The eminent Tim Finchem announced last week that the PGA Tour “could lose a couple more events” in the coming years. Obviously, this news isn’t a proclamation of imminent disaster, or an LPGA-esqe “we may not even have a Tour next year” scenario. As the PGA Tour isn’t a publicly traded corporation, it isn’t obligated to continually grow in order to return profits to its shareholders. My point here is that downsizing, and potentially losing money in the process, ought not to be a terrible prospect.
The Tour has to pause while assessing the present difficulty in order to take a look further into the future when real trouble will come.
In simplest terms, the Tour will be in significantly more trouble after the Tiger Woods era boom is over. Although this event is years away, to be sure, it’s of such great significance to the Tour that it needs to be addressed sooner rather than later. Finchem and others need to come up with a sustainable business model going forward, preferably one that doesn’t involving latching on to the rainmaker’s coattails and hanging on for dear life. The present expansionary stall only acts as a reminder of what is on the horizon.
A few title sponsors may back out of their commitments in the coming years, and more than likely they will be replaced, though. Perhaps an event or two disappears from the schedule, but no major turmoil is imminent. Undoubtedly stagnation and overconfidence will result from this seeming invincibility and return to money making. However, it’s not too soon to begin preparing for 2030 or so when Tiger isn’t a fixture on the Tour. Indeed, a fundamental of good business is that when times are good, preparations must be under way for when they are not so (along with, obviously, plans for continued growth and expansion).
All this, of course, excludes the possibility that a legitimate heir to the Woods throne will emerge. Could someone more captivating, talented and bankable come along before Tiger retires from regular tournament play? Yes, clearly. However, I don’t think hoping for such a scenario is the best business plan for the Tour.
If the Tour is really interested in long term growth and profitability, then it needs to bolster attendance, innovate, with respect to the total experience of attending a PGA Tour event, and come up with something to attract additional television viewers (or those watching on their computers or handheld devices).
The failure to address each of these areas in turn will result in a more pronounced and lengthy decline in revenues, which dwarfs the present difficulty, which is really nothing more than the product of a severe economic downturn across all sectors.
Ben,
Excellent writeup! In your second to last paragraph, you said that in order to maintain and grow for years down the road, the Tour needs to innovate with respect to attending an event. I was curious to see if you had any specific ideas on that. A couple months back, Anna Rawson was interviewed, and she had a few different ideas on how to raise attendance and intrest in the LPGA. Do you think some of her ideas may be valid for the PGA as well?
Golf has been a part of my life for over 50 years, nothing had a bigger impact than Tiger Woods. The golf/bowler physic of pre-Woods players, (Gary Player excepted), meant we were always making excuses our wanna be sport. Tiger made the game exciting because he brought sports training to the field. Yes we will miss Tiger, (well I won’t I’ll be dead), but now the game will forever be exciting and truly magnificent because Tiger was “the first”. Tiger made our game a sport and people love to watch and play sports; we’re going to be OK.