Letter From Saugerties, December 11, 2006

Frank Hannigan served the USGA for 28 years, including six as Executive Director. He weighs in with another letter (previous editions can be read here, here and here). This time he writes about the USGA's decision to sign on American Express as a corporate sponsor, and reveals that the decision may have been influenced by a significant and unprecedented financial loss in 2006. 

Here are some, if not all, of the details of the recently announced commercial arrangement between the United States Golf Association and American Express, the first overt commercial sponsorship deal ever made by the USGA.

What’s in it for the USGA is the ability to bombard a culled American Express mailing list of more than 1 million with junk mail appeals. The recipients will be implored to become USGA “members.”

There will also be an email effort -  spam.    

The USGA claims it now has 800,000 individual “members” who have nothing to say about the entity to which they allegedly belong. They pay $l5 in the first year, $25 thereafter, and there are a surprising number who, out of the goodness and naivety of their hearts, send in amounts greater than $25.  This results, says the USGA, in an annual net of $2 million, making it the only significant profit center other than the US Open.   The Open’s profit is enormous but unrevealed.     
                    
The new venture, says the governing body, has nothing to do with money.  It is rather an “outreach” program designed to make more golfers understand the Rules of Golf, learn how to properly repair divots and yearn to acquire USGA Handicaps.

It could happen that the project will result in a big jump in USGA “members.”  Additional profit would be regarded as an accidental by-product of the “outreach.”   Remember:  it is NOT about the money.

Personally, I have regarded the USGA as excessively wealthy for a long time.   

However, for 2006 the USGA reports will show an operations loss of $7 million, i.e., it spent $7 million more than it took in.

I find that amazing since the gross revenue for a US Open is more than $50 million, or about what a small major league baseball team like Kansas City takes in for a full season.   

The USGA, which reveals about its finances only what it is required to do legally, in this instance cites a growing number of annual grants or gifts.

During 2006 there were 201 grants totaling $4,842,855.   Of that total more than $2 million was given to the First Tee, the PGA Tour charity.  The USGA has been by far the largest donor to the First Tee.   (May any cynic be struck down who avers that the USGA’s generosity to the First Tee is a means of tamping down any Tour criticism about the size of US Open prize money which, at $5.5 million sounds like a lot but in reality is less than 15% of the gross compared to the 50% that goes to players in unionized team sports.)   

This grant program was initially pointed at increasing the number of golfers.  But when that didn’t work (golf has been essentially flat in terms of number of rounds played for  many years) the propaganda for the grants was shifted toward education – especially when it comes to exposing  children from low income backgrounds to the inestimable moral virtues of golf.

Despite the one-year operations loss, nobody in Far Hills is going to debtors prison since the USGA investments yielded a jump in value of about $25 million this year to offset the $7 million loss in operations.   The total book value of USGA investments is on the northern side of $250 million.

As for American Express, it became all warm and cuddly about the USGA after a divorce from the PGA Tour.  American Express had been a “title sponsor” of a tour event but got bent out of shape when offered what it regarded as unsuitable dates and locations for the future.

Now it will receive from the USGA:

1. The USGA’s own mailing list, piddling in Amex terms, but an effective way of getting more cards out there.

2.  A day or more when some customers might play the year’s US Open course.  Next year the USGA essentially owns Oakmont for spring outings for four days.   This is part of the basic arrangement whereby Oakmont receives a rental fee of an estimated  $7 million.

3.    The right to sell an unspecified number of US Open tickets to its cardholders even though the 2007 Open had earlier been described as sold out.  The lucky buyers will also have access to something called The  Trophy Club.  Its portals can be breached only by those who pay for the privilege.  They then have the right to purchase food and beverages at serious prices.  The USGA keeps about 30% of the cost of food and drink.

A man I know who wants tickets for business reasons jumped in quickly and was able to buy 3 such tickets (on his card, of course) good for Wednesday through Sunday.  The total price:  $1803.35 – which does include handling and mailing..

4.  As yet undetermined exclusive rights with respect to other USGA championships.   The USGA says it might offer those who buy tickets to the Women’s Open by way of American Express a Rules of Golf seminar on a roped off section of the course. The rank and file presumably would not be allowed to listen in.

5.  General good will because of its relationship with the USGA which has not bestowed its  blessings  on Visa or MasterCard. This is being triangulated in ads featuring Tiger Woods who gets a ton of money for endorsing American Express.

The USGA says this is not to be regarded as its one and only deal with commercial sponsors.    Example:  An airline could be induced to offer sharply reduced fares for USGA staff and committee travel.   This could be thought of as bridging the gap between those USGA volunteers who now have to pay for travel and the royalty at the summit of the USGA who have occasional access to a USGA-leased jet (speaking of ways to lose $7 million).

The USGA, in my view, has been totally re-defined starting in or about 1995 into an entity that ducks conflict but needs badly to be loved.   It is driven excessively by personality cults.  The primary winners during the last 10 years have been current President Walter Driver and his predecessor Fred Ridley.

Meanwhile, I muse about Howard Clark who served on the Executive Committee during the 1980s.    Clark was CEO of American Express and perhaps as much responsible as any person for making this a nation of little plastic cards.

Howard Clark, trust me, would not have bought into a USGA that thought it needed to do deals with his company. He would have understood that the selling of soul is part of such a process and it’s not worth the price.

And Yet Even More From The Communications Summit

Well I'm through page 11 of the 50 page PGA Tour Communications Summit and I now realize that in my last posting that I missed this absolutely priceless line from Barb Kaufman:

Finding number one, and this came from the media contingency.  The majority of the media felt that the Tour media outreach efforts are sufficient, which is like, okay, but in need of improvement.  The blocking and tackling is good, just getting in there and trenching, but quite frankly needed more creativity and a little more sizzle on the steak moving forward.

Remember, I simply copy and paste this stuff. I only wish I could make something like that up.

The event was then turned over to Tim Urstom, who moderated a Q&A.

Let me begin by just introducing the panel to you.  First of all, we've got Lance Barrow from CBS Sports (tepid applause), come on up; we've got James Cramer from the PGA TOUR (even more tepid applause); Doug Ferguson from the Associated Press (outright hissing); Brian Hewitt from The Golf Channel (violently loud booing); Clarke Jones from IMG (even louder booing); John Kaczkowski from the BMW Championship (cries for the Western Open's return); Sid Wilson from the PGA TOUR (standing ovation).  Come on up, guys.

Just wanted to make sure I hadn't lost you yet.

This exchange was interesting and had to earn Doug some dirty looks from the assembled suits:

DOUG FERGUSON:  I don't know if this answers your fruit question, but I think where you need to head is something that Fred Couples said a couple years ago.  I could repeat it but we'd be here all day and you probably wouldn't understand it anyway.  He was on the range at Sherwood about two years ago, and he was talking about whether the Giants were going to get to the playoffs, whether the Vikings are going to make a trade, whether the Mariners were going to make a trade, something with hockey, back to the Giants, back to the Vikings.  Then he hit a few more balls, looked up, and he said, "Do you think guys in our locker rooms are talking about us the way we're talking about them?  Probably not."  And I think that's where golf needs to get.  I don't think we're there.

People in this room may think it's a big deal, but when you look at the mainstream, I think it's still a good sport.  Debate is healthy.

Sometimes I think others might see it as controversy, as negative.  It's not always negative.  Debate sometimes is very healthy.  Sometimes things get taken too personally.  The bottom line is you want conversation, you want to be part of the conversation, and that I think is where you need to head.

I don't think that was the purpose of this summit, Doug.

No, this was a gathering to learn how we can promote the product better. Debate? Please. That's interesting. Interesting is dangerous. It causes people to think and could disrupt their consumption patterns. Get with it!

Huggan On Turner

John Huggan profiles Greg Turner's attempts to revitalize New Zealand golf and in particular, the development of young players.

Long frustrated by the virtual abandonment by New Zealand Golf - equivalent of the Scottish Golf Union - of his young compatriots the minute they turn professional - and, in turn, their consequent inability to make any sort of impact in any kind of numbers - the 43-year-old former European Tour player, who won 12 times around the world during an 18-year career highlighted by his role in the winning International side at the 1998 Presidents Cup, has devised an initiative named Wedge - Winning Edge - in an attempt to smooth what can be a traumatic transition from the amateur ranks.

And...

"Any high-performance programme is about producing world-class players," says Turner, whose elder brothers Brian and Glenn represented their country at hockey and cricket respectively. "Which is different from producing only world-class amateurs. My original expectation was that, once that subtle difference was made clear to New Zealand Golf, the irrefutable logic of it all would get them on board."

Well, naive is the word that comes to mind. "Things just don't happen that way in golf. Or, as it turned out after I talked with my advisory board, in many sports. By their very nature, sporting organisations are built on ancient foundations, and have layer upon layer of bureaucracy. They change course like a super-tanker."

All of which left Turner to battle on alone, having also gained little encouragement from the New Zealand PGA. "The PGA was no help either," he shrugs. "It exists to service the needs of club professionals, not to help young players make it in the game. Which is why the tours broke away from the PGAs in the first place. There are irreconcilable issues there.

"Having said that, the PGA should have got involved. At the end of the day, their members are best served by New Zealanders winning things like US Opens. More people are going to be buying sweaters and paying for lessons when success breeds interest in the game. But all of that does seem a leap too far in philosophy!"

So far as Turner's philosophy goes, a closer look at Wedge reveals a four-pronged high-performance system designed to bring the best out of every young player placed in its path.

"First, we offer logistical help. There is so much that needs to be explained to new professionals. They need to know where they should be playing, how the circuits work and how things work within the circuits. How do you enter events? How do you get to tour school? What's the most logical path to take? It's basic but important.

"We offer financial help, which doesn't mean we hand over a pile of cash. There is any number of corporations or individuals who would buy a piece of a young player, if you gave them a credible model to do just that. So the young lads need to offer, say, three-year contracts with 15 $10,000 shares, and have a monitoring board that has mentors like Grant Fox and Brett Stephen on it. They will sign off on expenses."

Suddenly, that is an attractive proposition for a golf-minded investor. "Then there is the mentoring itself. Our players will have access to the likes of Coutts and Oliver, men who have achieved at the very highest level. The kids can pick their brains on what it takes to succeed. Basically, they will be rubbing shoulders with winners.

"And the fourth part of the equation is the GTNZ series of tournaments, which will hopefully be the strongest possible domestic competitive arena. When our guys do make it out on tour, they will be a couple of steps further along the way because of those events at home."

Shooting 70 With 19 Putts...

It seems impossible, but Jarrod Moseley did it.

And Yet More From The Communications Summit

After Finchem and Votaw put the assembled to sleep, their market research speaker took the podium. This is Barb Kaufman of Kaufman and Associates talking about her findings on the media-fan-player relationship.

Second point, on the fan component, fans need more technicolor, and a lot of the media I spoke with were not only representing golf but also cover other sports, and felt fairly strongly that fans really love the technicolor presentation of athletes. 

And you think they only talk like this in Hollywood?  What does that mean, need more technicolor?

Speaking of that, isn't Technicolor a registered trademark?  

They want to know more than their performance.  They want a little more depth, a little more context.  If they get that, it'll expand and create greater loyalty and longevity and loyalty to your sport.  NASCAR and the NFL were cited as benchmarks in that regard.

We're benchmarking!

A top line of the agent feedback, and I'm sure this is really going to shock you because it was the flipside of the coin, the agent and manager perceptions are that overall traditional golf media has become lazy and stale.  The sameole, sameole content has bred some degree of ambivalence by the players, and they just don't want to engage any longer because they don't feel the content is very innovative and creative.

Well, we could do more New York Post type stuff. That would be innovative and creative for golf! Bet the agents would love that.

The golf print media is becoming a dinosaur according to agents, and I want to specify that this means not the written word, but to Tim's point, print media in the traditional sense.  A lot of the younger players are very in tune to new media and would much rather give their time to those media outlets.  One particular agent said players would rather have 30 seconds on SportsCenter than a 900 word article written about them.

Wouldn't we all.

Players are becoming significantly more guarded with the media in the past by virtue of being burned.  Now, having said that, the majority of agents said it's a small percentage of the media who, quote, burn, shall we say, and that violators should bear the brunt of the burning and not all media because not all media are guilty of this travesty.

Travesty?

Many of the print media believe overall Tour coverage will decline and is declining if the playing field is not level between the electronic, print and quite frankly other emerging media.  They felt fairly strongly that preference and rights deals provide access to some media outlets and not others, which makes it more difficult to do my job.

From the agents' perspective, younger players are viewed as presenting great opportunities for unique and colorful content because they get it.  They've grown up in this entertainment world of sport and they know exactly what it takes to compete and keep their star rising.

They know branding!

It was at this point I had to take another break. Small doses, baby!

The Ball Problem

Not the golf one, but the NBA one, which ESPN.com's Marc Stein analyzes quite nicely here.

Reading this, it's easy to imagine a similar debacle in golf if and when it becomes clear the USGA will never roll back the ball and someone tries to manufacture a true tournament ball that is foisted upon players.

More From The Communications Summit

I used to think that if I was told I had six months to live that I would spend it watching The Big Break or Dr. Phil or listening to Celine Dion albums, but now I'm inclined to think that the PGA Tour Communications Summit will do the trick.

I could only get through 5 more pages. But Tim Finchem and Ty Votaw's statements were eye opening, if you can navigate the hurdles. I was tempted to plug this into the Ali G tranzlata, but why ruin such authentic frontier gibberish?

Finchem:

And then the second thing was, and this was we thought the most crucial thing, and it kind of overlaps the focus on tournaments, was to improve our ability working with our partners to utilize the media overall to communicate everything about the sport, the competition, who the players are, what the sport does and the rest, to engage the fans more effectively through the media. 

Ali Geoff tranzlata: Why spend all of that money on ad campaigns when you can get writers to spread the propaganda? Oh sorry...

If we're successful in moving the needle in this area, there are benefits for everybody in this room.  There are clearly benefits for our membership and for our tournaments and for our ability to grow the strength of this platform and continue to move the needle in terms of the benefits for players, the benefits for charities and our tournaments and the impact on the game of golf.

Is this really a good time to be using the needle metaphor? Just a thought.

The bottom line is, at the end of the day, we're moving needles here.

Here's Votaw talking about similar summits in other sports:

One interesting finding that we discovered in looking at those other summits was the extent to which they did not include the members of the media in the actual implementation and conduct of their communications summits.  They tended to include everybody but the media in gathering their communications stakeholders in order to improve their media outreach activities.

Yes, that's because those others sports didn't view the media as a group of stenographers who might just be dumb enough to write what you tell them.

Now, in the planning for this day, the phrase "sunlight is the best disinfectant" has come up many times in making sure if we do this and we do this right, we have to include all the stakeholders, including the media, get all the issues out on the table and get them out in the open and talk about them, and that's what we're going to do today.

Sunlight is the best disinfectant? That's one of those great metaphors that makes you stop and think, what the hell is he talking about? He is good!

To our partners in the golf equipment industry, we hope you take away the message that we want to work with you and identify and take advantage of quality media opportunities for players endorsing your products both within the golf industry as well as mass media markets.

Because moving your product is paramount to us.

Just look at how well that league driven product focus has worked for the NBA recently.

Golf World's 2006 Newsmakers

I know, I vowed never to complain about another list ever again. But Golf World's top 25 newsmakers of 2006 isn't as much a list as it is well, okay it's a list. And I think the warm fall went to the heads of the folks in Wilton.

Here are my gripes, because, you know, it really matters in the big scheme of life.

No. 24 Torrey Pines - actually, this was a great and surprising addition, setting up nicely what may become a huge story in 2007. (That is, the lousy state of affairs at the 2008 U.S. Open site, starting with questions about course conditions.)

No. 23 Drug testing - Fine, leave it out of the top 20 even though you, Golf World did a stellar job last fall looking into this and Tiger made a bold statement that humiliated the Commissioner and further undermined his credibility. Okay, this is probably where it belongs until you see...

No. 22 Super seniors - Jay Haas and Loren Roberts dominating the Champions Tour?  Top 100 maybe. But top 25? This is the Rich Harvest Links of Golf World's list. They're allowed one I guess.

No. 21 Hoylake's surprise - This was a surprise only because of Ron Whitten's misfire review.

No. 20 Hootie's departure - Come on, the man deserves top 10 status. His turbulent tenure certainly warrants a higher spot than...

No. 18 John Daly -  A divorce, a reality show and losing his card does not make this newsworthy. This is simply another year in the life our favorite country crooner!

No. 14 The New TV Deal - Again, this one probably should rank a little higher considering what a huge story it was and will continue to be thanks to the FedEx Cup. This little bit from Stu Schneider's write up caught my eye:

TGC's hiring of Nick Faldo made positive headlines, but the "Why The Golf Channel?" questions still surround the contract, as do other rumors, including the existence of an "out clause" that the tour could exercise at some point.

Well, that would certainly make the 15-year commitment look less ridiculous.

And finally, the ultimate you have to be kidding me...

No. 11 Camillo Villegas

No. 10 Bomb and Gouge crowd

Guys and gals, did we make this list up in February? Villegas didn't win a tournament, Holmes disappeared after CBS crowned him the second coming of Christ and Bubba had a nice year. But Top 10?

Hey, at least the final 9 were spot on.  

Chicago GC/Macdonald Exhibit

Bob Goldsborough files a Chicago Tribune piece on the new museum exhibit devoted to Chicago GC and C.B. Macdonald:

 A new exhibit filled with rare golf artifacts to pay tribute to the landmark course at the 114-year-old Chicago Golf Club, just outside Wheaton, opened recently in the Center for History in a former firehouse at 315 W. Front St.

Titled "Fairways, Greens & Clubs," the $500,000 exhibit also highlights the Chicago area's influence on the evolution of golf in the Midwest, particularly from the 1890s through the 1940s. With red leather chairs, a faux fireplace and 30 custom-made wood display cabinets, the exhibit has the luxurious feel of a golf clubhouse.

And...

There are trophies and memorabilia on loan from the Onwentsia Club in Lake Forest, the North Shore Country Club in Glenview, the Flossmoor Country Club in Flossmoor and the Olympia Fields Country Club in Olympia Fields.

The exhibit also celebrates the father of American golf architecture, Charles Blair Macdonald, who founded Chicago Golf and laid out its course.

Macdonald, whose expertise as a player is demonstrated through two of the trophies he won, lived in unincorporated Wheaton from the club's founding until 1905. His mansion, which overlooks the club, is known as Ballyshear and still stands.

Lorne Visits With Ben and Bill...

...at the opening of We-Ko-Pa in Arizona.

Redoing TPC Las Colinas...Again

Todd Wills has the details in the Dallas Morning News.

The EDS Byron Nelson Championship, after its namesake's death, will be getting a redesigned TPC Four Seasons at Las Colinas to attract the PGA Tour's top players.

The renovations, which will cost $4 million to $6 million, will begin immediately after the April 26-29 tournament.

Tournament officials had been seeking major changes, highlighted by a redesign of the TPC, to maintain the Nelson's status as a top tour stop.

"We want an update that will generate a 'wow' on several holes," director of golf Paul Earnest said.

D.A. Weibring Golf Resources Group, John Fought Design and Gil Hanse Golf Course Design are the three finalists for the renovations, said Angela Enright, director of public relations for the Four Seasons Resort and Club.

Whichever one is chosen, the architect will oversee a project that includes new greens and several redesigned holes.

Earnest said they will look for two or three spots where 30 to 40 yards can be added to keep up with the players and new technology.

"Creating a marketing platform from which these independent contractors..."

Tim Finchem, from the first page of the transcript of the "PGA TOUR INAUGURAL COMMUNICATIONS SUMMIT..."

If we could just think for a second about what we're all about, we're all about creating benefits to players directly and indirectly.  Directly is cash and prize money and retirement plans, and indirectly is creating a marketing platform from which these independent contractors who are our members can take advantage of, can utilize that platform in conjunction with the agents and business consultants that are represented here today and others in their lives to build their future.  That's part one of what we do.   

Part two of what we do is we try to create a platform that will throw off the opportunity for charitable organizations around the country to utilize our collective efforts to impact individuals' lives through charitable work nationally and in the markets where we play. 

And then thirdly, we are dedicated to growing the game and protecting the game.  So those are the three things we try to do with our effort. Now, over the last six years, going back to 2000, we have been focusing on the long term of the sport and looking at ways that we could elevate this platform, elevate the business model, and create more impact. 

I stopped reading after that. But I think it's safe to say that platform is making a comback!

"Two inches by the time we get to The Players."

In his story on the TPC Sawgrass Players Stadium Course redo, Stan Awtrey shares this quote from the PGA Tour's David Pillsbury, which I must say doesn't sound like the course is returning to its original style of de-emphasizing rough:

"The feedback has been extremely positive," Pillsbury said. "The rough is very punitive. It will grow another inch and a half or two inches by the time we get to The Players."

'I'm still three-putting but now I don't give a..."

Thanks to reader Greg for this very serious John Coomber piece on the role antidepressants have played in the lives of Brett Ogle, Stuart Appleby and Steven Bowditch. It ends on this light note.

Five-time British Open champion Peter Thomson, who is at Royal Sydney this week, said he never knew depression or stress related illness to be a factor during his playing days, though he suspected some who sought refuge in alcohol may have been suffering.

Thomson recalled that American golfer Tommy Bolt, famous for his temper tantrums on the course, once tried taking sedatives to control his rage.

"In 1956 (the year Thomson won his third successive British Open) Tommy started taking a drug like a kind of valium to calm him down," he said.

"When I came back to America for the 1957 season I asked him if he was still taking the tablets and whether they were doing him any good.

"'Yeah,' he said. 'I'm still three-putting but now I don't give a shit.'"  

"We are talking about a 37-week accomplishment."

I'm sure the PGA Tour's Ric Clarson means well, but everytime he talks about the FedEx Cup, he gives you new reasons to not like it.

From Steve Elling in the Orlando Sentinel, writing about the 5-year exemption that goes with winning the FedEx Cup: 

Forget the $10 million bonus.

That's not chicken feed, but it's not all the winner of the forthcoming FedEx Cup will earn. The PGA Tour has added a potentially more valuable carrot -- a five-year playing exemption to the FedEx winner, matching the reward accorded winners of golf's vaunted major championships.

Sounds like heresy, huh? Then listen to this.

"Todd Hamilton, Ben Curtis and Shaun Micheel, they all had a significant one-week accomplishment," tour official Ric Clarson said of three recent, and mostly obscure, major winners. "That's on the resume for the rest of their life, but we are talking about a 37-week accomplishment. I'd say this trumps that.

"We are not saying the FedEx Cup is better than winning a major, but it's a totally different measurement."

Okay, you're saying, he's drinking the Kool-Aid, no news flash there. Then Elling drops this: 

As if the exemption isn't enough to stir conversation, Clarson said that based on computer models run by the tour, it is possible that a player could win the FedEx Cup race without winning any of the four so-called playoff events in August and September.

Which again is a reminder that these "playoffs" will be the most confusing in the history of sports, as viewers wait anxiously after the rounds for the points standings to be spit out of the computer. A true playoff would simply eliminate people each week in the build up to the Tour Championship.

Elling concludes:

Not to pick on the guy, but in theory, a player like David Duval could get hot for four weeks, win the FedEx bonus and then fall off the face of the earth, just like he did after winning the 2001 British Open. Yet his exemption would cement a spot for him on tour.

Oh, you can pick on him.