Chrysler cut back on its support of the Bob Hope

[PEZGolf]

Chrysler, owned by private equity group Cerberus, did not withdraw as a sponsor of the Bob Hope tournament YET. They sent fewer of their executives since they are working overtime to make up for some of the layoffs that have already occurred. No cars were out floating on the water to save expenses as well. Chrysler says they will sponsor the event next year, provided they are "still around". Last year, the Tour lost the sponsors for the tournaments in Atlanta and one in Palm Coast, Florida. AT&T; used to sponsor the first, and Ginn Resorts the latter. This recession is having its effects on golf and other sports as well, and is having a greater effect on the LPGA Tour, which is predictable.

[GaijinGolfer]

Chrysler will still be around, they may be owned by Fiat though.

[PEZGolf]

Chrysler will still be around, they may be owned by Fiat though.

You are right, since they have been working on that intensively in the last few weeks. According to the "Wall Street Journal", Fiat is having its own financial problems (what auto company is not?), and that may delay or negate the possible deal. I find trying to keep up with Cerberus to be interesting since they own the one company we have here in Ilion, NY---the Remington Arms. Since they are a private equity firm, it is not easy to obtain information. They divulge only what they want to.

It is interesting to watch the various effects of this recession on golf. For example, the USGA has reported a loss on investments (realized and unrealized) of $83.98 million for the year ending Nov. 30, 2008. We have never lived through anything like this, and many of its consequences are going to be long-lasting and devastating to individuals and their families.

[GaijinGolfer]

I agree and you can thank the government and the banks for that. This is why deregulation of the banks was a very bad idea.

[kafka01]

Chrysler will still be around, they may be owned by Fiat though.

Couple years ago Fiat almost went bankrupt and wanted to force GM to buy Fiats Auto unit - if that isnt irony.

http://www.businessweek.com/magazine...2079_mz054.htm Most of the big car companies sponsored tournaments in local clubs in the past - i just can imagine that they will cut back on international level and will do so on local level also. Its all about saving money at the moment. And lets face it, we had very good times in the past, there will be no simple replacement with another industry/company that fills up these now vacant spots with the conditions that were in the past.

[PEZGolf]

I agree and you can thank the government and the banks for that. This is why deregulation of the banks was a very bad idea.

You are right. When the Glass-Steagall Act was replaced with Phil Gramm's pet project that allowed financial institutions to "do it all", the genie was let out of the bottle, and the bankers and insurance company executives threw risk management out the window!

[PEZGolf]

Couple years ago Fiat almost went bankrupt and wanted to force GM to buy Fiats Auto unit - if that isnt irony.

You are right. The next few years will be very different from our recent history. It is sad, really. I know that my wife and I can weather the storm, but I worry about our two children (John is 27, and Leanne is 24).

[PEZGolf]

I read yesterday that---no surprise here---U.S. Bancorp's U.S. Bank will end its sponsorship of the Milwaukee tournament after this season. The problem with this event is that it is the "alternative tournament" when the Open Championship is played in England or Scotland. So, you have a weak tournament (because of when it is scheduled) with a weak sponsor. It will be amazing if some other sponsor steps in to take U.S. Bank's place.

[tm22721]

Japan golf memberships are down 95% since 1990 when their deflationary bust started. Its still not over in Japan yet we are following their playbook to the letter.

[flap]

I recently read that the FBR is needing a new sponser because FBR is 3 peoples names and 2 of them are going to jail for fraud!!!I realize the Thunderbirds do a lot of the organizational stuff but FBR puts up the cash.

[kafka01]

Some sponsors might come to the conclusion that the 200nd best golfer in the world not necessarly has to earn 250k alone from tournament wins - and this only for the US PGA Tour, it doesnt include European or Asian Tours. Last years price money for tournament on the PGA tour total was 278 million $.

The Formula 1 teams are complaining that development/equipment costs skyrocketed over the years and they are no longer willing to participate, European Soccer Clubs are higly in debt due to irrational high player salaries/transfer prices and in some cases even their russian owners slowly get cold feet seeing no way how their "toys" ever will breakeven or produce profit.

So when the easy money from rich russian oligarchs/oil sheiks or overpaid televison contracts will disappear combined with a much tighter budget for sponsoring by all the companies that are involved in sports sponsoring, you will see quite some consolidation going on. But after that i´m sure someone will reinvent a new bubble/hype with new easy money and the whole thing starts from new - thats how it has always been and will be.

[GaijinGolfer]

You are right. When the Glass-Steagall Act was replaced with Phil Gramm's pet project that allowed financial institutions to "do it all", the genie was let out of the bottle, and the bankers and insurance company executives threw risk management out the window!

Yup. You can only give out so many bad loans until it catches up with you. The lenders were giving credit to people and they knew darn well that a lot of those people couldnt afford to pay the loans with little regard to the concequences of so many bad loans. Now we are all paying for their foolishness.

This is one example of why smaller government isnt always a good thing.

[kafka01]

Yup. You can only give out so many bad loans until it catches up with you. The lenders were giving credit to people and they knew darn well that a lot of those people couldnt afford to pay the loans with little regard to the concequences of so many bad loans. Now we are all paying for their foolishness.

What i honestly cant understand - where did all this money came from in the first place or how did they justify to leverage credit amounts to such a huge mountain of debt, that according to the latest estimates for e.g. a bad bank, that takes all this worthless paper off the banks balance sheets would estimate 3-4 TRILLION USD according to this -

http://www.reuters.com/article/polit...50S5PI20090129 We cant really just talk about bad loans(mortages) here anymore, or? There has to be a lot more stuff behind, like all these derivatives, credit card debts, car loans.... For me the last months were very confusing. Every week you read about another ridicoulous amount of money some industry has to get bailed out, and just when you start to understand, how they fuc... it up, another bail out hits the news, twice or triple the amount and you just start wondering, whats going on here, and where did all the money go AND when will it finally stop?

[PEZGolf]

Yup. You can only give out so many bad loans until it catches up with you. The lenders were giving credit to people and they knew darn well that a lot of those people couldnt afford to pay the loans with little regard to the concequences of so many bad loans. Now we are all paying for their foolishness.

As a former banker with 20 years experience with one bank, and 5 with another, both in the Central New York area (Utica and Cooperstown), I knew what was going on. The banks making the loans could care less because they would sell off the mortgage loans to be bundled and securitized by the "whiz kids" on Wall Street. If you do not have to worry about repayment of the loan, and collect a fee for all the loans you make, you will loan to everyone that walks in the door and is breathing. What an amazing "house of cards" that was doomed from the beginning to collapse! No one can say that they are surprised, especially Alan Greenspan, who was a big advocate of deregulation of the finance industry on the grounds that the managements of the banks would look out for proper risk management. He forgot Michael Douglas' famous line from the movie "Wall Street"---"Greed is good".

[PEZGolf]

Many of the smaller PGA and LPGA tournaments will fold, as sponsors pull out. Here is a story that starts out sad, and ends up happy:

The BC Open was strongly backed by the communities around Endicott, NY, for years, and Johnny Hart, who draws the comic strip "BC" strongly backed the event. The Tour was ready to cancel it, and then fate intervened. The course was flooded in 2006 and the tournament was moved to the Turning Stone Resort & Casino in Verona, NY, not that far away. Then, the Tour pulled the plug on the local community and rewarded Turning Stone with their own tournament, as part of the Fall Series, after the Fed Ex.

The people around Binghamton were upset, needless to say, as they were innocent victims of "big money professional sports". The happy ending? In recognition of the tremendous community support and love of golf, the Tour gave them a new Champions Tournmant, sponsored by Dick's Sporting Goods. Players like Jim Thorpe and Craig Stadler have been BIG boosters of the new event, and I predict that it will do very well.

[GaijinGolfer]

As a former banker with 20 years experience with one bank, and 5 with another, both in the Central New York area (Utica and Cooperstown), I knew what was going on. The banks making the loans could care less because they would sell off the mortgage loans to be bundled and securitized by the "whiz kids" on Wall Street. If you do not have to worry about repayment of the loan, and collect a fee for all the loans you make, you will loan to everyone that walks in the door and is breathing. What an amazing "house of cards" that was doomed from the beginning to collapse! No one can say that they are surprised, especially Alan Greenspan, who was a big advocate of deregulation of the finance industry on the grounds that the managements of the banks would look out for proper risk management. He forgot Michael Douglas' famous line from the movie "Wall Street"---"Greed is good".

Thats the whole problem: greed. The big wigs made their money and they couldnt care less about all of the people that it hurt who are just barely getting by.

Yet another example of the rich getting richer at the expense of all of us. Granted, no one made people take out loans they couldnt afford, but IMO deregulation of the banks is yet another example of government looking out for special interest groups who support their campaigns instead of doing whats best for everyone.

[PEZGolf]

Thats the whole problem: greed. The big wigs made their money and they couldnt care less about all of the people that it hurt who are just barely getting by.

I agree with you, and while we are have gotten a little "off topic", I will make this final comment, since it does relate to all professional sports, including the PGA Tour. Our capitalistic society has many advantages, but it tends toward excesses because of the pursuit of the almighty dollar (remember the Robber Barons, and slaughterhouses in Chicago?). The owners of businesses have one primary motive---make money. The athletes or professional golfers who play for money have one primary motive---make money.

"In the good old days", Gene Sarazen, Walter Hagen, "Wild Bill" Mehlhorn, Ky Lafoon, Lloyd Mangrum, Ben Hogan, Slammin' Sammy Snead, etc. barely made a living and they had to sell life insurance or be club pros because they could not make enough money playing in professional tournaments. The same was true for baseball and football players. Now, the golfers and athletes in other sports make millions of bucks, and live a life style of the "rich and famous". Unlike Arnie, many of them regard giving autographs as a "pain in the butt". Some of them forget that if not for the fans, they would have to get "real jobs". One plus of a severe recession like this one is that it squeezes the excesses out of the system. Maybe some of our pampered athletes will "get a real slap in the face" when more tournaments are cancelled, and more perks are eliminated, and more tournaments are televised on The Golf Channel, and NOT on a major network. Golf participation in the US, according to the USGA and the National Golf Foundation, has been stagnant in this country in the last five years. It is no longer stagnant----------------it is now on the decline.

[Trav]

I recently read that the FBR is needing a new sponser because FBR is 3 peoples names and 2 of them are going to jail for fraud!!!I realize the Thunderbirds do a lot of the organizational stuff but FBR puts up the cash.

This is a gross exaggeration. FBR was formed by Eric Billings, who is currently the Chairman, having recently stepped down as CEO; Russ Ramsey, who left a few years ago to join a different financial services firm but retained a signfiant ownership of FBR; and Manny Friedman, who was charged (together with FBR itself) by the SEC with insider trading in a client's stock and settled the charges a couple years ago with a consent order that effectively precludes him from engaging in the securities business, while FBR settled by paying a substantial fine for lack of institutional control.

However, your basic point may be right. I would not be surprised if they scale back on the tournament involvement. FBR is not a top-tier firm; it has a reputation as being a bunch of cowboys and it has not done well for its investors in recent years (stock is currently trading at $0.20, down from a 12-month high of $3.50). I find it silly that they sponsor a national PGA event when it is not terribly well known outside its DC locale and they were always known more as marketers than performers, but I guess they felt this gave them some cred.