The Economic hazard: why Tim Finchem and PGA Tour are in big trouble
Now that all the hoopla about Tiger Woods’s return has died down, it’s time for the golf world to take a reality check. The PGA Tour is in trouble, big trouble.
Here’s why: Sponsorships for nearly half (20) of the PGA tournaments are expiring in 2010. U.S. Bank and FBR have both announced they will stop sponsoring. Another bank, Northern Trust, received flak from Congress for hosting a golf tournament while receiving bailout money. By my count, at least 8 other tournaments are sponsored by entities from the banking, financial, or insurance sectors–areas hit really hard by the economic downturn. 5 are sponsored by car manufacturers (including 2 by Buick), another sector in dire economic straits. Mercedes has already announced that it may stop its sponsorship of the season’s first tournament.
According to USAToday, “Tour officials are pursuing new sponsorship deals with companies in the energy, retail and environmental industries to try to make up for a potential exodus of sponsors.” Even Tiger Woods is worried, saying: “The Tour is obviously feeling it, just like any other part of the business world. I think it is very important for all of us to understand how important the sponsors are to our sport. … We may be losing a few tournaments, and a lot of tournaments are coming up on their contract years. This is a very important year.”
Meanwhile, PGA Commissioner reportedly gets paid between $4 to 5 million per year. Yet it was his lame-brained idea for the failed FedEx Cup playoff system that has leveraged golf with $10 million escrow payouts each to Tiger Woods and Vijay Singh. It was also under Finchem’s tenure that the PGA Tour expanded beyond reason to run from January to October and even November. That expansion, however, was not appealing to Tiger Woods, who has, quite sensibly, skipped events in order to spend time with his family and to otherwise stay fresh. For those unlucky tournaments that Tiger skips (or misses due to injury), the TV ratings are usually down 40-50%, and attendance goes down as well.
In other words, the PGA Tour is a one-trick pony (or tiger). Its fortunes ride on the shoulders of Tiger Woods. Yet the expansion of the golf season, creation of the gimmicky FedEx Cup playoff system, and bloated salary of the Commissioner and other excesses of the PGA Tour have all been poor choices. They have left the PGA Tour in a precarious financial position right now. The prudent thing for Tim Finchem and the PGA Tour to do would be to contract the season: concentrate on fewer tournaments with fewer sponsors, but nearly all of which feature Tiger Woods. (The NFL does a great job for football, in a short season that culminates in the Super Bowl, one of the most watched events of the year.) The shortened golf tournament schedule should start in March, not January. The lame-brained FedEx Cup playoff should be scrapped, while more money should be thrown into the 4 majors. The PGA Commissioner should take a pay cut. The price of admission (and bottled water) at PGA events should be lowered. And then the PGA Tour should hope and pray that Tiger Woods keeps winning for the next 5 to 10 years.
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