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KRAFT NABISCO CHAMPIONSHIP

March 29, 2006

Carolyn Bivens

RANCHO MIRAGE, CALIFORNIA

PAUL ROVNAK: I'd like to thank everyone for joining us. Carolyn, thank you for joining us, as well. This is our fifth event. The LPGA has gotten off to a great start this year, as we roll into the first major of the year. Carolyn, your first major, as well, as commissioner.

With that being said, I would like to turn it over to you for some opening comments and then we'll take some questions. Commissioner.

COMMISSIONER CAROLYN BIVENS: I'm just going to make a few comments and then we'll spend the majority of the time on the things that you all want to talk about.

Paul talked about the fact that this is our fifth tournament. We're off to a great start with the first four. The first two ended in playoffs. The first one in a three hole playoff with three women.

And then of course last week we had Juli Inkster, which certainly helped underscore the pipeline that we have on the score that the women over 40 are not just competitive, they actually win. So it's been a lot of fun.

And of course, Annika, as only Annika Sorenstam could, won the very first event that she came out for this year in Mexico City.

On the business side, talk about a few things we're doing. The first, as we talked last year, the preparation for this year, our overarching theme for the next three years is going to be building the LPGA brand. We're going to build that brand by continuing to build on the fans first and the five points of celebrity.

We want to make sure that our rookies, from this point on, have that same base, because building our brand going forward requires that we go forward on that foundation.

Some of the first initiatives is we have we are doing a lot of work and having an individual branding coach available for the women. The idea being that we will do everything we can to help them build their very own unique brands.

The LPGA is an amalgamation of all of these individuals and their individual brands. The point is not to make them anything or anyone other than who they are, but to make them the very best that they want to be.

The women have really gravitated to this. We had a couple of the players go through this during the off season. They were part of a panel. During the player meeting we offered sign up sheets and we actually had to expand having this coach for more than one day. We actually had to go to three days. And we're bringing her to a couple more tournaments and we will be putting up matching funds for the women who want to continue to work with the branding coach. We want to open up more endorsement opportunities and more opportunities to earn livings not only on the course and at the tournaments but beyond.

We've done a number of things in general media marketing. Examples of what we talked about last year, that we think these women and these stars have pulling power outside the world of golf.

The one that you saw first this year was the Academy Awards. We submitted an LPGA credential to the Academy of Motion Pictures that entitled each one of the 125 presenters and winners in the gift bag for a pass to the LPGA season and for a one hour lesson with one of the Top 30 money winners.

It was actually accepted into the gift bag and we had six of the women who were dressed by various designers and went to the Academy Award parties. It was a lot of fun seeing celebrities mix and mingle with other celebrities, and we're getting an awful lot of mileage out of that.

We have something coming up in a couple of weeks. We're putting two of the LPGA rookies with two of the NASCAR rookies and doing a cross promotion, if you will. It's a program that is already on the Speed Channel. And we're going to have two of the LPGA rookies take the NASCAR rookies to a course outside Dallas one day and they're going to go through the five points of celebrity. They're going to go through the fans first and then they're going to go through all of the pretournament warm ups and routines and then the four of them will play nine holes of golf.

The next day it will be reversed. The LPGA rookies will go to the race track. They will go through all of the prerace routines, including all of the sponsor meetings, and then they will work the pits.

There is a lot of cross marketing we can do with NASCAR for a number of different reasons. The primary one being is that we both operate very heavily in the space called hospitality. And I think there are a lot of things that we can learn from each other, and a lot of fun opportunities to have these women who have very unique and different pastimes and personalities into new arenas where they are very comfortable.

Last but not least, I'll tell you on the business side of things what we have done over the course of the last three or four months, we'll be finishing up this month, we'll be looking at the other business models of the other sports organizations and associations and other entertainment associations and companies.

We're benchmarking best practices in a variety of different ways, so that as we identify what we think is a best practice and we look at where we are and how we do that, we'll say that's what we want to be. It will be an amalgamation, a very unique best practices that will be applicable and will make up the LPGA as we go forward.

That's some of the major business initiatives that are at work behind the scenes.

PAUL ROVNAK: Thank you, Carolyn. We'll now take questions.

Q. Carolyn, you say three years. Is that the time frame at the end of which you would want to see the major changes you want or the major differences you want established for sure?

COMMISSIONER CAROLYN BIVENS: Larry, it is. We have such great momentum, and I keep talking about this great foundation. We couldn't be doing what we're doing now in branding with fans first and five points of celebrity not so inculcated throughout the organization.

So we will extend, and we actually know where we want to go beyond the three years, but each one of these is going to be a continuum, a building block on top of each other.

Q. How do you measure that? Is it strictly a television ratings thing? Is it a sponsorship thing, purse thing?

COMMISSIONER CAROLYN BIVENS: How do you measure branding?

Q. No, how the success has been of branding and the growth and translating the buzz into tangible results.

COMMISSIONER CAROLYN BIVENS: There is a lot of different ways. I got here late last night. I had attended for Monday afternoon and the first part of yesterday, the Sports Business Journals World Congress, dedicated to sports and a great cross section of sports.

It opened up Monday night with a interview with David Stern. If you want to talk about building a brand in the sports world it would be the NBA. They brand everything NBA and you know pretty much what you're going to get when it says NBA.

From an entertainment standpoint I would say Oprah is the best we know. She is a great personal brand. Whether it's her magazine or TV show, you know what you're going to get and there is a consistency.

Again in the entertainment world, Disney would be another world class brand builder. So there are a lot of different metrics that go behind that, it's not just one.

Q. When you speak of branding and a branding coach for the players, I'm not quite clear on the concept. Are you talking about, in essence, becoming producer of their own product?

COMMISSIONER CAROLYN BIVENS: They are their own product. Each individual golfer is a brand. They stand for something. They have core values. The companies that they choose to associate with and put on their hat or wear on their sleeve then begin to communicate to the rest of the world what those core values are. So it's making sure that those that they represent are consistent with who they are, and that the messages, the way they conduct themselves, is communicating to the rest of the world this is who I am and this is what I am about, is it consistent.

In going through the process, it also includes things like a number of these women have managers. When was the last time that you checked your press kit. What photo is being used. What's been said about you. If it's 2 or 3 years old, you may want to update it. You've grown, you are a different personality. It's looking at things like the products and services that they use, and would use whether or not they are endorsed by. What's comfortable. They'll end up being better spokespeople and they'll end up being better business partners.

To the extent we can get them to do that, again we can roll this up to the LPGA and our overall brand.

Q. I want to ask you a media related question, actually. With ABC television dropping out of the PGA Tour next year, does that conceivably open up any opportunities for LPGA events to perhaps be on network TV going head to head with the PGA, and would that be something that's desirable?

COMMISSIONER CAROLYN BIVENS: The media landscape is something we're spending a great deal of time looking at. First we're looking at it from inside the LPGA Tour. Let's talk about that first. We talk about this wonderful 30 year pipeline that ranges from Michelle and from Morgan all the way up through Juli and Beth. That is a great opportunity. It's also a challenge. It's a challenge because it requires very different messages be targeted at very different audiences and use different distribution channels. What do I need.

To communicate with Juli Inkster fans and followers is very different than communicating with Morgan's fans and followers. There aren't very many of the under 25 fans, those that are following Natalie and Julieta and that group, that are going to rush in on a Thursday or Friday and sit down and watch a two hour telecast whether it's on cable or network. They probably won't do much of that on Saturday or Sunday either.

We have to find out and understand more how do they consume media and how do they want to. So far some of the things that we're finding, they would much rather, the hole by hole scoring be pushed through and preferably to their cell phones.

We have to be able to what I call slice and dice our audience, know exactly who it is we're targeting, what messages works and what distribution channels.

The 35 and older audience, we need to reach them in more of the traditional media. I don't mean to suggest that TV is ever going to go away, but I do believe there are different combinations that we have to use. Maybe a highlight show or a combination of a highlight show and live coverage. Should it be an hour, what much should it be, how much should be broadcast. Should we be taping the after round interviews and webcasting those. We're looking at all aspects of inside and outside content.

Q. There have been a couple of negative headlines earlier this year regarding off course issues, rankings, media credentials policies. I'm wondering how you would characterize the first two months of the season off the course?

COMMISSIONER CAROLYN BIVENS: I'm surprised I got that question.

Q. Surprised it was this late?

COMMISSIONER CAROLYN BIVENS: No. But let me say this about that. It had to happen. It just had to happen. I'm not go going to give you these, but I'm going to suggest that you go onto the Internet and that you Google LPGA and then pick out some of your favorite players and see what you can buy, see what kind photographs have been taken at tournaments. And you can purchase just about anything that you want.

The LPGA, as I've said, was late to this game. We were the last mainstream sport that wasn't controlling the credentialing and controlling of the photographs. This was not targeted to the mainstream press. The mainstream press does also sell to a lot of other organizations who in fact generally tell the mainstream press that they are going to use it for news coverage.

What happens now for the first time is that now when we see this stuff, and agents and players are now monitoring this, it now means that we can go to the mainstream press and say, "Who was it that you sold this picture? This picture was yours, who did you sell it to?" And then it allows us to go to whomever you sold it to.

This is not the whole intellectual property area, it's not something that's going to go away. It's been a part of sports for the last ten years. It's been a huge part of sports over the course of the last two years.

As business models change in various organizations and as everybody seeks to define who is the rights holder and who owns what content for what purposes, there are going to be more and more of these things being debated publicly and more and more are going to be decided in the courts, unfortunately.

A few of the things in sports have already ended up there. The NBA is probably the most public one, about four or five years when they went against the New York Times.

Right now when we negotiate with a network. If we are selling the production rights and distribution rights, who then owns the hole by hole scoring, who owns the Internet rights. And in fact if they've purchased the Internet rights, does that include cell phone rights, for those who have cell phones that operate off satellite TV and a number of other things. That's not something that's going to be decided easily. There are also going to be formats that don't even exist right now.

As we discuss about brand building, we have got to have control of our content. It's also important, as you all know from a commercial standpoint. The two headlines that came out of the Sports Business Journal meeting the last couple of days have been two things. No. 1, brand is everything. And No. 2 is, he who owns content has it.

One of the things that they asked Mel Karmazin spoke yesterday, kicked off with an interview and talked about what they're paying for different content for serious radio. And they said how much of this can you afford and how much do you want to own. He said, "We want to own every content that's ever been developed and anything that's going to come along." The commercial aspect of controlling this is part of the brand and it had to happen.

The World Rankings, the World Rankings again, I would say, came out just about like the World Rankings have been received for every other sport, whether it be tennis and whether it be men's golf. There certainly was a lot of focus on a 16 year old. And I know the Michelle Wie surprised a lot of people.

I studied as fast as I could to get up to speed on that, not having been part of that for the last two years, and the LPGA, frankly, was actually one sixth of the groups that was negotiating that. The [] UAC was another one that everybody surprised that was in the Top 10.

Again, in talking to a number of people who have worked very closely with the PGA and been part of that whole system and doing studying on my own, it seems in just about every ranking there is always something that's called an aberration, or the ones that I was most interested in, is the fact that the same conversation had been had over the years with Jumbo Osaka. I don't think he ever won on the PGA Tour, but he consistently ranked in the Top 10, much like [] Uri Futo did because he played so often and won so frequently on the Tour.

These are all based on statistics. There is really no subjectivity. I'm assured by everybody who was there and participated in the meetings that the No. 15, which is a devisor that has been a big topic, was decided in December of 2004, long before anybody could ever have anticipated that Michelle Wie would have played exactly 15 tournaments.

I also think we can conclude, based on all of the World Rankings that have come before ours, that it won't be exactly the same a year from now as it is right now.

There was a regular meeting scheduled which will be an important one at the British Open. And that's where we'll look at how have the first four or five months of this World Ranking worked and how have they rolled out.

COMMISSIONER CAROLYN BIVENS: I'd like to ask you a question about the Scandinavian TPC on the European Tour that's hosted by Annika Sorenstam. This year they are playing on their home course. A lot of good players are coming there after the British Open. I know she wants and a lot of other people there want her tournament to be part a part of the LPGA Tour. Are you considering that or any thoughts on that?

COMMISSIONER CAROLYN BIVENS: Thanks for asking that. Annika Sorenstam is our No. 1 player. We would love to support Annika Sorenstam's tournament and we're looking at the schedule for '07 and we're having conversations to see how that might happen.

Q. It may be possible?

COMMISSIONER CAROLYN BIVENS: It may be possible.

Q. (Within how many years?)

COMMISSIONER CAROLYN BIVENS: Within the next couple of years. We're taking a look at it. We're already talking about '07 and '08.

Q. (No microphone.)

COMMISSIONER CAROLYN BIVENS: We're looking at the schedule. There are a lot of other sponsors that have dates there and tournaments that have commitments. Between the things that are going on with the organizers of Annika Sorenstam's tournament and what we have, we're taking a good, hard look at it.

Q. On the credential matters again, I thought LPGA went a little bit too extreme on that and I don't understand that. I believe that the first regulation the LPGA drafted was that the media, when they take pictures, that they can use that for only 48 hours and after that they needed LPGA's permission. I want to know why you went that extreme.

COMMISSIONER CAROLYN BIVENS: Good. First of all, let me say that we had hired about a month ago one of the best First Amendment lawyers and law firms in New York City. We had had conversations and prolonged sessions with the heads and the general counsels of a number of sports organizations. Every sentence that was in the credentials, from SBS is taken directly from a major sport credential.

There are a couple of things. No. 1, the first week we allowed redactions, changes, to be made to the credentials. We gathered all of those and consulted again with some of the other sport general counsels and with our First Amendment law firm and made changes.

The 48 hours, by the way, is and always has been in our credentials for all of the video and television footage. That wasn't new to the LPGA. That was new to the press credentials, not to network or broadcast.

The other change that the Associated Press asked us to make was the addition of a sentence that clearly stated that we were not controlling news stories. We added that.

The other language that ended up beyond the first 36 hours, by the end of this happened on a Wednesday. By Friday morning there had been a joint press release issued by the Associated Press and LPGA that the language did not inhibit news stories, nor was it ever intended to. Everything beyond that has been over the commercial use.

The other sentence that has caused so much conversation was taken out of a paragraph that said that the LPGA had the right to use the photographs solely for the purpose of promoting that tournament.

Now, where did that come from? That came from the NCAA credentials, for exactly the same reason the NCAA uses it. We're two organizations that don't have our own press core. We don't have our own in house crew, be that either photographers, reporters, whatever. We don't have that. So the only way that we promote the tournaments the next year is with the use of those photographs.

In some cases, the media is not the right owner of that. Unlike some of the other sports who will not credential freelancers, we do credential freelancers. So sometimes the media is not the rights holders, which meant that we needed to negotiate individual media by media for the use of that.

Does that answer your question?

Q. Carolyn, this tournament will mark the first time that Michelle and Morgan are playing in a major championship as professionals. Do you see this sort of as a seminal event for the TOUR? And how important is it for each one of them to win, not this week, but just in general?

COMMISSIONER CAROLYN BIVENS: Michelle and Morgan both played in Fields, so they were both on the course at the same time. I think one of the things that's really difficult for these young women, beyond just Michelle and Morgan, I'll also include Ai Miyazato and some of the others, there is an immense amount of pressure for them to win. Let's give them a little bit of let's give them a little bit of a break.

It is incredibly competitive out there. The caliber of golf that these women are playing is awesome. They will eventually win. They would love it to be sooner rather than later. You can put a lot of other women, including the article about Natalie this morning, Natalie consistently finishes in the Top 10. Every one of these women is not content, nor should they be, until they win a tournament.

The next thing the conversation is going to move to is when will they win a major. One thing will feed on the other. They will win. They are very, very good. This is just an extremely competitive sport.

PAUL ROVNAK: Thank you. Thank you, Carolyn.

End of FastScripts.

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