SBJ/July 25 - 31, 2005/Marketingsponsorship

PGA Tour pitches own ‘chase,’ priced at $40M

The PGA Tour has quietly pitched a blockbuster new title sponsorship package for a season-ending points “chase” that would span numerous tournaments and crown the PGA Tour season champion.

The price tag is high. Several sources familiar with the proposal confirmed that it is in the range of $40 million a year, starting in 2007, when the tour’s next television agreements would begin.

Under the concept, players such as Chris DiMarco would square off in a points chase.
The tour has presented the new package to both current sponsors and new prospects, and several sources on the sponsor side said it has received genuine interest despite the fact that numerous factors aren’t set in stone, including the number of tournaments that would make up the chase, which tournaments they would be and which network or networks would televise that portion of the season. Even the precise competitive format is undetermined, one source said.

Numerous sources said the tour is strongly considering ending its season in mid-September, so the chase conceivably could begin in July or August, likely incorporating the results of a points system that would begin at the start of the season.

An Associated Press report last week indicated the tour could begin a chase immediately after the PGA Championship, now played in mid-August but which could move one week earlier to give the chase sufficient time, roughly six weeks.

Though vague, the plan sounds somewhat similar to NASCAR’s current ten-week Chase for the Nextel Cup, which begins in mid-September.

Through a spokesman, PGA Tour co-COO Ed Moorhouse declined comment on the chase concept and repeated the tour’s stance that a new schedule and sponsorship implications are still under discussion.

Sources said the tour is looking to nail down a sponsorship commitment by early fall and to leverage that deal in its television negotiations, which are likely to begin no earlier than late fall.

The deal likely would be the tour’s richest single sponsorship. Tournament title sponsorships can run as high as $7 million before activation, including media, which can account for nearly half of the deal’s value; Buick and Chrysler have three title deals each, and Buick is also the official car of the PGA Tour and numerous individual tournaments. The springtime West Coast Swing presented by Allianz, and the Fall Finish, presented by PricewaterhouseCoopers, cost roughly $15 million annually, sources said.

There is no doubt the chase sponsorship would include a large media buy.

The tour has discussed its tentative plans for a new schedule with a small group of companies, including Ford, Chrysler and Buick, which have roughly one-quarter of event title sponsorships among them. It is not certain if sponsorship of the chase has been pitched to them, but it’s likely, as the Buick Championship now falls squarely in the chase’s potential time frame, and Chrysler now has two events in the Fall Finish, which could be rendered obsolete by a points chase.

PricewaterhouseCoopers, the current Fall Finish sponsor, would also be a prime candidate for the chase. Buick, Chrysler and PricewaterhouseCoopers marketers had not returned calls at press time.

Speaking earlier this month about the concept of a points chase, Tim Humes, vice president and director of the Buick account at Momentum, Detroit, said, “My only concern is can they deliver it at a level to make it successful, make it big enough to mean something?”

Media buyer Larry Novenstern, senior vice president and director of national buying at media agency Deutsch, had not seen the proposal, but said: “I think it’s an interesting idea, but I don’t think it’s worth $40 million. How much money are the title sponsors to those tournaments going to get back for watering down their sponsorships? It’s a possibility [that sponsors could benefit from the added importance of their events], but as someone looking out for my clients’ best interest, I would have to look at the glass half-empty.”

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