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Golf: The Way Golf Works

The United States Golf Association and the Professional Golfers' Association Make the Rules, Run the Business and Keep Watch on the World' s Greatest Game
Jeff Williams
From the Print Edition:
Edgar Bronfman Jr., Mar/Apr 03

At the end of every PGA Tour season, Commissioner Tim Finchem gives his state of the tour address. It's usually a pro forma affair, with Finchem speaking to the media at the Tour Championship, telling everyone that in the era of Tiger Woods, everything is just peachy. After all, hasn't Woods added his own variety of nuclear fuel to the sports world, stoking the furnaces of the PGA Tour to unimaginable levels? But at the 2002 Tour Championship in Atlanta, Finchem could not give a pro forma address, because it had not been a pro forma year. The media approached the speech with curiosity and downright skepticism. With the PGA Tour so dependent on a vibrant economy, everyone assumed that Finchem, for once, would have to admit to a softening of his sport, to a duck hook downward in the PGA Tour's fortunes. Even armed with $850 million in television contracts, Finchem might not have the ammunition to keep all the Tour's nearly 50 tournaments afloat. So as he began to speak, the heat of the moment seemed considerably higher than the temperature of the Georgia autumn. Would Finchem finally have to be the bearer of bad news?

"On the business front we are obviously in an extremely difficult environment. It is the most difficult environment we have been in since the 1990-'91 recession," said Finchem, apparently setting the stage for a bad year. "But tough times have a way of demonstrating real strength, and the Tour's strength continues to be visible. One of the things that has come through to us in conversations with sponsors in the last 18 months is that sponsors recognize the unique values of a relationship with the PGA Tour: The image of our players. What our players represent. The give-back focus among players in our tournaments. The relationship with our communities. The very devotion of core-value views. These are things that resonate more and more in these times, and these are things that companies want to be associated with."

If there was any sense of vindication in Finchem's demeanor, he didn't show it. But he exuded a deep sense of excitement and accomplishment. In the 16 days leading up to the news conference, Finchem had been winging around the country in the Tour's private jet, wrapping up final tournament sponsorship packages. And that was at the end of a grueling season of combing the business world for sponsorship dollars. As a result, Finchem was able to announce in Atlanta that the PGA Tour would be fully funded in 2003 to the tune of more than $225 million in prize money, an increase of about $25 million over 2002. The Tour had lost Anheuser-Busch as a sponsor, but had gained Coca-Cola. It had lost WorldCom, but had gained Ford Motor Co. It had known for a long time that it was losing Buy.Com as sponsor of its triple-A development tour (nÈe Hogan Tour, then Nike Tour, then Buy.Com Tour), but had found the Nationwide Co. as a replacement. There were still ongoing issues with the Champions Tour (the newly renamed Senior Tour), but Finchem was confident that the old guys would be a playing a full schedule, too.

"I never let myself believe we would come out anywhere but where we've come out," Finchem says of all the work that went into fortifying his tours for 2003. "Looking back at what happened and what continues to happen in this market, I've got to say I'm impressed we were able to do what we did."

What Tim Finchem did to earn his $3 million salary -- plus bonus, which brought the figure closer to $6 million -- is not the stuff of clubhouse gossip. The business of governing golf is not something the average foursome discusses over pitchers in the clubhouse. Tiger's on everyone's lips, but not the purse structure, nor the rules, for that matter. The world of the average golfer is confined to the next shot. How far is it, what club can I hit, can I get it airborne, is there $2 or $20 riding on what I do, is anybody watching? Do I really have to tell you what I shot?

Everyone knows that Tiger Woods has attracted a ton of new players and viewers to the game. He is to golf what Michael Jordan is to basketball, what Muhammad Ali was to boxing, what the Dallas Cowboys were to pro football. He is very much the twenty-first-century incarnation of the man who made golf a popular sport in the twentieth century, Arnold Palmer. How Tiger Woods plays the game has set the standard for the PGA Tour and to some extent for golf around the globe. His game, powered by the nuclear reactor of his soul, excites the masses and awes his competitors. He's surely the game's brightest star, its lighthouse on the shore of the promised land where they play $5 million golf tournaments and earn the right to wear unfashionable green jackets. Woods was a rocket-fueled addition to the Tour when he arrived in 1996, and Finchem was smart enough to ride the wave.

But Woods is not the game. He may define it, but he does not control it. He does not make the rules, or run the tournaments. The game of golf, which came before him, still goes way beyond him no matter how large a swath he has cut through the public consciousness, no matter how many trophies fill his house or how many millions fill his bank account.

Without a stage, Woods would have no place to perform. Without a script, he would have no lines. His stage is provided primarily by the PGA Tour, and the script is written primarily by the United States Golf Association, which tells Tiger Woods and everyone else what the rules are, what is proper. The USGA also provides its own stage, the United States Open; another major was built by the Augusta National Golf Club, which exerts its gravitational pull on the game by way of its Masters golf tournament.

The two men who exert the most influence over the game without holding a club in their hands are Finchem and United States Golf Association Executive Director David Fay.

That said, however, it is unfair to distill control of the game down to these two men, just as it is overly simplistic to put the burden of competitive excellence solely on the shoulders of Woods. No one needs to tell the average golfer that the game he has chosen to play is complicated. Not only is hitting the ball downright confounding to most players, the rule book is a tome befitting Tolstoy, and the variety of equipment -- clubs and balls -- could fill the Smithsonian.

Only the structure is relatively straightforward.

The PGA Tour is the sanctioning body for the most successful collection of golfers in the world. The PGA Tour is where all players must compete to ultimately prove themselves. The Champions Tour is a phenomenon that has defied the convention that athletes aren't interesting once they can no longer compete against the young lions. The Nationwide Tour is the most prominent development tour in the world. All those tours fall under the PGA Tour umbrella, with Tim Finchem holding the handle.

The USGA, in concert with the Royal and Ancient Golf Society of St. Andrews, writes the rules of play and the specifications for equipment. It also conducts the U.S. Open Championships and the leading American amateur championships, researches how to grow better turf grasses, maintains the handicapping system and funds many golf development programs. David Fay is the man who runs the day-to-day operations, who is at the forefront of USGA activity, who speaks eloquently about rules and equipment in a humble manner that almost belies his passion for the game.

There are other organizations: the PGA of America, the association of club professionals that conducts the PGA Championship and the Ryder Cup; the Ladies Professional Golf Association, which conducts the highest level tour for women players. Scads of local and regional golf organizations -- such as the huge Metropolitan Golf Association of greater New York or the Northern California Golf Association -- also conduct their own championships and run the business of golf within their territories and scope. Likewise, private clubs and public courses have their own agendas. On top of all that mishmash, there are equipment manufacturers, pushing the envelope of the rules by creating and selling new generations of clubs and balls.

But somehow golf works. That is largely because players of all calibers buy into the need to be regulated: the USGA sets the standards for amateurs and the PGA Tour governs professionals.

Both Finchem and Fay will say they work for others or that they do the bidding of others, and both are right. The PGA Tour, which has the very best professional golfers in the land, is a nonprofit organization with a board of directors. Finchem is only the third commissioner in the PGA Tour's 35-year history, succeeding Deane Beman in 1994. Beman built the modern tour. Finchem has built upon that foundation, with the advantage of having Tiger Woods as his lead attraction. Finchem also oversees the nation's Tournament Players Clubs -- a network of 23 private clubs, daily fee courses and resort venues that feature top-flight courses and are also used for pro tournaments -- that were begun during Beman's years. The courses constitute part of the for-profit end of the PGA Tour's business; the Tour owns or has an ownership interest in all but one of the Tournament Players Clubs.

"Tim will tell you that he works for the board and for the players, but he has done a pretty good job of getting the board and the players to go along with what he wants," says a player who did not wish to be named. "He can be very persuasive, and that's a big reason that he has the job anyway."

The PGA Tour sanctions the tournaments in which its players participate. It provides, primarily through its big television contracts, 62.5 percent of the purse money for regular Tour events to the charitable entities that operate most of the Tour's tournaments.

The Tour also controls the conduct of its players. It determines who is eligible to play and what tournaments outside of the Tour they can compete in. If a player wants to play in Europe or Australia or Japan, he must get clearance from the PGA Tour. If a player wants to conduct his own unofficial event, he must get permission. The Tour also owns most of a player's marketing rights, which it sells worldwide, and lets tournament organizers use players' images for promotion.

These policies are determined by the PGA Tour policy board, which comprises nine people, four of whom are Tour players. A Player Advisory Council made up of 16 players advises Finchem and the policy board. Finchem doesn't vote on policy nor does any other member of the Tour business staff.

But Finchem is the man whose ideas hold the most sway. He is the master negotiator, having cobbled together contracts with ABC, NBC and CBS as well as ESPN, the Golf Channel and USA Network that are worth a total of $850 million over the next three seasons. He is the force behind the President's Cup: the PGA Tour versus the Rest of the World Team competition that takes advantage of the fervor raised by the Ryder Cup. He is the man behind the World Golf Championships, three large-money, small-field events involving only the elite players from the best international tours.

The World Golf Championships arose a few years after Finchem faced a challenge from Greg Norman, the great Australian golfer, over similar contests. Norman endorsed a proposal for a series of golf tournaments that would include only the world's top players. However, the PGA Tour would not sanction the tournaments, and Finchem immediately declared that any PGA Tour player who participated in them would lose his playing privileges. Needless to say, that venture, under the auspices of Norman and the Fox Sports Network, went nowhere in a hurry. But the idea did eventually surface in the form of the World Golf Championships. All was suddenly right in the PGA's world again, even if Norman was understandably bitter.

Finchem also had a bit of a fracas with Woods. In a Golf World magazine interview in November 2000, Woods complained that Finchem never talked to him unless he needed something, and that the Tour had too much control of his marketing rights. The marketing rights issue has also been a flash point with Norman over the years. Shortly thereafter, Woods and Finchem had a private conversation. Woods came out of it feeling a little more appreciated, but still without all his marketing rights. Finchem knows when he has a good thing, and he wasn't about to let go of it.

Davis Love III served as a player director on the PGA Tour Policy Board for eight years. He is a staunch supporter of Finchem and the way the Tour conducts its business and exerts its control over its players. "Tiger Woods falls under more restrictions of the licensing and marketing rules than a player like Chris Riley," says Love. "For Tiger, it's like he can't control how much he is on TV. We're selling that. The reason Tiger is making $8 million a year, or whatever, is that Tim has control of a block of marketing rights that he can go sell around the world. Selling it in Europe, selling it in the Far East. There is something that Tiger is giving to the Tour that is greater than the other players, but he is also reaping the benefits. He doesn't need the retirement plan, but his retirement plan is through the roof." (Several years ago, Golf Week magazine estimated that Woods would be able to retire with $300 million of Tour pension money. The magazine also estimated that a player who lasts 17 years on the Tour, finishing 75th on the money list and never winning a tournament, would be eligible for more than $40 million in pension money.)

There is no doubt that PGA Tour purse money has skyrocketed under Finchem's regime, which was about $55 million when he assumed the reins. Finchem has had to work extra hard in a down economy to pump up the PGA Tour and try to maintain the purse levels and tournaments of the Champions Tour, which has run out of legends now that Jack Nicklaus doesn't play and Lee Trevino is no longer competitive. "Tim and the staff have done a great job in this lousy economy," says Love. "We've got a $25 million purse increase for this year. We have a full schedule -- I'd say we have it pretty good."

Lest everything seem like a birdie or an eagle for Finchem, there is at least one fat double bogey on his rÈsumÈ. He was the backer of moving Senior PGA Tour broadcasts to CNBC, a financial network not involved in sports. For years the Senior Tour had been on ESPN, but with ratings falling, the network did not want to continue its broadcasts. So Finchem took the Senior PGA Tour to CNBC, where it just about disappeared altogether.

There also are some players who say that Finchem can be quite cold and aloof, but they are likely to be the ones who wouldn't be his best friends outside golf anyway. Love goes fishing with him, and Finchem is known to attend concerts with other players. Fuzzy Zoeller calls Finchem "very accessible."

"I've always said that the players own the Tour and determine how it should operate," says Finchem. "It is my job to make sure that things get done the way that they want it done. That doesn't mean that everyone agrees with everyone else. We have to find consensus."

hat is something that David Fay seeks, too. As executive director of the United States Golf Association, Fay's reach is considerably broader than Finchem's when you consider that the USGA establishes the rules for the game in the United States and oversees the amateur play of millions of Americans with handicaps from nothing to astronomical. USGA policy is determined by an Executive Committee of 15 individuals that ultimately makes decisions that affect equipment standards, amateur status and, most importantly, the rules. The PGA Tour plays by those rules, by the way, but does not have to.

Fay is a soft-spoken man who doesn't play much golf but has been deeply involved in the game since he joined the USGA in 1978. Since becoming executive director in 1989, Fay has watched the USGA change, though he has been more than a watcher. He cites the public orientation of golf in the United States now, as opposed to the private club domination of the game since the late 1800s. Fay comes from a public links background, and his most visible coup was getting the Black Course at Bethpage State Park in New York approved for the 2002 U.S. Open, the first truly public course ever to host an Open. To get that done, he had to sell the idea to the USGA Championship Committee, which then recommended the proposal to the Executive Committee, the body that decides where all the organization's championships will be played.

"We had the opportunity to play at an Open site where the general public could also play," says Fay. "Bethpage Black is a great course, the facility was great and it was the right sort of thing for us to be doing. The profile of the USGA has changed since I got there. So many of our members now play at public facilities instead of private."

He also is the front man for everything the USGA does. Though there are powerful people on the Executive Committee, like president Reed Mackenzie, it is Fay who articulates and often formulates the USGA position. He has, for instance, been called upon most often in recent years to explain or defend the USGA's position on equipment, a task he describes in his deadpan way as "thankless."

As equipment manufacturers try to expand their customer base or create niches for themselves, they do it with technology. Some of the most notable manufacturers in the game, the late Karsten Ping and Ely Callaway, have run afoul of USGA equipment regulations, which cost the USGA plenty of money to administer and in some cases, litigate. The "trampoline effect," the ability of bigheaded metal drivers to sling the ball off the club face, has been a particular bugaboo of golf club regulation.

The PGA Tour also supports these regulations, but Fay believes technology has benefited better players much more than the average guy, so in the future stricter regulations may have to be drawn for elite players. "The devil will be in the details," says Fay. "Where do you draw the line, and does it apply only to the men's tour or what about the LPGA or Senior Tour or leading amateur events?"

And, as Fay says, it's thankless. "This is a not a task that people line up to do," says Fay. "It's not at all profitable."

The USGA is a not-for-profit organization that makes its money almost solely on the back of its one trusty steed: the U.S. Open. From $30 million a year in television money and millions more from corporate participation in the Open, the USGA funds its other events, which, incidentally, don't make a dime, like the U.S. Women's Open, U.S. Senior Open, U.S. Amateur, junior and senior events, and public links events. The USGA also hands out about $10 million a year to golf development programs across the United States and spends about $3 million a year on turf-grass research.

"The USGA is a Lego set," says Fay. "The structure is bigger the more money we get. But the essence of the USGA would still be there even if the economy really went south and a large part of the public soured on the game. We really aren't in the business of putting on events for professional players, though clearly we have one of the biggest events for a pro in the U.S. Open. But if we had to downsize it all, we would still be dealing with the rules of the game and really the essence of the game."

Finchem sees hard work ahead for the PGA Tour, but also continued good times. "[Our purse money] will grow the following three years, to about $360 million to $380 million," says Finchem, who believes that the new sponsors he and his staff have brought in over the last year portend a solid future. "So we are delighted with the strength and quality of the sponsorship group that we now see as really improved, which will set us in good stead for the next five or ten years."

While golf in the United States continues to have a bright future, it is clearly not immune to economic pressures, and not even Tiger Woods can support the game on his substantial back. It takes Finchem and his PGA Tour staff, David Fay and the USGA staff, along with other major administrators like PGA of America CEO Jim Awtrey and LPGA commissioner Ty Votaw to keep the game humming. They ensure that the professionals play for the big bucks and that amateurs can have their moments in the sun.

 

Jeff Williams is a sportswriter for Newsday on Long Island.

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