“Golf's Credit Crunch” Causing Agents to Lose Cash, Sleep

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.

For that matter, expect to see the latest IMG acquisition, Anthony Kim, explore more options internationally.

“You’d be stupid not to join [the European tour],” said Allenby. “Some tournaments over [in the U.S.] get a bit monotonous, with the thick rough. I miss the fairway by two feet and I’m screwed. My body hasn’t been handling it very well, particularly my tennis elbow. The other thing is to freshen my mind up.”

Moreover, The Guardian’s Lawrence Donnegan opined that the U.S.-based credit crunch may also play a role in players’ scheduling:

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“With the credit crunch affecting many American financial institutions, the long-term prospects for sponsorship of golf in the US are gloomy, in stark contrast to the opportunities enjoyed by the European tour. The latter has a long tradition of staging events in the Middle East and Asia, where next year will see the start of the European tour’s “Road to Dubai” series which culminates in an end-of-season tournament in the Emirates where the players will be competing for a $20m prize fund, the biggest in the history of the game.”

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