DUBAI DESERT CLASSIC

February 2, 2006

George O'Grady

Keith Waters

GEORGE O'GRADY: Thank you very much, Gordon, and thank you for your time today. I think it's only appropriate that myself and the Director of International Policy for The European Tour should be prepared to answer any questions that you have. This week as I'm aware, many different journalists from all different countries have asked for comments on certain things that have emanated at the beginning of the week and it hasn't been fair to answer until we were ready. I think this is a very exciting start for the calendar year of The European Tour. Everybody who has travelled to the last two tournaments and this one can see they are very special weeks. Abu Dhabi was a tremendous introduction to the Tour. The conditioning of the Abu Dhabi course; the conditioning of Qatar and conditioning here, this is a tremendous finish to the Gulf swing. And then we go on to the Johnnie Walker Classic in Perth, which speaks volume for the strength of The European Tour and its ability to attract an international, a truly global international field at this time of the year. When I've spoken to many journalists individually, we've talked about the challenges presented by the PGA TOUR, and the opportunities. I think we see an opportunity at this time of the year, it's coming at other times during the season and will certainly come again at the end of the year. We have some very strong partners who will share our vision going forward. I think we have had several questions both to myself and Keith Waters on our reaction to the World Golf Championships and the fact that they are all being played in the United States. We are obviously not very comfortable with the fact that all of them are played in the United States. And this year we certainly have meetings with the PGA TOUR in Sawgrass during THE PLAYERS Championship. We do feel that The European Tour stands for the global nature of the sport. We work with our co-sanctioned parties in South Africa, Australia and Asia to reflect that, that status, and we will continue to do so. Specifically, also, we've answered questions on our Irish television policy, mainly for the Irish journalists which is all completely in the public domain where this is more of interest just in that country. But the submission going to the Irish government to back up the existing television policy of The European Tour, which we unashamedly think is the right policy for the Ryder Cup, The European Tour and in this case distinctly for Ireland. We went to the government and with our Irish partners eight or nine years ago as a way to widen the game in Ireland and by bringing it to the widest possible audience and to promote Ireland as a golfing tourist destination. And emphasising that relationship, The European Tour is about long-term relationships and partnerships. I know that we started with some earlier disappointing remarks with certain media and our counterparts in Asia about our plans on a couple of tournaments that may or may not have been co-sanctioned by the Asian Tour. I'm happy to say that with a little bit of common sense, I had a conversation with Commissioner Louis Martin and that's all resolved. The Indonesian Open will go ahead, I think dates are the 2nd to 5th of March co-sanctioned to the satisfaction of both parties; and the Singapore Masters, which I believe in the newspaper copy said it would not be co-sanctioned, will be co-sanctioned, as well. The importance of these things happening is that the Singapore market is now in its sixth year of a very successful golf tournament, whoever promotes and doesn't promote it. The winners are a who's who of The European Tour, truly global. That certainly helps with all of the local Asian players that come to tournaments. We open our doors to them on The European Tour. We are not in the habit of turning our back on partners if they have a little bit of local difficulty. If we had done that over the years, the growth of The European Tour would struggle with many tournaments. Specifically in Indonesia we have a relationship with the Indonesian government and the Jakarta region. We were very fast to help, when the tsunami disaster came last year. The finish to that tournament was Colin Montgomerie and Paul McGinley presenting a check for $100,000 to the President, or the President's representative, in Indonesia; he will be attending a fundraising dinner on the Wednesday night of our tournament this year. The President himself is raising more funds for the disadvantaged in that area, and the Governor of Jakarta is presenting the trophy on Sunday night. When you make relationships of these kinds with governments, we see that in the big picture and we don't get involved in small skirmishes that we can't solve. We welcome Indonesia, and we welcome the Singapore Masters. The TCL Classic, a Chinese event, the first event to be sponsored by a Chinese corporation and backed up by a Chinese region; without the leadership of a global brand like BMW, Volvo, UBS, HSBC and Johnnie Walker speaks volumes for the development now of the country, with the youth program that they are trying to develop in China. And that's how we feel; we are trying to spread the game in the widest possible nature. Make it attractive to the global players, make it attractive to all European Tour Members and enhance the potential for their nations and the countries we visited. We do play by invitation, but we play where we're welcome and there are many different people inviting The European Tour and we're invited because of the values of the brand that The European Tour stands for and the world-wide visibility we get; one is our television policy, but equally as important is the support all members of the media in here today give us. So thank you for your support and listening. I stayed for a couple of days to sort out Asia, but it's now to the satisfaction of all parties, resolved. Thank you.

GEORGE O'GRADY: There was a problem in two tournaments in the same week, Indonesia and a tournament going up, Amby Valley Masters in India, a new event which had been put in. I think because we had not confirmed Indonesia early enough, we had not confirmed it because of financial problems the promoter had in the past in terms of late payment of certain prize money; and in the situation of the Indonesian, prize money was paid seven weeks late. That's not a first on The European Tour; we have been in and out of Africa and all sorts of different places, and sometimes governments do not pay exactly on time. Indonesia has some very special cases last year with the disasters in the region. We managed to point out that there was a bigger picture to smaller date clashes. He's been very statesman-like, Louis Martin in pursuing Amby Valley. And the move, they are working on that now, they are confident they will have a move and it will be played -- I think it's been suggested it will be played in May. That's not completely confirmed, but they have agreed in principle to move. And it would be fairly, well, strange; we would have gone and been sanctioned on our own. We would have gone in unsanctioned because we do not break our relationships with the government and we do not break relationships. We've had five years of very successful tournaments in Singapore, a lot of different winners including the first Chinese winner of an event on The European Tour. These Asian players, and the Chinese, realise the opportunity that you get by being co-sanctioned with The European Tour and when we make arrangements, we stick to them.

GEORGE O'GRADY: The European Tour has run 41 co-sanctioned events around the world with the either the Asian Tour or the Australian Tour, hardly with a problem. Any problem we have had, each one are invited -- what do we bring to the party; are we just going in there to get the arrangements for our players, or do we bring something extra to it, either in terms of the global position we take on television; television policies don't come around by accident. We've made big commitments for this development, Tour Productions and are now the largest single producer of golfing television pictures in the world. SKY Television is our No. 1 client, followed by the Golf Channel in the United States. If we don't deliver total 100% quality wherever we go, we don't create those opportunities. We spread the TV part in terms of rights money across the board where we go. Events coming on in the middle of the night for SKY and the European stations are not that attractive, as you're watching live golf at four or five o'clock in the morning, stands to reason. And yet we manage to divide the pile up to where we bring a lot of money on that side, we bring a lot of commitment; our players travel, and we have been invited. To walk away from the Singapore Masters after five years when we feel like we needed the tournament and so did the Asian Tour, would, we feel have been a mistake. To go into Indonesia once at the invitation of the government and walk away when they really need international exposure to showcase Indonesia after the problems they have had, would, again, we feel be going back on our relationship. The problem of announcing the dates or blocking off the dates before we got around to a different event was we felt, and we emphasised, possibly an error, but it was a smaller one compared to the big picture iwe're trying to look at. And thankfully all parties have seen that in the end.

GEORGE O'GRADY: How do you mean?

GEORGE O'GRADY: Well, there has been discussion on the World Golf Championships and we are very much at the table, and I think we support a lot of the other tours there. They have been staged in American twice, twice at Valderrama, and twice very successfully in Irelands; a market to that particular sponsor, that wasn't a particularly big market for American Express, when you compare it to the financial centers of Frankfurt, Paris, London, wherever else. The American Express is at The Grove this year. I'd almost state that it's going to be one of the most successful World Golf Championships in its history. All of the American Express tournaments played outside of North America have been very well attended, and good winners. I think the Americans, we're all at the table on the World Golf Championships. And I think that the guys here have asked me that question; you have to admit the money is being generated out of the American TV network and certain American sponsors. We certainly have a powerful contender for a World Golf Championship event to be able to be played in Britain. I think I mentioned to some of you yesterday, Britain is also a developed golfing market. We cannot deny that. We have an Open Championship, arguably the Championship in world. We have a lot of very good tournaments in London and up and down the country as well as in Europe. Whatever we talk about, the HSBC going to Shanghai was certainly a global event with a global sponsor for us, and certainly with the World Golf Championships, maybe not with the American network involved, but our partner, the Golf Channel, which is now a very major TV partner of the PGA TOUR, now gets effectively to 70 million homes in the United States and committed viewership focused on business in golf.

GEORGE O'GRADY: I'd react like a businessman, which is exactly how did I react a year ago when the Qatar Masters wanted to be co-sanctioned because they are hosting the Asian games. As I said recently in a letter to Louis Martin: Why when the Qatar Masters started, did it start with The European Tour when they had the vision to built a golf course; why did Dubai come with us then? We were prepared to travel outside our boundaries, not everybody thought it was a wise move and we did and we are long-term partners. Throughout the growth of Qatar, they have had quite a few problems. There has been war in this region. They have governments trying to persuade or encourage people not to travel to the area. When we signed a contract years ago to play in Qatar, we delivered on that fact that despite there are dangers and certain governments recommending you don't travel to Indonesia at the moment. Our advice is that we feel we're safe where we are going, and because of the incident last year and they had some minor or difficulties, we back up that agreement when we go. If this is part of Asia, I think it's free for the organisers, Dubai to ask us if they want to; same with Abu Dhabi. I would hope they would come to us as has been done before. We have agreed in principle we are co-sanctioning Qatar. I think there was an Asian Tour event, too, at Dubai Creek about ten years ago, and I don't see it today.

GEORGE O'GRADY: Well, I think my submission is on the government Website in Ireland, so the exact words I've used I invite everybody to see. It's quite a strong submission. I think it's -- I don't think it would be threatening as such. It would be disappointing because in my submission to the Irish government, this is a very carefully thought out policy to market Ireland and to develop the game of golf in Ireland with a lot of bodies in Ireland all contributing to that discussion, both the Golf Union of Ireland, the government-backed sponsors, masses of people have been involved. The change of policy with six months ago, is not something I can in any way recommend. SKY obviously, anybody who has ever watched SKY or any subscription channel would like to boast either "exclusively live" or "live and exclusive" whatever the words they use. Ireland has grown their fan base there. Sky will try to show every ball. They are making an enormous financial contribution, not just to The Ryder Cup in Ireland, but all of the events in Ireland and, in fact, all of the events around the rest of the world. It would certainly not do us any good. For the same reason I said about our friends in Asia, we have long-term relationships in The European Tour and we would be going back on a business deal with SKY. The Irish government have to look at it. We can read the act, every three years, the Minister; it's insisted that he reviews every major sporting events in Ireland if they should be listed as free to air. So you have to look at The Ryder Cup. All we've done is submit that this isn't something to be doing this way. This is part of a big plan. The Irish golf tourism market has grown significantly in the time we've been promoting golf to the rest of the world. We are business partners and we try to deliver a plan, and we don't like it changing at the 11th hour. [].

GEORGE O'GRADY: Firstly I think we've been invited to make a submission and I have every confidence in the Irish government that they will realise that we are not people who just come and go at our whim. We have a thought-out business plan with thought-out television policies involving just about everybody in Ireland that's a major business player, and I'm confident the Irish government will make the right decision.

GEORGE O'GRADY: I would imagine we'd have a discussion on the event if it were to happen. I'd imagine I'd find a way, a solution to the satisfaction of both parties.

GEORGE O'GRADY: There was a discussion on the size of field on both sides, their players to our players, which we have resolved to both parties satisfaction. And you've got to understand in the last few years what's happened in Asia. Yes, we're in their territory. But we have come in, and the contracts for the BMW tournament, the Volvo tournament, the HSBC tournament and now the Johnnie Walker tournament, the very first co-sanctioned tournament around the world was the Johnnie Walker Classic. Johnnie Walker were going to pull out of golf. The condition for them to continue in Asia is they were co-sanctioned by The European Tour and the body involved was the Asia Pacific Golfing Federation. We worked out a deal, we were co-sanctioned with Johnnie Walker and this body in Asia. We invented the concept, Johnnie Walker invented, we all did put it together, an Order of Merit for Asian players, and we backed that up. When they moved it around to Australia, it was tri-sanctioned and we were, if you like, consistent parties in that. We finally have brought in, and I can name the three executives who work for us on The European Tour, we brought in UBS to sponsor in Hong Kong. That was a two-year negotiation when they were sponsoring the UBS Warburg Cup in America, the sort of half-senior thing. We looked at events in Tokyo, events in Europe, all around the world and finally settled on Hong Kong to rescue the Hong Kong tournament which had lost its sponsor, Omega, to also to become the sponsor of the Asian Order of Merit. These arrangements have largely been concluded in European capitals, and American capitals. We have at all times thought that 50/50 exact recommendation, even when the client sponsors wanted the predominant lion's share to be European, even when we have a practice range here of European Tour Members, you would think, why can't we have the lion's share of the field. We have persuaded our players to say for the greater good, we should be 50/50. But make no doubt, if our patience is ever tested, we will do what's right for The European Tour finally because when we lose sponsors like this and we bring in other people, firstly we expect somebody to say thank you and we work for the good of all tours. The Asian Tour was introduced to the World Golf Federation on the proposal of Ken Schofield. He fought in the way that only he can fight to move them in there. And then they had arrangements with their marketing company that went into financial trouble, they brought in partners, they wrote long marketing contacts with these companies and then cancelled, changed their name; tactics that we never really followed on The European Tour. We never had to change our name to get out of any agreement with which we signed. We couldn't live through the Schofield era and my era if our word was not totally our bond. And it is, even when we make mistakes.

GEORGE O'GRADY: There are no issues with the PGA TOUR. With the PGA TOUR, every negotiation is a very businesslike conversation, and as such, we're talking to a state that is very realistic. I think changing their dates, as I've said on other interviews and occasions, Tim Finchem works for PGA TOUR, he doesn't work for The European Tour. And I work for The European Tour, as well. Ken Schofield took The European Tour into the World Federation to work for the growth and greater good for the world of golf. It's certainly been tremendous for our leading players, and most of them or co-members of the PGA TOUR as well. I'm going personally to La Costa to see, I think it's the 27 European Tour Members are who are contesting in the Accenture World Match-Play Championship to review discussions which we've been working on over the last three weeks of how we will restructure The European Tour; so that it is attractive to our leading members. And by being attractive to the leading members, I mean leading members who have a choice, who can play on both side of the Atlantic and then whatever else, you then make it attractive to the people who are coming along underneath. You know the guy that wins the Qualifying School last year could be tomorrow's major champion. So everything we do, everything about getting tournament conditions as good as we can get, as good as we can get for everybody on the best possible courses, that's our ambition. But we want to get our promotion strategy right. Yes, we have to embrace America, as good as it can be. There are certain players on The European Tour who did not have the same profile that they now have, Graeme McDowell, Brian Davis, Greg Owen. And it's tough to play both tours if you're not in the world's Top-50, but we are giving many people a chance. Justin Rose I think has rejoined and has come back. You look at the level of play now on what The European Tour has done to grow players of all different nationalities. Henrik Stenson who is coming off his win, almost certainly on The Ryder Cup Team and now we have some of the more established players fighting to play with him. And then behind him, there's going to be other young Swedes, young Italians, an Italian amateur wins the U.S. Amateur championship this career, a tremendous future, he's going to play a few events, Edoardo Molinari. And this is what gives you the confidence, the international setting for European Tour events.

GEORGE O'GRADY: I think you have to, as I've said before, recognise the tremendous promotional power at the moment of the PGA TOUR. They certainly have the No. 1 player in the world, who is American. They have to shape their television policies their way. We have to fight to make The European Tour better at certain key parts of the year. We can learn an awful lot from how the PGA TOUR go about their business; imitation is the most sincere form of flattery. For us to be strong and stand at the table, we have to be an operating business and then we can really structure The European Tour in the way we want to. We have some enormously powerful people coming beside us at certain times of the year, and our job is to really keep the Tour going as strong as we can in the tougher weeks.

GEORGE O'GRADY: No incentive at all. We are not using that as a method of force; that is not our game. Our game is to say you've got a choice and encourage them to consider and see what we're doing. There's a new idea put to me last week by Ernie Els by how we change the world schedule of dates, which I'm certainly man enough to say I had not thought of myself. But the best idea is sometimes the simplest. And the idea he put to me was so -- it took me a nanosecond to see this is workable, as well as a couple of other people here, and we have a wave of support of how we can make it happen. Of course we need to refine the idea before we can go public but Ernie has come up with the idea first and he's got several of his level of players thinking it's a good idea on top. You're starting off with quite a good mark. That is the strength of these last three weeks, and I think we would do it and I would refer back to the question before we've embraced the Asian Tour support of Qatar. I've just been with the chairman of the Qatar Golf Association, and they share and want a position in that tournament, and with Mohamed Alabbar who runs this one, as well. If we can think in the right way and understand what these regions are trying to do, what their sponsors are trying to do and position themselves, it's the brainpower and the thought is what's going to get us through. I haven't got the brain for all of that, but I tell you, some of our leading players do very, very clearly and that's what we've been trying to do is we've known the American changes were coming. Every single -- try to get to as many players as we can, but certainly starting at the top, and they have all embraced, we have contacted every player in the Accenture and they have all agreed to come for an early chat, no more than that, a chat on the way forward. THE PLAYERS Championship is at $8 million when they move, and we are certainly not going to say to our players, you are not released to play in it, it's lunacy. But THE PLAYERS Championship coming to May presents us with challenges.

GEORGE O'GRADY: It's not for me to say what the PGA TOUR is thinking. They can say that for themselves and I certainly would not put words in their mouths. They are very much aware of the way of the world, the fact their main finish is going to finish on Labor Day, means there are months when top players will have been contacted by the PGA TOUR on how their way forward will look. I think there's a question of how you get on with people in those territories, and certain American players have travelled. They have had the license to Tour Golf Courses outside of America; haven't had it in Europe, and they certainly know where the rest of the world is. They have a Presidents Cup which has travelled to South Africa and Australia. And they are going further internationally next time, they are going to Canada.

GEORGE O'GRADY: I think at the moment they get their own players into it. So it's a big achievement to have players, and for them, possibly their players can break into the PGA TOUR that way, which to a lot of professional golfers, is I guess like the Holy Grail, if you're good enough. And the Tours market their TV rights back in their own territories is a strength for Japan, especially if you've got Japanese players in the field. I think this is the first time they have all been in America, and it's not ideal. We have our discussions with the PGA TOUR and I don't think we wish to go any further; that will remain within the boardrooms at Sawgrass and at Wentworth.