Is The PGA Tour Going To Fight Back?

Granted, they've talked about their charitable work so much that some people might not want to hear it, but in response to media attacks on golf and tournament sponsorship I would have expected a more visible sign of urgency from Ponte Vedra.

Perhaps some talking points about what the PGA Tour means to the economy? Or maybe some World Golf Foundation bullet points on the game's economic impact? Just something to stop the bleeding.

Maybe this piece of New York Post composite art accompanying a Bloomberg wire story and courtesy of reader Jim will do the trick:

 

"I would still say we are in a position where we can see lesser growth — but growth."

The most disturbing thing about FBR pulling out of the Scottsdale stop (thanks Steven T.) is not that a penny stock investment group can't go on, but that the Commissioner is talking about "bumps in the road" and offering this as reported by Doug Ferguson. Finchem is discussing extensions with Travelers and Accenture during a press room gathering Tuesday:

"In these times, any level of growth is a victory," he said. "And if I had to guess right now where we come out after another year of this, I would still say we are in a position where we can see lesser growth — but growth."

Is the growth mantra is appropriate right now? I'm guessing Greg Norman suggesting this (thanks reader John) would not agree with Commissioner:

"Prize money's being scaled back in Europe, I wouldn't be surprised if prize money's scaled back in the U.S. just out of respect to every citizen and taxpayer over there who's suffering dramatically," the two-time British Open champion was quoted as saying Wednesday on the Australian Broadcasting Corp. Web site. "It seems like on the PGA Tour the players are still playing for a million dollars first week, like they're recession-proof.

"I think there's got to be a lot of sensitivity shown. If I was PGA commissioner that's what I would be recommending," he said.

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.

U B What? Yet Another Significant PGA Tour Sponsor Up To No Good

AP's Curt Anderson explains how the IRS is claiming that UBS, sponsor of several events including The Players, Arnold Palmer Invitational and several other events around the globe, "created hundreds of sham offshore entities and lied to U.S. officials in an elaborate scheme to conceal the overseas accounts of wealthy Americans, the Internal Revenue Service claimed in federal court documents."

"IMG is so deeply involved with Stanford that it has a one-man office in Memphis to assist with the local Tour stop."

Alex Miceli shares all sorts of fun tidbits about the Stanford situation, the PGA Tour and IMG. First, regarding the state of the Memphis stop:

The Tour could attempt to find another sponsor or draw upon its sizable financial reserves – about $200 million, sources said – to underwrite the event on its own.

There is a precedent for such intervention: In 2000, the first year of the Tampa Bay Classic, the Tour contributed a part of the $2.4 million purse.

It was unclear whether the Tour or the event has received any monies from Stanford for the 2009 sponsorship. Finchem would not discuss payment details, but sources familiar with sponsorship deals say such agreements typically are handled in one of two ways: a large, usually 50 percent payment up front, and the balance paid before the event week – or nearly a complete payment just weeks before the event.

“Payment schedules are a function of a lot of different things with companies,” Finchem said. “A lot of companies account differently; they want to pay differently. There is no rhyme or reason to it.”

And on IMG:

The firm manages the Stanford St. Jude Championship; and sponsorship contracts to IMG clients Villegas, Pressel and Singh. Stanford also is affiliated with IMG’s prized client, Tiger Woods, with a three-year founding sponsorship of AT&T National, a Tiger Woods Foundation event.

IMG is so deeply involved with Stanford that it has a one-man office in Memphis to assist with the local Tour stop.

"Since 1974, Ms Wade has benefited from financial advice from her management company, International Management Group"

A reader took exception to IMG's Mark Steinberg and insistence that IMG does not provide financial advice to its clients and therefore, could not have been intertwined with Stanford Financial, as the New York Post is claiming. I'm really not sure how the reader drew this conclusion because...wait, what was it that tennis great Virginia Wade said in a 2005 Telegraph story?

Since 1974, Ms Wade has benefited from financial advice from her management company, International Management Group "We are in touch regularly, maybe once a month. If you are interfering all the time it gets hard for them."

Hilariously, the article details how she owned a building with the late Mark McCormack, invested in a Cleveland based insurance company where IMG hapens to be located, and well, there's that quote. 

"IMG does not give investment advice to our clients...period."

Thanks to reader Andrew for this Darren Rovell story quoting Mark Steinberg on IMG's relationship with the troubled Stanford Financial.

"The suggestion conveniently made by "unnamed sources" about IMG's business affairs involving our clients in today's New York Post is complete fiction, designed to benefit the people making the claims, and is completely irresponsible.

"IMG's 50-year history of success is built upon staunchly protecting the professional interests of our clients. IMG does not give investment advice to our clients...period. Our agreement with Stanford is only to provide consulting services in the area of sponsorships and activation in golf. We do not now, nor have we ever had, a 'quid pro quo' agreement with Stanford or anyone else where IMG would be compensated in exchange for directing our clients to invest with them. We could not have maintained our near half century lead in the industry if we had done anything else. For 'unnamed sources" to imply otherwise is simply reprehensible."

Did IMG Steer Clients To Stanford Financial?

Thanks to reader Tuco for Peter Lauria and Kaja Whitehouse's New York Post story claiming that IMG directed its clients to Stanford Financial. IMG is vehemently denying...

According to three sources with knowledge of the situation, IMG and Stanford have a quid-pro-quo agreement under which Stanford Financial pays IMG a low- to mid-seven-figure consulting fee in exchange for IMG advising its clients - which include golfers Tiger Woods, Arnold Palmer, David Toms, Sergio Garcia and others - to have their money managed by Stanford.

The backroom bargaining has exposed IMG to charges of double-dealing, and is raising questions about where the firm's allegiances lay: with Stanford Financial or its athlete clients.

"It's certainly a conflict of interest," said one source. "IMG is trading on its athletes' names to make money for themselves and then turning around and telling them to invest money with Stanford."

PGA Tour Sponsors: "Three Camps"

I thought reader "Hitting Three" made some interesting observations (as did several others) on the original Stanford Financial post.  Hitting Three broke down PGA Tour sponsors into categories of financial well-being. In case you missed it:

PGA Tour sponsors, 3 camps:

Camp Solid: (24 events)
=======================
Mercedes...seem to be fine.
Sony...seem to be fine.
AT&T...seem to be fine.
Northern Trust...seem to be fine, for a bank anyway.
Accenture...seem to be fine.
Honda...seem to be fine.
Mastercard....debatable but AP can always rope in a new one.
Computer Associates...seem fine.
Transitions...ditto.
Shell...should be fine.
Master's...self-funding, what a concept!! (obviously not a PGA Tour event)
Verizon...seem to be fine.
Zurich...ditto.
Valero...stock went from $75 to $15, but otherwise fine?
HP...fine.
Travelers...ditto.
AT&T (2)...seem to be fine.
John Deere...stock from $90 to $30, but seem fiscally sound.
Royal Bank of Canada...prob be ok, but keep an eye on 'em.
Bridgestone...should be fine.
BMW...ditto.
Coca Cola...ditto. (it's "Co'cola" for the uninitiated)
Viking...men will always grill out.
Disney...guess there will always be a Disney tournament.

Camp Coin Flip: (8 events)
==========================
Mayakoba...luxury travel, who knows, unless it's a wash site then they are fine?
Crowne Plaza...hotel biz? has to be a questionmark.
Morgan Stanley...appears to have survived brush with death, but TARP limits them.
Wyndham...hotel biz? stock has gone from $37 to $4, I'd be worried.
Deutsche Bank...another bank, stock is down 75%, flip a coin.
Turning Stone...prob be ok, I guess.
Shriners...who is the sponsor?
Fry's...with the recent fraud who knows?

Band Camp: (10 events)
======================
Chrysler...life support, probably not a viable sponsor going forward.
FBR...stock traded at .22c today. Most .22c'rs don't make it.
Buick...ditto Chrysler.
Banco Popular...bank, stock down 75% in last 3 years, seems v shaky.
Wachovia...vaporized, acquiror has no interest in Tour.
Stanford...raided today by SEC for "massive on-going fraud".
US Bank...bailed on the sponsorship after '09.
Buick (2)...life support, brand may not even survive.
Legends..."a project that is currently on hold" -- doubt they are back for '10.
Barclays...stock down 87%, and it's a bank, Ty bulk up in legal!

- 56% of events appear to be on solid footing.
- 20% in coin flip territory.
- 24% looking like burnt toast.

Not a pretty picture... 02.17.2009 | Unregistered CommenterHitting Three

 

Stanford Financial Clippings

Steve Elling labels the Stanford Financial charges a disaster and Bob Harig manages to wrangle a quote out of the LPGA spokesman who says they are monitoring the situation.

Geoff Caulkins talks to a FedEx briefcase and it sure sounds like the air freight giant is already in talks to rescue the Memphis stop they once sponsored.

Martha Graybow of Reuters says the case raises new questions about the SEC. But I found some of the timing mentioned interesting considering the LPGA just recently signed up (Nov. 19) Stanford for its Tour Championship despite this:

A complaint filed last year against Stanford's firm by two former employees contended they were aware of a U.S. Securities and Exchange Commission inquiry into the firm's sales practices while they worked there.

The employees, Mark Tidwell and Charles Rawl, said in their Texas state court lawsuit that they left rather than participate in unlawful business practices. They departed in late 2007.

A Guardian blog post by Andy Bull examines the likelihood of poor due diligence performed by the England and Wales Cricket Board before taking Stanford's sponsorship money. So will questions will be raised about the due dilligence carried out by the PGA and LPGA Tours who are so visibly leaning on Stanford?

More immediately, the Stanford Financial "Eagles for St. Jude" spots should prove to be uncomfortable for the Golf Channel anchor who has to note the program. As should future airings of these ads:



Stanford Financial Raided By U.S. Marshalls**

Oops. Now this should test those ironclad PGA Tour contracts. And on the LPGA side, ADT must be looking better and better down at headquarters.

"Stanford Depositors Head to Antigua for Redemptions"

Thanks to a reader for this WSJ story on investors arriving in Antiqua to withdraw their money from offshore accounts of Stanford Financial. It doesn't sound good, and as the reader reminded me, Stanford's ties to the PGA Tour extend beyond the Memphis event and the LPGA's season ending Tour Championship, with major IMG endorsement deals and the eagles for St. Jude program on the PGA and LPGA Tours.

 

PGA Tour Investigating Whether Poppy Hills Is Too Awful To Continue As Venue

That'll be a short investigation.

Still, Thomas Bonk reports that Ponte Vedra is analyzing the merits of shaking up the rotation and moving to recently renovated Fort Ord. And he shares this non-denial denial from a Fort Ord guy:

Ed Bennett, project manager for Bayonet and Black Horse said that discussions are underway that involve the course as a potential tournament site. "There have been rumors for years since Poppy Hills came on the scene that some tour players didn't like it. But we are in the middle of an exciting tournament at a different course and talking too much about a different product right now doesn't seem right."

A different product? That could be one of the nicest things anyone has ever called Poppy Hills.