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WORLD GOLF FOUNDATION MEDIA CONFERENCE

September 26, 2007

JAMES CRAMER: Welcome to this morning's announcement regarding the World Golf foundation. My name is James Cramer, I'm the senior director of communications for the PGA TOUR and I would like to begin by introducing the gentlemen joining me on the stage. To my immediate left, Mr. Jim Armstrong, Executive Director of Augusta National Golf Club; Mr. Peter Dawson, chief executive of the R&A; the Commissioner of the PGA TOUR and chairman of the World Golf Foundation, Tim Finchem; Mr. David Fay, the Executive Director of the United States Golf Association; the Executive Director of The European Tour, Mr. George O'Grady; and Joe Steranka, Executive Director of the PGA of America, with that I'd like to turn it over to the chairman of the World Golf Foundation for remarks. Commissioner?
COMMISSIONER FINCHEM: Thank you, James. Thank you for being with us here at this year's Presidents Cup, we are looking forward to a great week of competition. This morning, however, addressing you as chairman of the World Golf Foundation, and I want to welcome the members, most of the executive committee of the World Golf Foundation to this meeting. Missing today is Carolyn Bivens, Commissioner of the LPGA Tour, she could not be with us. I want to thank the other members of the executive committee for being here. I have served as chairman of the foundation since 1994, since the inception of the World Golf Hall of Fame which originally created the World Golf Foundation which originally created the World Golf Hall of Fame in Florida, subsequently developed the First Tee Program which is now reaching over 200 chapters in First Tee schools and well over 1.5 million kids and subsequent to that, Golf 20/20, which is a collaboration effort to focus on new programs that could help drive participation in the game.
Over the past two to three years, the people up here have been talking back and forth about ways that the foundation could go in a slightly different direction, and to become more of a robust entity in affecting the opportunity and challenges that face the game of golf and certainly the activities of the golf organizations that are represented here today and other golf organizations.
There are a number of things where our paths cross where we have common ground in terms of our priorities as an organization or in our commitment to the game of golf. And those discussions have led us to conclude a couple of things. One, that we should look at expanding the role of the foundation in a couple of areas, and two, we should look at changing the structure of the World Golf Foundation, and I'd like to review both of those.
Before I do, Joe Steranka was introduced; I would like to introduce Brian Whitcomb, the president of the PGA of America is with us. He also serves as director of the TOUR Policy Board of the PGA TOUR.
With regard to the purpose of the foundation, we have reformed the board, and I'll come back to governance and organizational structure in a moment. But that reformed board is led by an executive committee, the members of which are here today plus the Commissioner of the LPGA, and that executive committee has determined that existing things that focus on the foundation is the Hall of Fame, the First Tee Program and the 20/20 initiative should continue, but beyond that, there should be a real focus on research and communications of the game of golf around the world, and also, that as we reserved last week, there is a need for certain things from time to time and the general support to the collective activities of the organizations and the first one of those that has hit the radar screen is the anti-doping effort and the role of the foundation will play in providing the support effort to the individual activities of all of the golf organizations that will eventually be involved in the anti-doping program. With that said, I think the fundamental power that's required by the foundation is very solid coordination of communication, thinking and activity of the golf organizations; No. 1, and No. 2, a global focus and, in fact, one of the committees that will be established, and I'll get back to that in a minute, is a committee dedicated to making sure that the initiatives of the foundation are done with a global focus.
To effectuate a more robust organization, the executive committee has approved a restructure of the foundation. First, there will be a different board led by this executive committee but including a number of additional members that will be announced over the next year.
Secondly, as the chair of the foundation, I will step down as chairman at the end of this year and the chair will rotate among the members of the executive committee starting with David Fay, the Executive Director of the United States Golf Association in 2008. David will assume the chair on January 1.
Thirdly, there will be a committee structure that will include from time to time members of the board in some fashion, and individuals who are not on the board. And those committees are in three different groups. One group of committees is the standard governance committees you have in any organization; audit, finance, compensation and related matters. The second group of committees are oversight committees that oversee the specific activities of the board. For example, we've had in operation for some time an oversight committee for the First Tee Program made up of members of the board.
And third, our advisory committees like the one we have for the Hall of Fame. There will be additional committees added over the next six months to a year, and as I mentioned earlier, one of the committees will be totally focused on making sure that the governing structure of the board and the focus of the foundation is done with a global focus.
To manage this effort, we are announcing today that Steve Mona, who has been for the last 14 years, the chief executive officer of the Golf Course Superintendents Association will be coming on in early 2008 as the chief executive officer of the World Golf Foundation. Everybody here knows Steve Mona. Steve has had an exemplar record of great leadership in elevating the quality and focus of the Golf Course Superintendents Association. He has had a good working relationship with everybody that's here today, and many other golf organizations. He's well respected as an independent thinker and a good manager and a good communicator, and for all those reasons, we think he's the ideal choice to try to herd the cats sitting up here and making sure we're doing what we're supposed to do in relation to each other.
Joe Barrow will continue in his role of running the First Tee Program. Joe has been running that program now for seven years. He will serve as chief executive officer of the First Tee, and also executive vice president of the World Golf Foundation. We think Joe is the ideal advocate and leader for the future of the First Tee, which has very lofty goals for the next ten to twenty years.
Jack Peter will continue his role in shepherding and growing the focus on the World Golf Hall of Fame.
And I'm assuming there will be other additions perhaps over the next year that might be consistent with either the functions we've outlined today or the global focus of the organization.
Lastly I'll say that this announcement today is about the purpose and structure of the World Golf Foundation. Obviously we made an announcement last week regarding anti-doping, and we can answer questions about that that you've thought up in the past few days.
But the main message today is that we are excited about creating a more dedicated, more resourced entity to aid us in the areas of opportunity and challenge that are in front of the game going forward, and with that, I'd like to step down and ask other members of the board, starting on my right with Jim Armstrong to make comments as they see fit about this announcement.
JIM ARMSTRONG: Tim, I really don't have anything to say other than we've been a great supporter of the World Golf Foundation since its inception. We think its importance is real. It's becoming even more so as the game is becoming more global and as a member of the golf community, we are happy to continue to be a part of it and support it.
COMMISSIONER FINCHEM: Peter?
PETER DAWSON: Thank you, Tim. I actually think that this is a very significant announcement today for the game of golf. Golf is often perhaps misunderstood, often criticized for having very complex series of organizations running the game; all of the tours, the governing bodies, the national associations and so on.
And as Jim said, as golf is increasingly global, I welcome this opportunity of getting the major organizations of golf together and having this World Golf Foundation for dealing with issues of worldwide importance in the game, as well as supporting the well-established initiatives that the World Golf Foundation stands for. I think this has a potential to be really significant.
DAVID FAY: Tim, I want to thank you for your vision and leadership in creating the World Golf Foundation. I'm not saying that obviously in a past tense; it's the current and the present and the future.
Picking up on what Peter said, it doesn't matter whether it's other sports, politics or household issues; often times you hear, are these folks communicating with one another and are they talking with one another. I think as Peter inferred, the fact that we're all up here and Carolyn Bivens and all of the other major Golf Associations, it should be comforting to everyone who plays the game, writes about the game, follows the game; that this particular herd of cats is moving in the same direction.
GEORGE O'GRADY: I think it's very important for The European Tour to be connected to the seats of power within the game. The European Tour enjoys a tremendous relationship with all four major championships. I think if we take our role as having to, let's say represent the rest of the world in a professional sense, so many amateur federations, so many other tours, so many different cultures to bring into the center of the World Golf Foundation, which I think is seen in the announcement the of the anti-doping policy last week, if you can bring all bodies together to the policy we all eventually decide upon, and we work together, that speaks volumes for what this body of men are setting out to do. Thank you for the invitation.
JOE STERANKA: I'll add to that, just saying our game and business has never been more globally connected than it is today, and I see that happening even more so into the future. The few bits of significance that I've seen in my relatively new time as the CEO of the PGA is a more involved seat at the table by the LPGA which we think is very important for the growth of the game standpoint to leverage the LPGA's participation, the LPGA's popularity to grow participation among the women, and then the addition of Peter and George on the international side, which is critical.
Tim, I know it's a big step to kind of burden something and fund something for so many years and turn it over to David Fay, which I commend you for, but in all seriousness, I think that's another great sign that you have a group of leaders, a stable group. Steve Mona is going to be a terrific addition. It's kind of bittersweet because the worker side, the golf professionals and managers and superintendents, he's been a critical part of unifying the work force in golf, but he will similarly do a terrific job for the World Golf Foundation. So I am very excited about it.

Q. David, if you're the chair, does that mean the USGA now pays Steve's salary?
DAVID FAY: First of all, Doug, I'm the chair on 1/1/08. There may be some recounts on the vote. No.

Q. More serious question, who actually funds this organization, is it a contribution from all of the folks on the executive committee?
COMMISSIONER FINCHEM: It has a multiple number of funding streams related to the different things it does. For example, the First Tee Program has a group of individuals called the national trustees. These are individuals who have made significant grants, individuals or companies, to the First Tee Program. Sometimes they allocate some of those dollars to the administrative costs of the foundation. The Hall of Fame has a whole other range of funding sources from licensing agreements and some of the real estate related activities of the Hall of Fame.
The programs related to 20/20 are generally funded by golf organizations, but also semi-golf individuals and organizations have been involved. There will be, based on the new direction of the foundation, a refocus on the development plan. It's assumed that all the golf organizations will continue to support it financially but additional resources will be sought for a variety of sources.

Q. And question for Peter, when you mentioned the significance of the this foundation, how will the average fan, how would us know, what kind of difference it's making in the next one or two years? What will we see?
PETER DAWSON: I'll simply say without being more specific than I can be, I think you'll inevitably be able to see more joined up, better quality decisions being made around the game in its development. If the bodies that are represented here and others have this forum for discussion. I think it's -- there's a little bit of history in golf with different organizations going in slightly different directions, and it would be good if we all took this opportunity to unify that effort for the good of the game.

Q. I'll backup a couple of days, the first flair that's fired up which has received major attention has been the drug testing. To get everybody under the same you umbrella I guess I would ask George since you're further along in formulating the policies, is the plan -- the LPGA is looking at, I think, a one to a lifetime ban for first, second, and third offense. Is that roughly what you guys are looking at, and would that same penalty hold true if it was a test for, say, marijuana in the bloodstream? Does that sound fair when I think we are all looking at trying to stop -- you are calling it an anti-doping policy, that's not really doping per se. I think there's maybe a difference between cheating and the other.
GEORGE O'GRADY: There's a big differential in the performance enhancing drugs and the recreational drugs.
I don't think the -- I think the strength, to answer Doug's question here is the anti-doping thing shows one benefit of how this does affect the game, and the man on the street, the regular golfer. It's critical I think with all the bodies here, that golf preserves its clean image, non-cheating image; the penalty for if you're ever caught cheating is Draconian in golf, and it will be the same on the anti-doping policy.
What we said in the announcement last week was we haven't finalized what those penalties will be. We discussed it again briefly this morning. We have a subcommittee going through all different bodies going through it all. We are working on the time when we bring it in next year and ideally both the PGA TOUR and The European Tour synchronized on the same date, and whether we've both got the might to go at it with the same vigor or the resources to go at it with the same vigor or the resource to go, we don't quite know. And we haven't finalized our plans on those penalties. But as I said last week, we are well down the road. We are aiming to try to get our decisions made by the end of this season, which is the Sunday of the Volvo Masters in our case. That's our aim and if we can get them done, fine. If we don't we'll just go a little bit later because it has to be a fully considered policy and if possible, put everybody on this table together; they are pulling us and we're pulling them. It's an answer but not a full answer.

Q. So the penalties are still in flux?
GEORGE O'GRADY: Oh, yeah.

Q. I wanted to ask about the doping policy. Why not just adopt the Olympic anti-doping policy, I wonder how much thought was given to just doing that, the ease of just saying, okay, we'll follow the Olympic list and just follow their lines and not allow for some of the uniqueness of golf. And also I wanted to gauge reactions any of you might have heard from players or your constituencies regarding the anti-doping announcement.
COMMISSIONER FINCHEM: Well, I think we stated the reasons why we did not include two categories of substances that are on the WADA list. The two main reasons is they are substances which are very frequent in the marketplace that has a consequence create significant administrative burdens with granting therapeutic use permits or exemptions, and they also are very questionable in terms of their impact from a performance-enhancing standpoint.
The list that the -- the model list, and I'll reiterate, it was a model list, there would be variations to that list for various reasons among different organizations, but that list has been reviewed with WADA, representatives of the effort to put together the model list, met with WADA officials this week here in Montréal. The WADA people seemed comfortable with the direction that we're going and pleased that all of the golf organizations are working together and not objecting in any significant way to the exclusion of those two areas of substances.
So we were pleased about that. In fact, those meetings resulted in an effort to exchange information with WADA. So WADA will be a resource for us that we hope to take advantage of it moving forward, but as we said last week, we are in the preliminary stages at the organization level of working on the details of programs and we'll have more to say about that later.

Q. To what degree does the formation of this group implies consensus for an individual group to make an important decision. For example, if Augusta decided to regulate the golf ball for the Masters with this group now being formed, would you want a consensus among all of the groups and would you all go ahead, or can any organization still go ahead and make its own decisions whether it's the U.S. Tour, the USGA, European Tour or Augusta National; and that seems to speak to the strength of the organization, if you can all act individually, then how strong? If I can hear from Augusta, perhaps?
JIM ARMSTRONG: From our perspective I think what we're saying is we've all got individual issues that affect our various constituencies. But at the end of the day what we are all here to do is work for the collective golf the game and the more we talk about the issues, the more we get consensus about them, I think the better we'll all be.

Q. Individually if you felt it necessary and the tours didn't go along with it?
JIM ARMSTRONG: I don't think there's anything there to suggest that we couldn't act individually if we felt it was in our best interests.
COMMISSIONER FINCHEM: We've always had the right under the Rules of Golf and our regulations, we reserve the right to amend the Rules of Golf as we see fit. But we always have gone the extra effort not to go down that path, and we continue to do that.
This is just taking to a whole other level as Peter referenced and David did the amount of interface, the amount of discussion and the best example was in the last few months working, we had representatives of The European Tour, the LPGA working on a recommendation for a model substance list as the beginning of a global policy. This entity allows those things now to happen in ways that historically just happened. So that's why we are all excited about it.
JOE STERANKA: I would add to it, so far it's been very evident that we didn't need seven halls of fame. We didn't need seven entities doing research about the economic impact of golf. We didn't need seven entities looking at a strategic plan for making the game more accessible and affordable and increasing participation. Government relations is something we've looked at recently.
We're leveraging the relationships we have in this body to have a unified front when we go to state capitols and our nation's capitol to speak about golf and what it represents. It still leaves a lot of things that need to be addressed on an individual basis but there's a great pragmatism in not overspending or being redundant when you have like-minded individuals and goals. And so far, these are those that we've found and I'm sure we'll find some more in the future.

Q. George, I'd be curious how many countries you play in that have direct testing required by the government, and could you give an example of how that testing is carried out at that event.
GEORGE O'GRADY: At the moment it's mainly within the European countries. France was the leader. Portugal, Italy, Spain, and Sweden are probably the strongest. But basically every European country, golf in those countries are governed by their Golf Federation which is a government-authorized body. They basically have to do what they are told to do. In France or Portugal or Italy, specifically, if the government decided drug testing should take place, they just send some representatives of the government in to test.
All of the Federations get part of their funding from the Olympic movement within that country. Golf is not an Olympic sport but it still comes within the central body. They come in, they find any drug on the WADA list; however prescribed, whatever your doctor said, you test positive, you're banned for two years.
We had a situation in Italy where a club professional played in a PGA event, which still comes under the Federation, suffering from prostate cancer, he had some sort of drug to-do, but it's also a masking agent, and poor fellow is banned for two years. I wouldn't like to use the word ridiculous, but you're in a situation where it needs a bit more thought. And a similar situation happened in Spain. What we are doing is trying to bring a measure of common sense to a professional business, and really that's what this is about.
To come back on to the earlier question, The European Tour's role in this foundation is about issues that affect the whole game, rather than the single-minded calculation of the World Federation of PGA Tours have, which is the Commissioners of all the different Tours, trying to argue their case for their position in the world structure, which by definition has to be slightly selfish, because our role is to look after our own members. This enables one to sit back, take a look at overall futures in the game, together with the powerhouse and the image shapers of world golf.
The majors dominate the golf development, certainly within the media, the commentaries on major championships transcends anything else in the sport. So anytime you get this group of people at the table, and you can forcibly argue your opinion, you know, must be for one, for the benefit of one's own membership; and but to, as the cliché, but has to benefit the game of golf.

Q. For example, when you go to France, is every player tested?
GEORGE O'GRADY: Not every case. It's random again when it comes through. It's different testings. They have had people tested and then they find, you know, it has to be absolutely clinically correct when you're talking about professional athletes at this level.
We discussed this morning our policies on random testing, on testing the winner, on testing the entire field and testing things like that, which is a big undertaking. It's one thing, it requires resource to do that and whereas we are reasonably resourceful, I'd say our cousins here at the PGA TOUR have a lot more resource than we have to bring that to bear in the meet in the first place.

Q. Along those lines, there's so many stories that are out there, surely out there, someone is taking medication for something and it turns up on the list, do you think on the medical labor side that tours would be inclined to err on the side of caution?
COMMISSIONER FINCHEM: I don't know what you mean by "err on the side of caution." From a TUE perspective?

Q. Yeah, on the medical waiver side of things, to be a little more generous and to allow for if somebody legitimately is taking medication for a cold for whatever --
COMMISSIONER FINCHEM: I don't know how I can answer that without maybe conjuring up the wrong impression. Right now our focus is to get players educated, intensively educated about substances and how they get in your body and how you need something from your doctor you can apply for a therapeutic use exemption.
We will have independent individuals involved in the approval of those TUE requests, independent doctors. So I don't think we are going to be in a position to say, well, let us take a look at that and see if that's okay. There will be standards and we'll expect the TUE administrators to handle that. So I don't really know how to answer your question, err; we don't want to err, period.
It's going to be a learning process in the sport. We just want to try to make sure that we don't make some of the mistakes that other sports have struggled with. They have learned and we should learn from their learning as we enter into the fray. But it's something that is very important, very serious when you are putting the player in the position of having a positive result, and whether it's a TUE or not, and impacting the image of that player.
But, I will say this; that the golf organizations who are represented here today have a pretty good track record with regard to applying the rules, administrating the rules and working with players on issues and things of that nature. And I see no reason why that can't continue. We didn't want to go this direction, we're not sure it's the best thing for golf, but it's a necessary thing we have to do because of the world we live in. So we had to do it right and we had to take every effort to make sure that it is done right so we can avoid mistakes. We don't want any mistakes.

Q. From last week, did you say there would be a drug administrator?
COMMISSIONER FINCHEM: Each of the organizations has to administer their own drug programs. We hope those programs, and we've been in conversations about this, wind up to be reasonably consistent but each organization has got to have administration procedures that relate to what they are doing in respect to their organization and in our case the PGA TOUR. So we will have dedicated people focused on it.
Now beyond that, at the World Golf Foundation, there will be a resource created to provide information generally and share information generally with the industry and other organizations that are administering programs, research information, coordinating with WADA and other organizations that do research on testing protocols as they come aboard. There are some substances right now that there is research going on for testing, etc. There is a lot to that area, as well as sharing information as it relates to the TUE process. So that will be a support function in the World Golf Foundation.
But each of the individual organizations is in charge with administering their own program.

Q. There won't be one drug czar?
COMMISSIONER FINCHEM: No, I don't see that happening. There has to be variations of the programs for the reasons we set out last week, the requirements and situations of different countries with regard to testing protocols, so it's going to vary. But you are not going to see a czar, you do this, do you that. We are going to leave it up to the individual organizations to manage a programs that hopefully is consistent with what's happening around the globe.

Q. Would it be a goal of the foundation, long term -- Mr. O'Grady mentioned golf in the Olympics, to return golf to the Olympics, to lobby the IOC; would this be a long-term project that this particular group could undertake?
GEORGE O'GRADY: I think since the last time we discussed it, there has not been an item on the agenda; for a year or so, I don't think we've talked about it. It's a constant dialogue, but it's not high on the list of priorities at the moment.
But one thing is certain, if you don't have a drug policy, you don't test, you're not even at the base point.
PETER DAWSON: It's perhaps just worth pointing out, the position is that the International Golf Federation, which is the body that runs the World Amateur Team Championships, is the body currently recognized by the IOC as representing the game of golf; it is not this group here.
One of the weaknesses that the IGF has had is its lack of involvement in the professional game in the past, and the IOC would be very interested in professional golf being in the Olympics. But this is another example of how a group of people represented along this table can perhaps move some of these things forward. That's not to say that it is the policy here that golf should be in the Olympics. That has not been discussed. But it gives you the opportunity of having a more meaningful, perhaps, look at that issue.
JAMES CRAMER: Very well, ladies and gentlemen, thank you very much.

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