PGA: Getting Through The Economic Crisis

We all know that we are in the midst of an economic crisis of colossal proportions.

Every aspect of the business world will, in one way or another, be detrimentally affected by this deep recession and professional sports are—after all—a business.

Perhaps no sport has the potential to be as severally affected by this recession as the PGA Tour.

Nearly half of the PGA Tour’s title sponsors are from either the auto or financial services industries; two industries that will be hit substantially harder than any others by this deep recession.

For at least the time being, the PGA Tour is on steady footing as all their title sponsorship and television contracts are locked up through the 2010 season.

However, the most optimistic predictions have us beginning to show the first signs of recovery sometime in late 2009, with the most dire of predictions indicating that this recession could last for several years and get a lot worse before it starts to get better.

Whether we start climbing out of this recession in nine months or three years, it will likely be irrelevant for the PGA Tour, as the damage done to the financial and auto industries will be so severe that the affects will continue to loon several years after this recession is technically over.

So, what does this mean for the PGA Tour?

Well, it means that Commissioner Tim Finchem and his team will be on a road show for the next two years, desperately trying to find replacement sponsors for all the financial and auto companies that are more than likely going to terminate their sponsorship deals after 2010.

Finchem’s task of finding new title sponsors for the 2011 season and beyond can be compared to me climbing Mt. Everest wearing nothing but shorts and a T-shirt.

The major problem that Finchem and his team will face during their attempt to lock down a slew of new sponsors is that it has become common knowledge the Woods, Mickelson, and many of the world’s top players simply do not play in many PGA Tour events anymore.

Any potential sponsor with half a brain will also know that when Woods, Mickelson, Kim, Villegas, and so on are not there, fans don’t show up, and people do not watch the event on television. This renders their sponsorship virtually worthless.

Also, as much as we like to think that corporate CEOs have the best interest of the company in mind when making any large sponsorship decisions, in reality they are just as interested in rubbing shoulders with Woods, Mickelson, Els, and company as they are in whether or not the PGA Tour is a good fit for the company.

Plain and simple, no Woods, Mickelson, or Els is a deal breaker for most corporate CEOs.

So, what is to be done?

Before the start of the 2009 season, Tim Finchem sent each and every player, as well as their agents, a video appealing for their help during this tough economic climate by attending more events.

This was an unprecedented move by Finchem and one that clearly demonstrates the magnitude of the situation he feels the PGA Tour is currently facing.

So far, Finchem’s appeal seems to have fallen upon deaf ears as four out of the world's top-five players have yet to attend a PGA Tour event in 2009.

Golf is an individual sport where each individual player controls his own fate, including how much money they earn each year.  

The other issue is that with the significant growth in the PGA Tour’s popularity over the past decade, there have also come lucrative sponsorship deals, to the point where most of the world’s top players are making a lot more money off the course than they are through their PGA Tour earnings.

Forbes estimated that Tiger Woods earned $111 million in 2007, only just over $12 million of which came from his PGA Tour earnings.

Mickelson earned an estimated $65 million in 2007, of which only about 12 percent came from his PGA Tour earnings.

Other than a genuine interest in the future of the PGA Tour, what is possibly going to make the likes of Woods and Mickelson leave the comfort of their cozy mansions to play in more PGA Tour events when they are making eight times as much off the course?

The answer is nothing—well, almost nothing.

There is always the option of the PGA Tour implementing a rule that has been almost taboo to even hint at, let alone speak of.

That rule being players are required by the PGA Tour to attend more events and, even better yet, a rule that requires them to play in every event at least once every three years.

A requirement like this would still allow players to take many weeks off during the season, they would just need to schedule appearances at different tournaments each year.

It is probably safe to say that this thought has run through Finchem’s head at one time or another but he has so far been too intelligent to transfer that thought into actual words or actions.

The players would mount a colossal revolt and the PGA Tour would never think of even discussing such a rule for that very reason.

However, the implementation of a rule that requires players to attend each tournament at least once every three years could be an extremely attractive selling point that just might be the deal maker in locking up new title sponsors for the 2011 season and beyond.

That CEO that wouldn’t even discuss a PGA Tour sponsorship because the likes of Woods, and Mickelson never show up to that particular event, will probably sit up and take notice if he realizes that he will indeed be able to rub shoulders with Tiger Woods and Phil Mickelson at least once over the next three years.

A rule like this will also allow title sponsors to justify their expensive PGA Tour sponsorships because Woods, Mickelson, and others will have to be present thus the crowds and television ratings will be sure to follow.

It is highly unlikely that a rule like this will ever be put into place.

However, desperate times call for desperate measures and a measure like this will without question lend a very large helping hand in locking up new sponsors for 2011 and beyond.