- The Washington Times - Monday, May 21, 2001

Special Report

Tiger Woods has become the sports worlds ultimate rainmaker.Not only has the 25-year-old phenom galvanized golf fans with his record-breaking performances on the course, the games pied piper has prompted corporate Americas platinum echelon to join the PGA Tour parade, almost single-handedly leading golf into an unparalleled economic golden age.
In the Woods era, now in its fifth year, purses on the PGA Tour have nearly tripled. Sponsorships that primarily fund those purses have more than doubled. In 1996, only nine players earned $1 million in purse money. Last year, a whopping 45 players became millionaires without answering a single question from Regis Philbin.
TV ratings for two of the sports four major championships also doubled, and nearly every other tournament involving Mr. Woods has posted a record high. His influence is felt even in the tournaments he bypasses, including the 34th annual Kemper Insurance Open, which begins Thursday in Potomac.
And the rocket ride isnt over. This summer, the tour is expected to announce a four-year network TV deal, probably worth between $900 million and $1 billion. The sum will eclipse the current $650 million package by at least 40 percent, ultimately fueling even higher purses and sponsorship fees.
"There are two sports entities right now on a clear, upward trajectory: NASCAR and the PGA Tour," said Mike Trager, president of SFX Sports Group Television. "And NASCAR doesnt have Tiger Woods."
The new TV deal will cement golfs status as a bona fide big-time sport. But it also could price some major sponsors out of the market. Title sponsorships for key tournaments already have risen by more than 50 percent in anticipation of the TV jackpot, leaving the tours long-term growth in question.
"There is some concern golf is getting maxed out," Mr. Trager said. "Theres been just such phenomenal growth in the ratings, in the sponsorships, in the overall profile of the game. You balance that against all the fragmentation elsewhere in sports, and you sometimes have to wonder, 'Is this as good as it gets?"
When Mr. Woods turned pro in August 1996, he provoked an undercurrent of resentment among his tour brethren. The "Hello World" ads heralding his professional arrival struck even the most flamboyant players as shamelessly presumptuous. And that Nike made him a $40 million man before he had taken a swing as a pro galled the games bluer-collar veterans.
But less than five years later, after 27 tour victories and the most rousing run in major championship history, Tiger Woods has achieved almost reverential status on tour. His fellow pros universally marvel at his epic accomplishments as a player. And most also pay homage to his impact as the games economic engine.
"Every day when I wake up I thank God for Tiger because hes made us all rich," said 22-year tour veteran Scott Hoch, only half-joking, at last months Greater Greensboro Classic. "I think anybody out here who begrudges Tiger anything is crazy. Look at what hes done for golf."
Consider what Mr. Woods has done for the games rank and filers. In 1996, before the Woods-driven boom in purse increases, the last player on the tours money list to retain his playing card for the following season (No. 125) made $167,852. Last year, Bob Burns finished 125th on the money list and banked $391,075.
In fact, Mr. Woods explosion has been such a boon to the games unheralded grinders that talk of a players union virtually vanished. Just several years ago, the circuits low-end performers were strapped enough financially to worry about where the Tour spent every penny it earned.
Tour Commissioner Tim Finchem and his staff made significant changes since the union issue made its most threatening advances during the 1998 season: The tour changed accounting firms, made its books more accessible and increased player input in day-to-day operations. But none of those moves has done as much to quash union chatter as the tours enormous purse escalates.
Quite simply, the rich rarely revolt.
"What players union? Its been months since Ive heard a word about that," veteran Billy Andrade said recently. "Im sure one of the reasons is that things are so good out here right now. You know, were spoiled. Theres so much money thats being made and so much money going into our retirement plans that its ridiculous how well the tour is looking out for each player."

TV balancing act

As nearly everyone on the tour enjoys the romp of popularity, Mr. Finchem is hard at work hammering out the next TV contract. At once, the commissioner must delicately balance four pressing issues:
First, he must find a way to score a significant increase in the rights fees while the advertising market suffers through a deep slump. Not only will higher TV revenues help boost tournament purses, which in turn draw better players, but Mr. Finchem also knows his sport will be judged by how well it performs at the bargaining table.
The National Football League doubled its previous TV deal in 1998 and remains the 800-pound gorilla in pro sports. Major League Baseball, conversely, tried and failed to triple and then double its network TV deal last year. It ultimately settled for a more modest 44 percent increase with Fox and now must fight its image as a troubled sport.
Second, Mr. Finchem must make NBC, ABC and CBS and all the key sponsors happy in the process. CBS currently airs the majority of the games prominent tournaments, including the Masters and PGA Championship, and more with Mr. Woods than anyone else. To help justify the higher rights fees, each network will fight to air more tournaments with Mr. Woods. Mr. Finchem, as a result, inherits the unenviable task of equitably splitting those tournaments without knowing for certain Mr. Woods schedule.
"Some tournament sponsors, and perhaps even the networks, are going to seek out some guarantees from Tiger to play certain tournaments at least once every three years," said John Von Stade, managing director of Millsport Golf, which brokers sponsorships on the tour. "Theyll ask, but theres no way to deliver that, certainly not years in advance."
Third, Mr. Finchem must make Mr. Woods happy. The superstar ignited a firestorm in early November when he said in "a perfect world" he would receive a guaranteed cut of the new TV money. After all, the singular and historic effect he has on ratings is well documented.
Mr. Woods comment fueled a months worth of heated debate and criticism among players and media alike on whether he should receive a concession unprecedented in pro sports. And both he and Mr. Finchem suffered in the court of public opinion. Mr. Woods came off like a prima donna, Mr. Finchem like an unresponsive dolt who failed to address the concerns of his meal ticket.
The talk of a cut for Mr. Woods soon cooled after a late-November summit in which he finally vented his frustrations — which primarily stemmed from unchecked use of his likeness in advertising — to Mr. Finchem in a private, face-to-face meeting.

Widening the audience

Despite Mr. Woods improved demeanor after the detente, he did make a grinning reference to starting an "Antarctic Tour" less than two hours later.
"[Giving a cut to Mr. Woods] would have been like saying five years ago that Michael Jordan should get a cut of the NBAs TV contract," said Mark OMeara, Mr. Woods closest friend on the tour. "At the time Michael Jordan was unquestionably the most recognizable athlete in the world — he was the superstar.
"Tiger right now is probably in the same position. Its good for all of us. Its good for the game. And anytime you experience growth, youre going to experience growing pains. And thats kind of what the tour has dealt with of late."
Fourth, Mr. Finchem and the networks must collectively devise ways to bring the tour to more people, particularly sports fans not ordinarily attracted to golf. As good as things are now for the tour, theres no long-term guarantee Mr. Woods and his challengers will continue to generate record ratings, particularly when nearly all other televised sports are fighting significant drops in audience size.
There is talk of airing some West Coast tournaments in prime time, as well as giving golfs traditional hush-toned production a more modern, high-energy feel. Mr. Finchem also wants to complement Mr. Woods immense appeal by promoting some of the games other leaders as mainstream stars.
"In our next television agreements, well be looking to improve the positioning of the PGA Tour on television with better packaging and promotion of our players and events," Mr. Finchem said in the tours recently released annual report.
For now, Mr. Finchem and the networks are keeping a low profile on the status of the talks. But they are being given NFL-level importance.
"Obviously, the tour is a very big part of what we have," NBC spokesman Kevin Sullivan said. "The ratings are good, and early indications [of a new deal] are positive. This is definitely a front-burner priority for us."

Sponsor concerns

The new TV deal will not take effect until 2003, but more than 18 months before that Xerox Inc. already has made its decision. It will not renew its presenting sponsorship of the Phoenix Open, a popular early season tournament that often features Mr. Woods. The simple reason: money. The asking price to stay on as presenting sponsor beyond next year jumped from $3.1 million a year to $6 million.
"The percentage increases [in fees] as a result of the TV deal are simply beyond what we could support," said Carl Langsenkamp, Xerox spokesman.
Xerox is just one of several Fortune 500 heavyweights fretting over whether they can afford to stay involved with the tour as the economy continues to waver. When corporate profits began to dwindle nationwide last year, marketing budgets were among the first items to be slashed.
"Theres no doubt that there is concern about the increases in sponsorship fees," Millsport Golfs Mr. Von Stade said. "The situation in the economy is well documented. Were looking at a situation where the average tournament title sponsorship is going to move from about $4 million to $6 million in the new TV deal. Top-end tournaments will fetch $8 million and up. It comes to a question of whether a company can justify these types of increases.
"If Woods wins even two more majors this year, it sets up a potentially scary situation in which a lot of big companies could be priced right out," he said.
To counter such a situation, the tour is working to follow NASCARs sponsorship blueprint of the 1990s. The auto racing circuit fueled its mammoth rise in popularity by extending beyond its support base of auto-parts companies and oil refiners to consumer product giants like Proctor & Gamble, General Mills and Mars Corp.
Automakers, telecommunications companies and golf equipment makers still form the core of the tours corporate support. But their grip is slipping and, players say, with potentially disastrous consequences. The Woods effect neither added new players to the game nor boosted club sales. Both have been stagnant since the huge jump that followed his 1997 Masters triumph.
"Even though the ratings are up and more people are watching golf, the actual game isnt necessarily growing that much," Mr. OMeara said. "What I mean by that is that manufacturers arent necessarily selling more equipment. And a lot of the new fans that are tuning in, a lot of them dont actually go buy golf products. So, in other words, what were seeing is a new breed of golf fans who might watch more golf because of Tiger, but they arent necessarily a golf consumer."


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