SBD/February 22, 2012/Marketing and Sponsorship

PGA Tour, FedEx Extend Sponsorship Deal For FedExCup Through '17

FedExCup will still offer $35M in bonus money to players based on points standings
The PGA Tour today announced a five-year extension of FedEx' sponsorship of the tour's season-long points championship through '17. The FedExCup will continue to offer $35M in total bonus money to players based on their finish in the points standings, including $10M to the winner. Beginning in ‘13, the four-tournament PGA Tour Playoffs for the FedExCup will be officially rebranded as the FedExCup Playoffs. As part of the extension, FedEx will continue to advertise in PGA Tour telecasts and other media outlets and become further integrated into the Tour's digital and global endeavors. FedEx also plans to continue its B-to-B initiatives at tournaments in key markets (PGA Tour). PGA Commissioner Tim Finchem said FedEx' renewal provides "great continuity, and it allows us to continue to build what the FedExCup is all about in a continuous fashion, which drives value for everybody." It also covers "about 60% of our new television agreement." He added of the FedExCup, “It's become a big part of what the PGA Tour is all about. It has had the effect of pulling our season together, and we're going to try to make some adjustments in the next couple of years to do that with the FedExCup in an even more impactful way" ("Morning Drive,” Golf Channel, 2/22).  GOLFWEEK’s Alex Miceli said, “We think the deal was probably inked a little while ago, but they wanted to wait to a time when they could actually present it in front of the national media." Miceli: "The one thing that I think is the most important is that it allows for continuity of the Cup with the same name. NASCAR had that continuity with their Cup, and then it started losing its luster when you had to changing different sponsors” (“Morning Drive,” Golf Channel, 2/22).

IMPACT ON THE TOUR'S FUTURE: GOLFCHANNEL.com's Rex Hoggard reports the only potential "drastic change" as part of FedEx' new deal would "move the beginning of each season to the fall after the Tour Championship." The 16-member Player Advisory Council was "briefed on the new plan last week in Los Angeles," and Finchem earlier this season indicated that the "new off-calendar schedule could be in place by the end of 2013." While Finchem "said that the contract extension was not contingent on the new schedule alignment," FedEx Exec VP/Market Development Mike Glenn "did not dismiss the impact the new schedule could have on the overall strategy" (GOLFCHANNEL.com, 2/22). Golf Channel’s Gary Williams said, “What's going to be interesting is how many people will lose, and I'm talking specifically about the West Coast swing." Williams: "FedEx had to know, almost to the detail, what direction the PGA Tour is going in. ... What’s going to happen to these events, the Fall Series, which may start the meter on the New Year. FedEx has to know all these things to re-up their sponsorship. You cannot change the overall perimeters of what this system is without the people who are ponying up the money in order to do so." He added, "The renewal from FedEx is a big deal. ... It's great -- if you retain sponsorship as the economy tries to kind of crawl their way back to some level where people feel some sense of prosperity, let alone normalcy. ... I just want to know who's going to be affected in a negative way. The West Coast swing -- with all these events that may gain more relevancy, and I am talking about FedExCup-relevancy, going forward. What happens to Hawaii? What happens to some of these events in the state of California? The Waste Management? … These guys are playing so late into the year, and there’s so much money to be earned in the Far East these guys are shutting down and a lot of them are not saying hello to the PGA Tour until the month of February, that’s five weeks into the season” (“Morning Drive,” Golf Channel, 2/22).

HYUNDAI A NO GO: GOLFWEEK’s Miceli cited a source as saying that the PGA Tour’s “quest for an umbrella sponsor for the Nationwide Tour will continue after Hyundai declined a proposal.” It was “widely reported" several weeks ago that Hyundai was “close to signing a $100 million deal to have its name on the developmental tour.” But the source said of Hyundai, "They were considering it but never got to the point of more than kicking the tires.” The source said that Hyundai reps were “pitched the proposal” at the Tournament of Champions at Kapalua in early January and “took the next month to review it.” Ultimately, Hyundai officials “thought that sponsorship of the Nationwide Tour, estimated to cost $12 million to $14 million annually, was not a good marketing fit.” Golfer and former PGA Tour Players Advisory Council member Tom Pernice Jr. said that if an umbrella sponsor is not signed, the Tour “would fund the developmental tour in 2013 and beyond” (GOLFWEEK.com, 2/21).
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