Rapidly vanishing lines of credit are not only taking their toll on inflated asset prices and the global financial markets in general, but also in the willingness of companies to not only underwrite sporting events, but also to market their brands through athletes. During financial stress, marketing budgets are historically one of the first to get slashed, and this current slowdown is no exception. One of the sports which will be hit the hardest in the coming months and year(s) will be golf. Sports Business Journal (SBJ) reported several weeks ago, for instance, that “golf is unusually dependent on revenue from the financial category, with about 25 percent of network ad time coming from that area. Plus, nearly one-third of all events sanctioned by the PGA Tour are sponsored by banks, investment firms, credit card distributors or financial consultancies, putting golf at the biggest risk from the crisis.”
From a player agent’s perspective, this crisis will be most visible in terms of endorsements. SBJ’s latest piece on the matter, ”Golf endorsements pinched by economy,” highlights the dour sentiments of several of the game’s most prominent player managers:
Andrew Witlieb of Goal Marketing (Jim Furyk): “I’ve been doing this for 15 or 16 years, and this is the worst year yet. You look next year: you’ll see the fewest new deals you’ll ever see.”
Mac Barnhardt of Crown Sports Management (Davis Love III, Boo Weekley): “Dollars are coming down a little bit. I think you’re going to have to get more regional and more creative (with prospective endorsement deals). I think it’s going to get tough.”
John Mascatello of SFX Golf (John Daly): “Getting the long-term commitments will be tricky, because there is some instability right now.”
Andrew “Chubby” Chandler of ISM (Lee Westwood) : “The knock-on affect of American banks is hitting everywhere.”
Chandler’s quote, which is part of a sit-down of sorts that can be seen on video at CNN, makes the point as well that the “global” slowdown has had a seemingly less drastic effect on Middle Eastern and Asian economies.
This is one reason why many U.S. players are allegedly thinking about “jumping ship,” so to speak, over to the European Tour next year, at least in a limited capacity, in an effort to diversify the reach of their brand, as well as to play courses with a more player (and fan?) friendly setup (i.e. less penal rough).
Among those committed to more events overseas include Vijay Singh and Robert Allenby of IMG, although rumor has it that Phil Mickelson (repped by Steve Loy, President of Gaylord Sports) is seriously mulling the prospect over, as is Camilo Villegas, who shares an agent at IMG with Sergio Garcia.
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3 months ago
Very interesting article, Darren.
Luckily I believe that most of the PGA Tour's sponsorship deals are through the 2010 season, obviously those sponsorship deals are broken when a bank/financial institution goes out of business though.
Player endoresements will likely go down in the coming year because many financial institutions barely have enough money to stay in business let alone have an extra $10 million to throw at Phil Mickelson.
I am not sure if playing more European PGA Tour events will do them much good. Possibly it could open players up to a larger group of potential sponsors/endorsements but the European markets are very relient on the US economy and they are likely going to go into a deeper and longer recession than we are over here.
The PGA Tour should be ok for the next year or so because most of their sponsorship deals are locked up but players could see some of their sponsorship and endorsement offers reduced for at least the next year - maybe they will have to actually play in more tournaments to earn some more money on the course. lol.
Nice work with the article, very interesting info.
2 months ago
Nice article.
I'm not sure the average viewer is going to be affected by this. We might lose a few of the lesser know tournaments, that's it.
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