SBJ/Dec. 20-26, 2010/This Week's Issue

GE partnership caps productive year for PGA Tour

General Electric will become a PGA Tour official partner, capping a flurry of sponsorship activity for the tour in the final months of 2010.

With the GE deal expected to be in place for the start of the 2011 season, the PGA Tour ends the year with plenty of momentum. In all, the tour will see a 5 percent increase in sponsorship revenue in 2010 over 2009, said Tom Wade, the tour’s chief marketer.

“Given the environment that we’re in, it’s been an outstanding year,” Wade said.

In the last few months, the tour has locked down a number of important deals. It finalized GE, signed Cadillac to title-sponsor the WGC event at Doral, brought back FedEx as title sponsor of the St. Jude in Memphis, replaced official airline Delta with United/Continental, renewed Sony for the tournament in Honolulu, brought on Hyundai as title sponsor of the season-opening event in Maui, added Rolex as a Presidents Cup sponsor, and renewed the Puerto Rico Tourism Co. Earlier in the fall, Nationwide became the Memorial’s presenting sponsor, replacing Morgan Stanley, and Wyndham renewed for the Greeensboro tournament.

Another unnamed tournament sponsor is expected to come on board this week.

Title sponsors typically spend $7 million to $8 million for events that appear on network TV, while WGC sponsorships go for $10 million to $12 million. Official partnerships with the tour can range from the low seven figures into eight figures depending on the assets and media included.

“Corporate America seems to be piling up a lot of cash and not spending it,” Wade said. “But I’ve been doing this 17 years and, really, we’re in about the same situation, sponsorshipwise, that we’re normally in. It’s frankly not that much different from when things were good economically.

“From that standpoint, it’s been a very good year. Nobody could have predicted this kind of sponsor retention.”

The official airline deal is the first league sponsorship for United or Continental.

“Given our expanded coverage coming from the merger, we are in a position to expand our message using larger platforms like the tour,” said Jeff Jones, Continental’s manager of sponsorship marketing. “We have always focused on the business traveler, and this is a kind of business travel that often gets overlooked. The tour members are very much road warriors, and we’re prepared to look at ways we can assist and enhance their travel experience. … The audience the tour attracts also aligns perfectly with our current demos and advertising strategy.”

There also is a sense of relief in the golf industry that companies are willing to promote their association with the tour and its events. Through the recession, that wasn’t always the case. Wells Fargo pulled its name off the Charlotte event for a year.

“It’s great to see that sponsors are actually using their name with these deals,” said Scott Seymour, senior vice president of golf at Octagon. “We’re definitely seeing a lot more corporate interest in the game and the level of activity has been very positive. Golf still reaches an affluent audience and that’s the audience that’s still spending. That’s attractive to a lot of companies.”

Near the top of the tour’s priority list in 2011 will be replacing Nationwide as title sponsor of the developmental tour. GE, which is being represented by IMG Golf, engaged in talks with the tour about the title sponsorship of the developmental circuit, but industry sources say that tour officials have been in talks with other companies as well, including Putnam, a financial services firm.

Nationwide notified the tour that it would not renew the title sponsorship when it runs out at the end of 2012, but if a sponsor can be found sooner, the insurance company would step aside. The 29-tournament series runs from late January through October and more than half of the events are televised by Golf Channel.

The PGA Tour goes into 2011 with two tournaments missing a title sponsor: the Heritage in Hilton Head, S.C., which lost Verizon; and the Bob Hope Classic, near Palm Springs, Calif., which lost Chrysler two years ago. Those tournaments are fully funded for next season and are not in immediate danger.

Among the official marketing partners, Wade said the tour renewed or extended 13 sponsors, which brings the total number to 60. GE, which reported $156 billion in revenue in 2009 and was listed as the 12th-largest company in the world, is deeply diversified through financial services, industrial manufacturing and health care. It’s not yet clear which area GE will emphasize through its deal with the tour.

Entering 2011, the tour will focus on automotive, where General Motors had been a tour partner for more than 50 years before pulling out in 2009. Even though Cadillac is back as Doral’s title sponsor, the tour is still seeking an official auto.

Wade also identified the consumer electronics and technology categories as opportunities.

The tour likely will enter into renewal talks with FedEx, umbrella sponsor of the seasonlong points championship, in 2011. That deal goes through 2012 and includes options to go longer. Locking down FedEx to a long-term deal that would include a heavy advertising commitment would be a bonus for the tour entering TV negotiations with CBS and NBC later in 2011.

“Any time we’ve got commitments like FedEx, it’s helpful,” Wade said. “But I think it would be an overstatement to say we must get it done” before the TV talks begin.

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