The Day Corporate Cool Died?
I leave for a few hours and we go from a shoddy TMZ report with exaggerations and blatantly incorrect information about the Northern Trust Open, to prominent members of Congress using it to call for everything but a public execution.
There are a number of ways to look at the Northern Trust situation. Obviously it's hard to sympathize with a group that received TARP money going on to do over-the-top entertaining when other recent examples of such excess have turned prominent companies into dirty words (A.I.G.).
Northern Trust signed on as L.A. Open sponsor to build it's brand in the west. Well, today they went national today.
On the other hand, Northern Trust is a victim here. Having been forced to take TARP money they apparently forgot there were new rules of doing business attached to that money no matter how unnecessary they believed it to be. If CEO Rick Waddell and his board had any cojones, he'd hold a press conference tomorrow with a big $1.6 billion winner's check in his hand and an offer to give it all back to the government.
My initial reaction to these events has more to do with the PGA Tour and the future of the sport. You may recall that I spared you more detailed thoughts about the direction the L.A. Open has taken with Northern Trust and PGA Tour's Championship Management whispering in their ears to push out the L.A. Junior Chamber of Commerce, corporatize everything in sight and in general, make the event more like events the PGA Tour operates: bland, soulless and devoid of local character but "elegant" to the discerning corporate clients visiting from Chicago who can pass a blindfold taste test between Grey Goose and Smirnoff.
While some of you might giggle at my pleas for an 18th green manual scoreboard, it's little things like this that lie at the heart of the utterly disastrous direction the PGA Tour has taken where the corporate world takes total priority over the experience of the everyday fan.;)
Do we really need an on course concierge? (click image to enlarge)
As Barack Obama spoke Tuesday night and made the boldest declaration yet to end corporate greed, malfeasance and excess, I couldn't help but think that the PGA Tour had better be holding emergency meetings through the night figuring out how to wean themselves from a fatal attraction to this peculiar world of arrogant excess that mercifully died on February 24, 2009.
Obama: "I intend to hold these banks fully accountable for the assistance they receive, and this time, they will have to clearly demonstrate how taxpayer dollars result in more lending for the American taxpayer. This time, CEOs won't be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet. Those days are over."
;)
Countrywide was visible at the 2009 NTO (click to enlarge)This doesn't mean golf or the days of golf tournament sponsorship are over. Nor does this unravelling of greed and corruption mean that corporations are going to be going away as hosts of golf tournaments and supporters of the game. And nor do we want them to go away.
However, the folks running the game are going to have to rethink their complete and utterly nauseating obsession with pleasing often out of touch and sometimes downright moronic hooligans who want tinted windows on their elevated luxury boxes so they can look down on the little people, who have little genuine regard for the values golf stands for, and who consistently display a disdain for anything beyond themselves.
Tuesday, February 24, 2009 at 08:22 PM 19 Comments | in 2009 Northern Trust Open, PGA Tour, State of the Game, Tim Finchem 
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Reader Comments (19)
If a business had a private jet for its executive staff, why should it stop using it simply because they accepted a government loan? Doesn't operating the jet stimulate the economy? Don't you have to buy fuel, pay a pilot...doesn't the jet manufacturer employ a middle class work force? Has congress banned corporate jets, or have they EVER suggested they do it? Their ENTIRE salary comes from taxpayer money.
Yup, there has been excess and greed in the corporate world here and abroad. I think the harm done by it is small, compared to the benefits we've all enjoyed over the last 30 years of economic success and growth.
The answer to it isn't for the government to step in and start writing rules for CEOs to live by. It's to enforce laws. Companies who were irresponsible to their stockholders, who made foolish decisions, should be punished. In court, for negligence, or whatever the appropriate charge is, and in the market, by being allowed to fail.
No way we're getting out of this without hurting. I'd just rather get it over with now, and have those responsible pay the price, rather than spreading it to all US taxpayers, and deferring it 2 years down the road, when we stimulate the inflation rate to double digits.
That is, on the inflow side, what % of inflows comes from:
Presenting sponsor
secondary sponsors
corporate boxes
Televison
The PGA Tour
general public tickets
concessions, shirts and caps
other
On the out flow side, what % of money goes to:
the Purse
Charity
renting the course
preparing the course (tents, scoreboards, cars etc)
volunteers
concessions, shirts and caps
other
If the sponsor and the Tour provide the vast majority of the cash, then they probably should get a majority of the say so.
Other than Phoenix, do the paying fans provide a meaningful % of revenues?
The hypocrisy raining down from Congress is staggering. They rail at the evil corporate entities while the same day that Obama holds his fiscal responsibility summit, they propose a spending budget for th second half of this fiscal year with a 9% increase in spending and over 8000 earmarks. A 9% INCREASE in base spending and that's on top of the giant stimulus package just passed.
Who is really out of touch here.
I would pay money for Northern Trust to do what you suggest a hand Congress back a big winners check...made out to Barney Frank.
A couple observations:
1. Typically the "gift bags" are purchased and compiled by the tournament office with little to no input from the title sponsor. Sometimes the title sponsor might send along some trinkets/product they want to have included but usually that's about it. Usually these bags go to Pro-Am participants and part of the fee for each Pro-Am spot is budgeted to purchase the gift bag. To the extent Northern Trust was invoiced directly for some Pro-Am spots you might be able to draw a a little bit of a line between them and the gift bag, but the number of Pro-Am spots the title sponsor buys directly can vary WIDELY from event to event. To suggest that Northern Trust personel went down to Tiffany and spent a bunch of bank/TARP money is just ridiculous.
2. It's likely that all the big "events" were similarly arranged by the tournament office. Most tour events have a huge Pro-Am draw party, and a huge Pro-Am awards dinner, both of which typically include top-flight ;-) entertainment options (read House of Blues and aircraft hangar). A tour event of this magnitude can literally have 100's of different sponsors that will attend these events. It is very unlikely that Northern Trust arranged any of Blues/hangar details on their own as typically this is all tournament office stuff and comes from the Pro-Am budget and/or general tournament budget. Sure, there were probably some Northern Trust customers and employees there, but probably 100+ various other sponsors as well. (the flaw in this thesis is that Northern is dominating the Pro-Am but with a long-tenured event like this one at Riveria there have to be many many legacy sponsors buying Pro-Am spots)
How did Buick and Chrylser avoid Barney's wrath?
A Wells Fargo story hit overnight that said they are "Cutting Costs at Golf Event Amid Political Pressure"....uuugh. I thought the fact that they were calling it The Wachovia this year was already a signal that '09 would be there last year anyway -- but who can blame them for bailing out now!
Finchem better fire up a Prius and get his ass up to Washington and start educating our "lawmakers" on the mechanics of how the tour really works, and who benefits. Unfortunately, for Tim, intense scrutiny of his personal compensation will probably be part of the equation.
PS...Ponte Green, I might be able to help you with that tomorrow ;-)
You're helping me make my point. The tour is now so reliant on corporations that spectator revenue has dwindled. The LA Open used to draw 35-40,000 people a day on the weekend and Friday, a traditionally huge day there for some reason.
They've neglected the fan, and when they start staying away it becomes less "cool" for corporations to be involved.
Harking back to my question above, I would guess that the people who actually walk the course are a minuscule part of a tournament funding and hence, should not be the tail that wags the dog. Phx may be different.
Frankly, walking a tournament can be a huge pain in the rear...and I include especially the Masters. I went for two days and don't need to go again.
Like it or not a PGA Tour event is a television event. The crowds are like the folks who are in the audience for Leno...they are there to enhance the experience for TV viewers - sound effects (clapping) and visuals (crowding the fairways and greens) .
Great post - Like it or not , the economy HAS changed...and the folks who are making millions to "play" (e.g.athletes of all varieties) WILL be impacted negatively (just like the rest of us). To think otherwise is incredibly naive...
Bloomberg doesn't know that Pacific Palisades is part of Los Angeles.
The fine for breaking the no-entertainment rule is $100k.
Truly the blind leading the blind.
Malfeasance is a wrong committed by a public official. Perhaps using MISFEASANCE (a wrong committed by non-public officals) would have been more appropriate
Oh wait, good thing we aren't in Canada this go round. Also, I don't recall a pool at Harding Park, so Amtrak can't try and one up CN.
I am afraid this is the tip of the ice berg. Profitable banks being told to be the 'good guy' and take the money, then having it come back and bite them:
http://www.bizjournals.com/dayton/stories/2009/02/16/daily19.html
Hopefully there are more US Banks and Northern Trusts out there that, if they can, will run 'business as usual' and try and GROW, or at least maintain, their business instead of cowering under a rock somewhere until Washington tells us things are better.
(Yes, I know US Bank is dropping the GMO after this year, and maybe not the best example from a golf perspective. Wait, did I call it the GMO, am I really that old!)
If the fans are there filling the same role they fill for Leno, they how come they charge admission?
Tell me, those PGA Tour charity dollars...do you think any of it comes from ticket sales?
If NBC was able to charge tourists for the privilige of sitting in Leno's studio audience, it is a lock they would do it.
My larger point, however, was that the typical PGA Tour event has evolved (devolved?) into a televison show.
The golf course has become a TV studio with cameras everywhere; talking heads (of various skill) manning the towers & stalking the fairways; elaborate graphics; human interest feature-ettes; and minute details about every single shot - distance, clubselection, degree of difficulty slong with continuous commentary and "analysis".
There are (very roughly) 2 million viewers and 20,000 spectators.
I assume Northern Trust sponsors the LA Open for two main reasons: it is a great event for lavishly entertaining their key customers and prospects; and the televison show provides an excellent platform (MBA-speak!) for their commercials and announcer-plugs to reach a highly desirable audience for their national brand-building campaign.
I would guess that they have very low expectations for the on-course signage to move the needle with those walking the course.
I'm sure, Geoff, that you could answer my question about the infows and outflows. And since money is fungiable, some of the gate money goes to the charity.
I have another question about tournament economics: of the people walking the course on any given day, what % are daily walk-ons and what % are corporate customers? I have lived in a few towns where everyone who was in any way associated with one of the major sponsors (customer, vendor, drinking buddy) had offers for free tickets. I would not be surprised if half the folks walking the course at some events are comped.