sure enough, are predominantly urethane covered, softer than the rocks used by the rest of us, and therefore spin more. Our balls, with surlyn covers, will not be affected, so the USGA says it has discovered a win-win situation.
 
Back in 1986 the USGA, with Frank Thomas as its technical director, published a massive “Groove Study”.  It said that soft-covered balls, with balata then in use, spun some more out of short rough  when struck with U-grooved clubs, but not enough to make any difference. The key word was “insignificant.”

Rugge & Co.  say “posh” to the original groove story. The difference they say matters a hell of a lot.

Alas, they provide no specifics.  Like so:
 
1.  The average score on the PGA Tour is stuck on 71.2.  If  U-grooves matter so much the average score then must surely jump come 2009, assuming the PGA Tour accepts the proposal.  I hazard the prediction that unless the Tour modifies the way it sets up courses the average score will stay the same.
 
2.  The USGA posture seems to be that the wrong people have been winning.    One wonders who they might be.  Surely not Tiger Woods,  who shares with the USGA a deep love for business deals with American Express.
 
3.  What is “rough” and what strains of grass are we talking about?  Is it what the announcers at The Masters are required to call “the second cut.”  It surely can’t be the USGA’s own famous “primary rough” because the grooves don’t get to the ball out of 5 inches of grass.
 
4.  U-grooves became permissible under the Rules of Golf in 1984.  So how come the tilt toward power on the Tour did not cause brows to furrow until the late 1990s?

5.  The USGA has a vast archive of television tapes.  How about pulling up about 6 shots that show the perfidious results of U-grooves and offering them as a display?

Almost nobody disagrees with the USGA observation that distance matters too much now.  That’s because the USGA blew it to the extent that the average distance per measured drive on the Tour is 289 yards, nearly 30 yards up since the early 1990s.         
 
The Tour has scrambled to stabilize scoring by making courses much harder today.  But  the power hitters benefit disproportionately.  Imagine it’s 1990 and a big hitter is 180 yards from the hole while his fellow competitor, an average hitter, is 210 yards from the hole.  Fast forward to 2007.  The  big hitter is now 150 yards away and the average hitter 180 yards distant.   I contend the difference between the two in what they score on the hole has widened in favor of the big hitter.
 
If the USGA is serious about restoring the virtues of accuracy all it has to do is roll back the fail point in its vital Overall Distance Standard test. Banning U-grooves is merely a way of pretending to do something.  The proposals for change are likely to sail through because they don’t bother anybody.

The USGA can declare victory, or at least until the end of the 2009 season when it becomes understood nothing has happened.

Frank Hannigan
Saugerties, New York
March 6, 2007

To read other Hannigan letters, here was his previous piece on the grooves story, his commentary on the recent USGA-AmEx deal, his thoughts on the USGA's private jet package and his take on USGA President Walter Driver's views on distance.