Safe To Say: "Value Proposition" A Must On Any MBA-Speak Bingo Board

Here I was just getting comfortable with value modulations when I come to learn it all comes down to value propositions.

Randell Mell reports that ADT actually might have liked to have stayed on as the sponsor of a year-end, must see, ultra cool event on the LPGA Tour. But the LPGA's increased asking price is the real culprit.

I think the countdown clock just started ticking for the Brand Lady.

Tour pros were informed by the LPGA one month ago that ADT chose not to renew because the company was pursuing different marketing objectives.

"The explanation ADT gave us for not renewing was that its marketing objectives and means of going about attracting customers was changing and the ADT Championship didn't fit into its future plans," said Mike Nichols, LPGA vice president of tournament business affairs.

ADT President John Koch said there was more to the decision.

"Basically, the change in the renewal pricing caused us to re-evaluate the value proposition of the overall program," Koch said. "You will hear various takes on that, but it is inaccurate for anyone to state that our decision was based on any form of cost cutting by our company. In fact, we have increased our marketing budget."

The LPGA made various proposals to ADT, including making ADT the umbrella sponsor of a series of LPGA events. The proposal the LPGA favored most was moving the event to the start of the 2010 season, where it would no longer compete against football and would be more appealing to TV as part of a potential package that the LPGA could sell to networks.

While ADT officials expressed concern about altering the nature of the event with a big payoff at season's start, Koch said it wasn't an overriding factor in his company's decision not to renew.

Koch would not reveal what ADT paid for its title sponsorship in the latest two-year contract extension that ends this year, but industry insiders estimate the company paid $3 million per year. While Koch also would not divulge the LPGA's asking prices, an industry expert said the tour was asking a substantial increase, prices beyond what adding weekend network TV coverage would require.

Koch said his company enjoyed a "great relationship" with the LPGA, a "good dialogue" and carefully considered all the LPGA's proposals, but ultimately decided not to accept.

"At the end of the day, there wasn't any reason other than value proposition," Koch said. "They have the right to think what the value of their tournament is. We respect them for that."

But just think, they won't have to compete with football now! Oh wait, there's no sponsor. Or course. Or date set.

Why take an established attention-getter--albeit one in November running up against the NFL--and exchange that with a year-starting $1 million event (?!?) that might happen?

And even the master negotiator himself isn't expressing much admiration for the Commissioner's work.

Donald Trump, who has been an unofficial host of the event for its entire eight-year run as owner of Trump International, was disappointed the LPGA didn't make ADT a better offer.

"Outside the U.S. Open, this has been the most important event on the ladies' tour," Trump said. "It is sad it has to end, and perhaps the tour should have made some concessions."

Perhaps? Who said The Donald isn't a kind soul?

And this from Juli Inkster:

"ADT and their people have been nothing but very supportive of the LPGA Tour and its players," said Hall of Famer Juli Inkster, a member of the LPGA's Board of Directors once sponsored by ADT. "They've done so much for us, and I was just very disappointed to hear we were losing them.

"But I don't want to point fingers. I don't know the ins and outs of what happened or what went wrong, but something went wrong. If it didn't, we would still have ADT as a sponsor. Hopefully the tour knows what it's doing and this will work out for the best."

And if they don't?

But back to value propositions. Larry Dorman takes a look at all sectors of the golf industry and frankly, I came away less bummed out than I thought I might based on his talks with various retailers. Of course, the PGA Tour's $5 million man stayed on message...nearly verbatim to previous statements. Though this value proposition business has thrown me for a loop.

Finchem runs the organization of players that many golfers aspire to become, or at least to emulate. As such, he knows the importance of sustaining what he calls the PGA Tour’s “value proposition.” That, he said, is the formula for success that includes “the demographic of decision makers that we reach, the quality of the branding we deliver, the quality of our TV platform, the business-to-business opportunities, and our long-term relationships with our customers.”

"You're targeting an affluent crowd, a computerized crowd."

This isn't golf related, but you know how I just love to share MBAspeak at its finest.

From Dylan Hernandez in today's L.A. Times, writing about the Dodgers latest ticket promotion to bump up their attendance numbers:

Steve Shiffman, the Dodgers' vice president of ticket sales, said the method of distributing tickets wouldn't attract the kind of fans who misbehaved and prompted the cancellation of the once-popular promotion that included $2 right-field pavilion seats on Tuesday nights.

Because this promotion is Internet-based, Shiffman said, "You're targeting an affluent crowd, a computerized crowd."

Does that you make you feel good? You're reading this on a computer and therefore you are affluent!

I knew it would brighten your day.

"Just as invested in seeing her brand succeed as we are."

The Seattle Times business staff reports on Annika re-signing with Cutter and Buck, talking to Cutter's Ernie Johnson.

News this past week that the 37-year-old Sorenstam plans to retire when the season's LPGA Tour ends was not a shock to Johnson.

"We've known for sometime that starting a family was in her plans, so this didn't come as a surprise to us," he says. "We're very happy for her."

Under a multiyear contract signed in 2003, Sorenstam gets quarterly royalty checks based on sales of the Annika collection, Johnson says. In exchange, Cutter & Buck gets to use her name and image — and the exposure that goes with her appearances.

Sorenstam is "just as invested in seeing her brand succeed as we are," says Cutter & Buck spokeswoman Meghan Graves. Sales grew in double digits this past year, she says.

Isn't it touching to see a major brand putting someone else's brand above their own? Who says corporations don't have hearts?

"It is a tribute to the incredible bench strength of our executive team that we can quickly assign responsibilities when opportunities for change are created."

Wednesday was VP promotion day in Ponte Vedra. Let's see who can't ride on the same Falcon as Tim Finchem any longer. (You know, protecting that line of succession stuff should, God forbid...).

The PGA TOUR Announces Executive Appointments

April 23, 2008(Ponte Vedra Beach, FL) — The PGA TOUR announced today that Ron Cross, Executive Director of THE PLAYERS Championship, has accepted a position as Director of Corporate Affairs for Augusta National Golf Club.

Take that Cliff Roberts!

“Ron Cross has significantly impacted each of the areas he has worked in at the PGA TOUR over the past 19 years,” said Tim Finchem, PGA TOUR Commissioner. “His contributions have helped the PGA TOUR immensely. He served at a time of great momentum and growth for the tournament. We are delighted this opportunity has been presented to Ron and although we will miss his leadership role with THE PLAYERS, we wish him well in his new position with Augusta National.”

And we really hope he can get us on the course from time to time.

The PGA TOUR further announced that Henry Hughes has been appointed as Chief Executive Officer of THE PLAYERS Championship, where he will continue to report to the Office of the Commissioner.  Hughes’ responsibilities will include long-term positioning for the event, as well as chairing the search committee to select Cross’ replacement.

Boy, that sounds fun. By the way, I thought we were lower case on The and all caps on Players. Did I miss a press release?

“Henry and I have been discussing a succession plan for the PGA TOUR for some time,” said Commissioner Finchem. “With Ron Cross’ departure we saw an opportunity to execute an effective change in the management of THE PLAYERS and maintain Henry’s key position as a member of the Executive Committee.

Henry will focus on the development of a management strategy to ensure the continued growth of the event. For 25 years, Henry’s leadership and vision have made an indelible mark in every department he has led.  He is held in the highest regard by everyone in the golf industry, especially the players, the tournaments and the sponsors. His appointment as CEO indicates the significant magnitude we place on the future of THE PLAYERS and the role we have asked him to take on with the event.”

Well, I think we need to hear from Henry about how thrilled he is with this uh, C-level restructuring.

“It’s been thrilling for me to witness the significant growth and expansion of THE PLAYERS Championship over the course of my career,” said Hughes. “I look forward to providing the leadership and strategic development of the TOUR’s flagship championship.”

And now, drum roll please, who has just moved into chair No. 2 where he can dream of someday raking in the millions as Commish?

With the appointment of Hughes as CEO of THE PLAYERS, Rick George, currently serving as President of the Champions Tour and Executive Vice President Championship Management, will move into the PGA TOUR Chief of Operations position, formerly occupied by Hughes. With George’s move to the PGA TOUR, Mike Stevens has been promoted to President of the Champions Tour. David Pillsbury, currently serving as President, PGA TOUR Golf Course Properties, will expand his operational oversight leading the Championship Management team.

Two of my favorite corporatespeak specialists will have even more opportunities to humor us. All in all, a good day for the blogosphere. Especially with sports -metaphor laced gibberish like this:

“It is a tribute to the incredible bench strength of our executive team that we can quickly assign responsibilities when opportunities for change are created,” said Finchem.

Wow, that was special. Sorry, continue.

“I want to commend Rick George on the exceptional job he did elevating and growing the stature of the Champions Tour as well as the leadership he provided to Championship Management. He brings an array of talents and experience to his new role with the PGA TOUR. The work Rick and Mike Stevens have done together on the Champions Tour will result in a seamless transition. David has performed admirably as the President of Golf Course Properties, strategically repositioning the operations of the PGA TOUR’s Tournament Players Clubs and overseeing the complete renovation of the TPC Sawgrass facilities. David brings with him a creative vision, marketing and operational expertise that will propel Championship Management events to new heights.”

These appointments are effective June 1.

Got all that? 

"Our brand equity has solid footing."

Michael Garten is out as the executive director of the WGC Match Play and Greg Hansen explains the factors that led to a change.

A tepid Southern Arizona economy took a bite out of Match Play's second season. Ticket sales were off by about 8,000 from the 2007 inaugural event. That's roughly $1 million in revenue shortfall. In addition, corporate sales didn't match '07 totals. That should have been predictable and unavoidable.

Moreover, the novelty had faded. Many potential ticket buyers were scared off by reports that The Gallery Golf Club's hilly South Course was decidedly not friendly to spectators. Unlike 2007, this year's tournament was not a five-day sellout.

Some first-year sponsors, such as now-defunct First Magnus, which spent about $100,000 as a Match Play booster, didn't return. The six-figure financial involvement of home-building giant KB Home also diminished greatly. And so on.

The irony is that interest in the WGC event has skyrocketed since it moved from La Costa, Calif., where it was staged for seven years, some of them with fewer than 3,000 fans on the course. This year's TV ratings established records for the Golf Channel (the Tiger Woods factor).

"The event really found a new life in the Southern Arizona market," said Garten. "Our brand equity has solid footing. The future is promising."

I'm wondering, who actually decides when you have brand equity? Is it the brand equity fairy? The Grand Master of brand equity?

“We don’t need to grow for growth’s sake, only if it’s good for the portfolio and the brand.”

Gene Yasuda and Scott Hamilton look for an explanation about the recent TPC naming deal to the game's master of inane doublespeak (is that repetitive?), the PGA Tour's David Pillsbury:

“Every TPC we will do going forward is either built or operated with the idea that ultimately it’s going to host competitive golf on one of (our) three tours,” Pillsbury said. “That’s the core purpose of the brand.”

That's good to know what the core purpose is. 

The AT&T contract complements the Tour’s recent mission to upgrade its TPC network. According to Pillsbury, typical naming-rights deals will run for five to 10 years. The majority of the proceeds will be earmarked to improve the sponsor’s property, but some funds may be allocated to aid other facilities within the TPC network.

 Is that a nice way of saying to redo the other dogs in the network?

The Tour owns 17 TPC locations and is developing three others: San Antonio, TPC Treviso Bay in Naples, Fla., and TPC Cancun in Cancun, Mexico.

“We’re focused on growing with the right assets,” Pillsbury said. “We don’t need to grow for growth’s sake, only if it’s good for the portfolio and the brand.”

And don't forget the share price! 

Acushnet Sets Brand Records!

Golfweek's Adam Schupak reports the heartwarming news, which I know will help me sleep better tonight.

For the 12 months ended Dec. 31, Fortune’s golf business – which includes the Titleist, Cobra, FootJoy and Pinnacle brands – generated net sales of $1.41 billion, up 7 percent from $1.31 billion in 2006. Operating income dipped slightly to $165.5 million compared with $166 million the previous year.

For the fourth quarter, Fairhaven, Mass.-based Acushnet reported a 12.6 gain in net sales to $245.1 million, up from $217.6 million in the same period of 2006. It posted an operating loss of $6.7 million; Acushnet had an operating loss of $4.8 million for the fourth quarter of 2006.

Hmmm...attorney bills?

Acushnet does not provide specific financial details for each of its brands. However, Bruce Carbonari, president and chief executive officer of Fortune Brands, cited some of them in a news release about the year-end fiscal results.

Said Carbonari: “Successful innovations helped Titleist, FootJoy and Cobra achieve individual brand records, as we also attained sales records in every product category and in all major markets for the year.”

Golf ball sales increased at a high-single-digit rate, benefiting from a favorable product mix shift to the next generation Titleist Pro V1 and NXT families launched in 2007, said Craig Omtvedt, Fortune’s chief financial officer.

A favorable product mix shift...now that's a work of art.

Greetings From San Diego, Vol. 3

Wednesday was an educational day at Torrey Pines...

-I learned that if you want to see the briefest, slightly deranged stare from Commissioner Finchem, just have a cell phone go off during his press conference! Twice during his chat today it happened and both times myself and a couple of other scribblers noticed his little inner cell phone demon rearing its ugly head. You had to be watching closely, no easy feat when he's rambling on.

-I learned that by studying the third green on the South Course (pictured), one can induce nausea. Or sea sickness? Or Reesphobia? Either way, after about 10 minutes of staring at this disaster, I can only surmise that the shapers were looking at the wrong set of plans or perhaps had them upside down. The green would be fun to play to  oh, from about 150 yards off the back edge or maybe 150 to the right. And then there's that artistic front bunker...

-I learned a prime new buzzword and because I'm a kind soul, I am going to share it with you so that you too can roll your eyes. While trying to kill some time to avoid rush hour traffic, I attended a meet-and-greet with the folks from CDW, the PGA Tour's new technology partner. There, the marketing dude gave a talk about the usual stuff. You know, the general obsession with reaching the youth demo. And Ty, if you think I'm exaggerating the Tour's youth obsession again, I simply ask you this: could I make up the buzzword that was dropped?  Ready? Millennials.

From Wikipedia:

The terms Millennials and Internet generation ("iGen") are attempts to give the Gen Y cohort more independent names that are tied with key events and cultural trends that are strongly associated with the generation.

Don't you ever say this blog is not educational. 

"I look forward to helping unlock the true brand value that is embedded within MacGregor and Greg Norman Collection and to achieving their full potential.”

Look at Greg Norman, new MacGregor board member, giving the Commissioner a serious run in the corporatespeak gibberish divsion:

"The recapitalization positions MacGregor for sustained growth,” said Norman. “This is a very positive step for the company, and I look forward to helping unlock the true brand value that is embedded within MacGregor and Greg Norman Collection and to achieving their full potential.”

Cialis Jokes and Lame Bathtub Ads No More; IBM Out Too

From Sports Business Journal:

After 10 years, IBM presses ‘escape’ on PGA Tour deal

Oh wouldn't you love to know the Cialis-inspired headlines that were considered?

The company has been the tour’s “official information technology partner” for 10 years and has wide-ranging rights. It is embedded deeply enough into the sport that it may still be involved with the tour or possibly provide products or services to its successor as the tour’s technology sponsor, sources said, but it won’t return as an official sponsor.

Darn, and I was hoping this meant no more lousy IBM laptops in press rooms.

IBM provides the ShotLink real-time scoring system and the TourCast application, which provides online graphical webcasts of tour stops on PGATour.com.

Other than pricing, sources said IBM was distressed that some competitors gained access to tour equity through affiliations with local events, like EDS’ title sponsorship of the Byron Nelson Championship.

Gained access to tour equity. That's a keeper.

Hey, but at least now we all know what business EDS is in.

IBM has been a Masters sponsor for more than 20 years, and with its official PGA Tour status winding down, it is looking at more tournament affiliations. However, the tour is asking its tournaments not to do any exclusive deals with IBM in deference to any future sponsorship it may cut with a technology partner. An e-mail this month from PGA Tour CMO Tom Wade to tournament directors, obtained by SportsBusiness Journal, stated, “A continued relationship with IBM beyond 2007 is uncertain.” It went on to say the tour is in discussions with “a few different technology partners” who would “invest significantly with many of our tournaments.” Wade asks event directors to contact the tour before granting IBM official or exclusive rights.

Fun times.

Meanwhile, Cialis will not renew its official marketing partnership with the tour. Eli Lilly signed the four-year deal late in 2003 as it prepared to go to market with the erectile dysfunction drug.

But their ad looked so good on the scoreboards. And think of all the fathers who will be deprived of the privilege of explaining Cialis to their sons and daughters.

The Latest Golf MBAspeak Guide

My August Golfdom column was devoted to refining your use of key buzzwords.

Re-branding The Re-branders

Sounds like a bad horror film, eh? Actually, it's just that wonderful world of advertising.

FOR IMMEDIATE RELEASE
August 27, 2007

PGA TOUR Helps Celebrate Ad Agency’s Rebranding

Commissioner Tim Finchem joins GSD&M’s announcement to become GSD&M’s Idea City and outlines new assignment

Fix the FedEx Cup?

AUSTIN, TX – The agency that helped develop the PGA TOUR’s two highest-profile advertising campaigns – These Guys Are Good and A New Era in Golf – has undergone a major re-branding campaign of its own.

In a celebration held today at its Austin headquarters that was attended by PGA TOUR Commissioner Tim Finchem, GSD&M Founder and President Roy Spence unveiled the agency’s new name: GSD&M’s Idea City.

“GSD&M’s Idea City preserves GSD&M’s core values and purpose while stimulating and accelerating progress and innovation in all that we do,” Spence said.  “GSD&M’s Idea City is a destination for visionary ideas that make a difference for our people, our clients, our country and the world.”

GSD&M's Idea City just rolls off the tongue, don't you think? Now I think I'm getting a better understanding of why these branding campaigns are so, uh, incredible.

Commissioner, since you burned up some private jet fuel to be here, would you like to add something?

“On behalf of the PGA TOUR, I would like to extend my sincere congratulations to one of the great branding agencies on the rebranding of itself to GSD&M’s Idea City,” Finchem said. “It’s very appropriate. Roy is one of the most creative people I know, and he has built a terrific team
that has done some outstanding work on behalf of the TOUR.”

Finchem indicated the TOUR’s involvement with GSD&M’s Idea City will grow moving forward.

“Not only will we continue our storied relationship but we look forward to expanding our association with GSD&M’s Idea City,” Finchem said.

Storied?

“This includes engaging their strategic expertise on activating, integrating and growing the charitable focus for our three Tours and our tournaments.”

Lots of ing'ing going on down there in Austin.

In addition to the PGA TOUR, the agency has helped create some of the most memorable ad campaigns for leading brands such as AT&T, BMW, NCL and the United States Air Force.

The TOUR and the agency have been partners since 1990. Together, they first introduced the award-winning These Guys Are Good ad campaign in 1997. It remains major pro sports’ longest-running ad campaign.

And they have Casey Martin to thank for it! 

“When you’re embedded in the event, you’re TiVo proof"

Claudia Deutsch of the New York Times looks at the FedEx Cup ad campaign and serves up a nice warning for New York businessmen prone to rolling their eyes. Or maybe people eat this stuff up? That wouldn't surprise me either.

If you are south of Greenwich Street in Manhattan between noon and 5 p.m. today, look for a weird miniparade: A guy carrying a “quiet” sign followed by a golfer, his caddy and an entourage of nattily dressed “fans.”

Don’t think it’s another bunch of aging hippies commemorating the 30th anniversary of the Summer of Love. The stunt is part of the endgame in a long and expensive campaign by FedEx to drum up frenzy over the FedEx Cup golf playoffs that start at the Westchester Country Club tomorrow.

Just think of the poor struggling actors who have to play these parts out...in public. Then again, people are paid to perform Cats, so anything is possible.

 But now, the race to the pin begins. FedEx has set up a 12-story, three-dimensional billboard of a golf hole on a building on Greenwich Street, the starting point for today’s golfer’s walk. It has cloaked its delivery trucks in a green plastic wrap that simulates grass and that advertises the FedEx Cup.

It is peppering telephone kiosks, Pennsylvania and Grand Central stations, and the Port Authority Bus Terminal with what it calls guerrilla stickers — messages suggesting excuses for skipping work from Aug. 23 through Sept. 16, the duration of the event. (“The dry cleaners lost all of my shirts.” “The copier is jammed.” “I am downloading a file on dial-up.”)

The hoopla will be replicated in Atlanta, where the finals will be held: another staged miniparade will go through the business district there; guerrilla stickers will decorate the airport, train and bus stations; and rapid-transit commuters will be treated to cheeky observations like “most golfers will have played in the rain longer than it takes you to commute to and from work.”

Many of the commercials that FedEx will run during the tournament will continue to promote the cup, but others will promote services like printing (remember that FedEx now owns Kinko’s), shipping and supply chain management. Since most people watch sports in real time, “when you’re embedded in the event, you’re TiVo proof,” said T. Michael Glenn, executive vice president for market development at FedEx.

Oh but you haven't seen me TiVo through a telecast before. 

And golf, marketing experts say, is likely to establish an equally strong track record as an executive sport.

“Golf is one of the fastest growing sports, both for watching and playing,” said Michael Watras, president of the brand consultancy Straightline International.

And who apparently just came out of a 5 year coma. 

Younger people, he suspects, embrace golf by choice; aging boomers turn to it by necessity.

“With tennis, your knees give out,” he said. “But with golf, you walk, you swing, you walk again. You can do that for a long time.”

Or take a cart.