Friday, February 22, 2008

USGA is "Beyond the Crossroad"

Golfweek busted out a special report in this week's issue (also found online) about the USGA in light of the looming exit of Walter Driver and the incoming presidency of Jim Vernon. Adam Schupak wrote the lead story of the coverage and it's well worth reading beyond my snipping of it. But, I will still do the customary hack job to highlight some points.

First, I think Schupak quickly identifies the source of my and many people's gripe with the USGA - particularly relating to sponsorship, but also beyond that:

[M]any golf purists bemoan, “What’s next?” A car floating in a lake surrounding a par 3? Could selling the naming rights to the U.S. Open, the association’s crown jewel, be far behind?

As farfetched as those scenarios may seem, they touch on a theme the USGA has wrestled with forever. In the world of sports, the USGA and its championships long have been perceived as one of the last bastions of anti-commercialism.
The thought leads nicely into a description of the work done by Peter Bevacqua - hired by Driver to be the Chief Business Officer for the USGA. It mentions some of the work that Bevacqua has had a hand in making happen: ecommerce efforts (what?!), corporate partnerships/sellouts (two on board, two more coming in RBS Financial and IBM), and other way to "diversify revenue streams." Vomit.

To be fair, my Vantage Point - out in theaters today - is not the only one. Many in the industry actually think this is somehow progress.
“If the pope hires IMG to be his marketing guy, the USGA can certainly get in the modern era,” says Mark Mulvoy, former managing editor of Sports Illustrated and a member of the USGA’s Communications Committee from 2000 to 2006. “It’s late coming to the table. Now it’s a question of what do you have first, the shrimp or the salad?”
Consider that the USGA has revenues that reach the $300 million dollar mark annually as is, and it leads a critic to wonder why the USGA needs more money. It is difficult to see the need for additional cash to govern the game. Especially considering that in my conversations with former USGA Executive Director Frank Hannigan, Hannigan mentioned that the real reason behind the huge cash reserve and annual revenue level seen today is largely due to the very lucrative USGA/NBC Sports deal.

But, apparently the Open has become more costly to make happen.

In 2007, championships and team matches, including broadcast rights, generated more than $100 million in revenue for the first time. Expenses, however, have increased too, doubling in the past 10 years from $67 million to $135 million. In 2006, the USGA had a net operating loss of $6.1 million, its first since 2000. It returned to the black in 2007, earning net operating income of $1.1 million.
Bevacqua attributes the ranging figures due to the venues themselves.
An Open at Winged Foot (2006) or Merion (2013) will not be as profitable as when it’s played at Torrey Pines or Pinehurst (2014), where the sites enable more ticket sales and corporate tents.
The piece then goes on to quote Bevacqua concerning where things are today and where he sees things going:

“We’re beyond the crossroad,” Bevacqua, the chief business officer, says. “Crossroads necessarily means there is some wavering and decisions to be made in which direction you want to head in, and we’ve made it. And we’re all going down the same road.

“My goal is that people will look back five to 10 years at this time and say, ‘That was really a time of transformation. They became modern without losing their identity. They did it in a tasteful way. They never lost their core mission, yet they became a 21st-century organization that is healthy and set up to survive well into the future.’ ”
If you've read anything I've ever written about the USGA, you know that I'm staunchly against commercialization of the organization. Even in the face of increasing costs, the USGA should not be looking to become a bastion of corporate America. After all, ticket costs for the US Open have increased in kind over the years. The USGA has a membership base to pull from for donations. The organization has a reserve that would allow them to cover operating losses almost in perpetuity. In other words, I don't think that the USGA needs money - especially if we are worried about promoting championships.

I never really detail at length my reasons against the selling out of the USGA, though. Let me spell it out. The USGA is one of two governing bodies for the game of golf. They set the rules for the game. They operate national championships that are above the fray of the very corporate PGA Tour. They promote amateur golf, more intelligent agronomy, and conduct research to make sure that technology is not killing the game (I can make a shot here, but I won't because the organization does try very hard).

A governing body is supposed to be above the fray. Could you imagine - and you probably could - if the federal government sold out the naming rights to the Supreme Court building? How about the UBS Supreme Court of the United States of America session presented by Coca-Cola? Ridiculous, yes. Extreme, sure. But the idea is that the body that governs a sport should not be in the busy of making money - much less a profit.

The E-links newsletter is preposterous because it is asking people who play the game to allow the USGA to make advertisement dollars at their expense. In actuality, the USGA should only be soliciting money from people who directly want to give to the cause of the organization OR attend its championships.

The sponsorship with American Express has always reminded me of AmEx's own slogan about enjoying the benefits of membership. People used to join the USGA because they love golf and want to support the organization's programs. Now the USGA is teaming with other organizations - AmEx, RBS probably, etc - to make membership mean more than just loving the game. Why spend so much time on that when that is clearly not the mission of the USGA? Why waste time on getting more members when apparently that stream is not that crucial anymore AND the number of people playing the game is declining?

My frustration stems from the corporate answers that come from people who volunteer to work for the good of the game. Corporate answers never are answers. They are doublespeak or vagaries that leave the average person frustrated. That doublespeak is emblematic of Walter Driver - the outgoing President. I will touch on the interviews that Golfweek conducted with Driver and Vernon in another post, but I think this Driver quote is very telling about both the arrogance and somewhat lack of direction in the corporatization of the USGA.
Driver, too, acknowledges the perceived heavy-handedness on his part and by the Executive Committee but offers no apologies.

“We developed a bias towards action rather than a preference for smoothness,” he says.
Nothing about being right or doing the right thing for the good of the game - just acting. Sooner or later, it will have to be time to judge the results of acting.

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