A New World Order For Golf?
IN: News | by Grant Dodd | 01 Feb 2008
If you are a stock market observer at present then you will likely be either intrigued or extremely nervous. The latter condition applies to those who have taken a ‘long’, or optimistic view of the stock exchange’s future performance at a time of chronic instability in world markets.
At the core of this instability is concern over the state of the U.S. economy, the worlds’s biggest and most influential. A major housing downturn, caused by the collapse of the dodgy ‘sub-prime’ mortgage lending scheme has fed into Wall St, where the stock exchange is being battered from pillar to post by massive write down announcements from most of America’s leading financial institutions.
There is still a long way to go before it finds a stable base. The bulls (optimists) of the last decade or so are in retreat. In their place reside an increasing number of bears (pessimists), who see a period of negative performance on the horizon.
One business who will be intently watching this matter play out is the USPGA Tour. The PGA Tour’s impressive rise of the past ten years has been tied to the bubbling health of the corporate community in America, a community that saw great advantage in being associated with a sport that was identified with the world’s most iconic sporting figure, Tiger Woods.
The Woods era has seen massive purse growth on the PGA Tour, funded both through increased sponsorship fees and contract revenue from television rights. With the average weekly purse around $5 million, the PGA Tour is the envy of sporting organisations around the globe, a model of prosperity and marketing brilliance.
However, storm clouds are on the horizon. Big ones. One of the first things that business’s do in hard times is to trim the fat out of their costs. History shows that advertising and sponsorship based spending are usually high on the agenda. If corporate America is feeling the pinch then there is little doubt that one of their greatest beneficiaries, the PGA Tour, will get squeezed as well.
The financial crisis also comes at a poor time for golf in relation to its presence in the ordered hierarchy of elite sports. Golf ratings on TV have been quite dire. Its value as a TV property (despite an attraction to the sought after, moneyed, AB demographic) has fallen in proportion to the noticeable decrease in viewers. Now is not a good time to be seen as a sport ‘on the nose’. Golf is still some way from ever reaching such a state, but the extreme cost of sponsoring and broadcasting the game may eventually become a key factor for frazzled executives weighing up the issue of potential return.
The biggest storm cloud for the PGA Tour though is brewing way over on the other side of the world, in Asia. Whilst the US economy looks like it is on the slide, the same cannot be said for most of an emergent Asia. China, India and Korea are just three countries undergoing massive transformation and growth. The developed world is busy seeking out ways to get a piece of the action, and it is hardly a surprise to see that great change is already happening there in relation to golf.
An acquisitive European Tour has been operating in Asia for many years, staking out a claim ahead of its time. A re-emergent Asian Tour has also built a niche for itself, with much of their expansion tied to joint sanctioned events with Europe. Now, another organisation is preparing to launch, one which will hold great interest for Australians and for the future of the Australasian Tour.
The body, loosely and unofficially titled “One Asia”, is set to become a major force in world golf. The possible union of a number of countries and golfing bodies (including Korea, India and Australia) into one entity, operating in a growing market with money to spend has the potential to alter the status quo of the golfing world.
This fact will not be lost on America. As yet however, they have shown no intention of attempting to insure a presence in the Asian market. Eventually,such a move may well be dictated by a future trend of major sponsors channeling their money into Asian focused sports properties, keen to have greater exposure to a larger and increasingly affluent Asian consumer base.
This is all supposition of course, and predicated on a roll-out of events that are only beginning to eventuate. Nonetheless, the rise and rise of Asia as an economic force shows no sign of slowing, and the inevitability of the ‘One Asia’ tour will increasingly see a greater focus on the sub continent and surrounds as a growth area for professional golf.
The US PGA Tour currently holds the high ground as the leading pro golf tour in the world, but faces great challenges (on both domestic and international fronts) in the years ahead to maintain that position. If business sentiment shifts further into negative territory in the U.S., and for a prolonged period, those challenges will become increasingly pressing. They can also rest assured that there will be no shortage of usurpers watching and waiting for the opportunity to unseat them from such a lofty throne.
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