“They could lose $5 million forever and it wouldn’t matter"

usga.jpgAdam Schupak authors the lead piece in Golfweek's USGA package. Several items stand out in his look at the USGA's new business model.

It signed its first two partners – American Express and Lexus – and expects to finalize two more deals shortly. But the USGA is proceeding cautiously to ensure its commercial ventures don’t undermine the integrity of its tournaments and mission.

Industry observers describe the changes under way as part of an inevitable evolution. Sports and sponsorship, they say, go together like red meat and red wine.

“If the pope hires IMG to be his marketing guy, the USGA can certainly get in the modern era,” says Mark Mulvoy, former managing editor of Sports Illustrated and a member of the USGA’s Communications Committee from 2000 to 2006. “It’s late coming to the table. Now it’s a question of what do you have first, the shrimp or the salad?”

Shrimp or salad? Ask the Pope! Because you know, he's always right.

For many years, the USGA’s goal was to grow reserves equivalent to one year’s operating expenses in the event of some unforeseen occurrence, what Fay termed the proverbial “rainy day.’’ The USGA has far exceeded that numerical target.  

“They could lose $5 million forever and it wouldn’t matter,” says Frank Hannigan, a USGA staff member from 1961 to 1989 and executive director the final eight years of his tenure.

While that may be true, the USGA develops its multiyear budget under the premise it will not count on its reserves to cover operating losses. Says Fay: “Use of the ‘endowment’ will only be used for material special projects.”

Hmmm..define special projects...

Fay contends it would be “borderline reckless” for the USGA not to consider other revenue sources that fit within “what we think the USGA is.” So in 2006, the Executive Committee hired McKinsey & Co., a management consulting firm, to look at the USGA’s business model. How much of its blueprint the USGA is following is unclear.

“Sometimes the best thing they do is confirm what you were thinking of doing all along,” Fay says.

So, we have Walter Driver saying that the consultants are the ones to blame for the staff benefit cuts that have ripped the hearts out of the staff, and we have David Fay saying it's good to have someone confirm what you were thinking of doing all along. Hmmm...who to believe?

Thirty years later, the theme of the USGA’s commercialization has surfaced again. It is considered the principal reason why Campbell has withdrawn from what was such a big part of his life.

“Imagine driving Bill Campbell away,” Hannigan says. “That says it all.”

Campbell politely declines to speak of his case of déjà vu, except to say that the beauty of the USGA’s structure is that every two years the leadership of the Executive Committee changes. “You just have to wait long enough,” he says.

There's a ringing endorsement for Walter.

But by then it may be too late.

“We’re beyond the crossroad,” Bevacqua, the chief business officer, says. “Crossroads necessarily means there is some wavering and decisions to be made in which direction you want to head in, and we’ve made it. And we’re all going down the same road.

“My goal is that people will look back five to 10 years at this time and say, ‘That was really a time of transformation. They became modern without losing their identity. They did it in a tasteful way. They never lost their core mission, yet they became a 21st-century organization that is healthy and set up to survive well into the future.’"

You won't survive if you don't stick up for the game, fellas.