WGC NEC INVITATIONAL

August 27, 2000

Joe Barrow

Tim Finchem

Ty Votaw

COMMISSIONER FINCHEM: Thank you, Bob. Thank you all for coming and joining us for this announcement this morning. As you know, in November of 1997, we announced a new initiative called The First Tee. We did it in Central Park and in Detroit and in Houston, Texas, with President Bush, the honorary chairman of The First Tee. And we said at that time that our first-phase goal was to try to get 100 First Tee facilities in production; that is to say, under development by the end of 2000. Today, Joe Barrow will be giving us a very special announcement about this first phase ever. The purpose of The First Tee was primarily to create affordable, accessible places for kids and other people who had not had access to the game in the past to become interfaced with the game. We recognized in 1997 that each year only two percent of kids throughout the United States have the opportunity to interface with the game of golf. The average age of golfers in the United States is 29. Minorities constitute only five percent of our nation's golfers. And the vast majority of golfers come from households with incomes in excess of $50,000. A significant amount of our population, a significant amount of our society had not had, and has not had, the opportunity to access the game because of geographical constraints, constraints of costs, constraints of just not -- the number of facilities that need to be available; and we wanted to change that. We also wanted to take advantage of the tremendous growth and interest in the game, primarily among young people and women, that we've seen over the last ten years, and which has certainly intensified dramatically in the last three or four years with Tigerand the other young players coming on the scene. And as we set out on this course, and we will -- as Joe will announce in a few minutes -- talk about how we have done in this first phase. Then we need to set our sights on the second phase. And as most of you know, we have scheduled a special week at the World Golf Village in November called World Golf Foundation 2000, during which the third annual meeting of The First Tee chapters from around the country will be conducted during which we will have an industry-wide conference call Golf 20/20 which will analyze First Tee and other potential programs, and we'll talk to and speak to what the game of golf and the industry of golf should be doing over the next 20 years, to grow the game; and during which, a number of other activities will occur, including the World Golf Hall of Fame Introduction Ceremony. We'll have eight inductees on Monday, the Hall of Fame Challenge. We'll have a special tournament, Certainteed for Hall of Famers and an LPGA breakfast with Player of the Year, Rookie of the Year, scoring leaders and among other things that week. We invite you all to come. When we announced First Tee and structured First Tee, we did it as a stand-alone part of the World Golf Foundation, with its own direction, and its own management. At that time, we designated Tod Leiweke, the first Executive Director of First Tee. He has now, of course, been replaced by Joe Barrow, who will speak to us in a few minutes. And the structure of First Tee was organized so all of the major organizations came together to create an Oversight Committee. And that Oversight Committee essentially serves as a Board of Directors for First Tee at the national level. It is represented by PGA of America, the Augusta National Golf Club, the United States Golf Association, the PGA TOUR, and the LPGA. nd we're delighted to have with us today the new leader of the LPGA, a young man who is doing great things with the LPGA. And we are delighted that he took a few minutes off -- a few hours off from his duties with the LPGA to join us today and make a few comments. I'm delighted to introduce the LPGA Commissioner, Ty Votaw.

TY VOTAW: Thank you, Tim. On behalf of the other organizations that are part of the Oversight Committee, I wanted to say a few words about how committed each of us are to introducing the game of golf and its inherent life lessons and values to the youth of this country. The LPGA, as many of you know, has had a long history and a long-term commitment in supporting junior golf initiatives, starting in 1989 with the Los Angeles Urban Youth Program, where we were able to bring the game of golf to disadvantaged and minority and urban. And since that time, we have been able to expand that program to communities in Portland, Detroit, Wilmington, Delaware, and Atlantic City, New Jersey. We are very proud of the fact, to have contributed from the curriculum of these programs of First Tee, each of the Oversight organizations have contributed, resources both tangible and intangible, time, money, curriculum, and success to the First Tee. We are very pleased to play a part of that in a very small way. I'd like to thank Tim Finchem and his leadership in bringing the various organizations of the Oversight Committee together to make this an overall industry commitment. Without his leadership, I'm not sure that all of the organizations that are part of it and all of golf that's part of the conference in November , the 20/20 Conference would not be there without Tim's leadership. And I want to thank him personally on behalf of all of the other committee members as well. We are pleased to play a part of The First Tee, through the Oversight Committee, through our urban young programs and through our other golf initiatives. And we're very excited to be part of this announcement today. And with that, I'd like to introduce Joe Barrow, the National Director of The First Tee, to make our announcement this morning. Thank you.

JOE LOUIS BARROW, JR.: Good morning everyone. It's nice to see everyone. How are you out there? I'm delighted to be here. As you know, I joined The First Tee the 1st of April and inherited a wonderful program with a tremendous commitment of people and enthusiasm about the concept of The First Tee, not only with the staff of the national headquarters, but all of the people working in the chapters -- public, private partnerships, corporations, and organizations throughout America that have embraced The First Tee concept. So with great pleasure, I am delighted to indicate to you that we are pleased to announce that there are 129 facilities, chapters under development, which exceeds the initial goal that was set by some 29 facilities. And we have them in three different stages, which you'll see on the slide. We have 58 facilities in Stage 1, which is preliminary development. And that is normally organizing the committees. 501(C)3's, developing relationships with the cities, counties, state in terms of the grounds. And from there, we move into Stage 2, which is 36 facilities; and that area, the ground is being developed, the sites are being found, and they are under construction. And we are very pleased with the 35 facilities that are opened in Stage 3 and operating. And we have an additional 16 scheduled to open by the end of the fourth quarter of this year, and 15 of those 58 and 36 to be opening in 2001. That could not have happened without a significant level of impact and enthusiasm, because people believe that the cause of The First Tee, the direction of The First Tee, really is to impact the lives of kids who otherwise would not have the access to the game, as well as, I think individuals. (Referring to slides.) You will see the 129 facilities, where they are located. We have an awful lot of concentration, as you will note in the Midwest and to the East. As we think about Phase 2, which will be discussed at the annual meeting in November that Tim mentioned, we are thinking about how we expand the concept in the west, and west of the Mississippi. We are very excited about the impact and what's happened, and the dots reflect the various stages that we're in. And these slides are also in your media packets. And finally, we'll just show you the list of some of them. And these are some of the 35 open facilities, where they are located. These facilities, as you can see, and you saw on the previous map, are in some 38 states around the country, as well as Canada and Puerto Rico. In Ohio here, we have facilities in Akron, Cleveland Columbos, Asheville, Canton, Cincinnati, Dayton -- all the areas that we're discussing and opening them up. It's a phenomenal activity that's being received. The sites range from three holes and a practice facility, and six holes and practice facilities. We are now in the process of assessing how many kids have actually participated in the program this year. The final counts are not in yet, but we are probably going to estimate somewhere in the neighborhood of 20,000 to 25,000 kids have been introduced to the game this year through First Tee facilities. But that number will be finalized, and we will be able to communicate that specifically in November. As you know, some of the programs are finishing up this year, and some programs are continuing as well. One of the key components of The First Tee is not just to introduce the game through the facilities and what's happening, but really to impact the lives of kids. And one of the concepts that we have introduced is something called Life Skills. How do we introduce and let kids understand the inherent values of the game: Integrity, honesty, commitment, tenacity, dealing with adversity, dealing with those when you are dealing with others. And we had a camp, The First Tee Camp at Colbert Hills in Kansas State, where we had 123 campers in the summer, along with 30 site leaders and golf professionals. And some of the curriculum we talked about was setting goals, and setting very specific goals in life. For instance, "I want to lower my golf score." Well, if you shoot an average of 89 to 87, does that mean you want to go to 85, or you want to reduce is to 75? And if you want your average to go to 75, do you want to do it within one year, or do you want to do it within that season? So really asking kids to be very specific in terms of their goals. Conversely, if a kid says he wants to increase his grades, when does he want to do that? Does he want to do that in one year, or over the same semester? Does he want to have his average go from a C to a B, or a B to an A? The skills we are teaching, in terms of challenge and specificity of challenges on the golf course, we thinking of skills used by every one of participants in the First Tee Program in their daily lives. And that's a pretty exciting concept, not only to introduce kids to the game and let them have an appreciation for it, but let them use some of the things they learn as they set their goals for the first of their lives. So we are excited about it. This is an important year for us. We are assessing and doing a full analysis of Phase 1: What is happening, what can we modify for Phase 2 as we go forward? And all those conclusions and all of those comments will be made as we meet with our chapters in our third annual meeting on November 15, which is a critical next step for us as we look to Phase 2 and how we are going to impact the lives of kids around this country.

JOE LOUIS BARROW, JR.: I think there is no question that Tiger has had a tremendous impact on the game of golf and the enthusiasm of the game of golf. I think the fact that cities are more readily wanting to donate ground and contribute ground to golf facilities, I think just recognizes some of the impact that he has had and the fact that golf is a game for all, and it should be played by all. And when you tie in the fact that the value is what really triggers many of the communities, the fact that we're sharing the game of golf with kids and sharing the values of golf. So, the public/private side is really the function of the vitality and interest in the game, and people recognizing that the First Tee and Life Skills components of The First Tee is different from just teaching them the technical aspects of how to play the game. So I think that's one of the reasons why people are very interested in participating. In addition to this, we have probably another 100 or so communities that are not on this list that have expressed an interest in a First Tee facilities. So we are going to be looking at how we satisfy those needs in Phase 2, because that takes time and dollars, but we want to make sure The First Tee programming is made accessible to the kids as soon as practical.

JOE LOUIS BARROW, JR.: One of the things we are asking our design group at the Tour is to look at a platform of 50 acres and a platform down to 35 acres and really be able to provide the communities with a very explicit direction in terms of what can be done with this size of ground. I was very fortunate to go to Columbia, South Carolina, for the announcement there. And that ground is right in the middle of an urban area, and kids can literally walk out of their houses and got to the practice facility. Across the street is a nine-hole facility, and there is a collaboration with the city, HUD, and a lot of different organizations, implementing that project. And the challenge is to get the configuration of the ground and the facility, which normally has a practice facility, three to four to five holes and a 2,400-square foot learning facility where kids will have access to computers, computer games, computer knowledge, and we're going to take that to a higher level as we look to the future. But that's the critical challenge is to get the ground so that we can take pockets within the communities, because we want them to be accessible. And when you think about it, the key is to be able to let them go to their golf course, almost as simply as they can go to the basketball court. And that is a challenge, because we require more ground than a basketball court, and having said that, we are working hard to deal with that.

COMMISSIONER FINCHEM: I'm not up to date but Mr. Patino says it is moving forward nicely and invited me to come out and observe the facility. I'm going to go over there in a few weeks at the end of October. I can't give you any data, but we're pleased that that's The First Tee facility in Europe and I gather it is coming along fine. But I'll find out for myself at the end of October.

COMMISSIONER FINCHEM: The answer to the first question is I guess so. I think The First Tee came out of the fact that the golf organizations had come together, they had done the Hall of Fame in 1996, that was pretty much done and we were looking for something to help stimulate and grow the game that we could do together. On the other hand, whether or not First Tee would have gotten the level of reaction, particularly amongst public sector that it has, the answer to that is probably no. And what we have found is that clearly for these facilities to come together, it has to be an across-the-board partnership in the community, public sector and the private sector of the golf schools and others. We'll see when Joe gets into his long-term plan in November. The answer to your second question is if you're going to generate thousands and thousands of more golfers, where are they going to play? That's a good problem to have, first of all. Secondly, and we assume that the market is going to react as it has over the years -- we have been building golf courses at a rate of more than one a day now for the last four or five years. That's because the market is there for those golf courses. We are seeing an increase in middle to lower fee -- daily fee, such as in southern Florida and Arizona, there are probably too many of those golf courses for the current level of demand. We are seeing more municipal golf courses being built. And as the sport transitions to a mass sport, the market will meet the demand in our judgment. I'd also point out that as Joe -- as Joe mentioned, the reason for The First Tee is not just solely to generate more golfers. I mean, if you can take a kid and get them into golf for a period of time, that is going to be a positive thing on that kid, regardless of whether they ever play again. So the Life Skills-- from a Life Skills standpoint, you ought to talk to these mayors who are looking for First Tee facilities in their community, that is their focus. They don't really care whether this kid gets his grades, goes to college and then plays every week on Saturday with his or her buddies. They are interested on the impact on kids now, and that is a very important part of program.

COMMISSIONER FINCHEM: Well, we are on record with the Federation. The Federation has gone on record as each of the Tours involved in the Federation has expressed a very strong interest in First Tee, in developing First Tee and their particular spheres of influence around the world. On the other hand, all of the focus of First Tee, or virtually all of it, during this first phase was to demonstrate that this is a viable concept, get some operating experience, and to take that and do a long-term plan in the United States and then see what potential is out there, outside the United States and around the world. So there has not been a concentrated effort, but it is coming, and we think it is consistent that the golf organizations will be involved in that from the standpoint of growing the game and taking advantage of what we are seeing in many parts in the world, which is also intense interest in the game -- in Asia, in particular, but other places, as well. But there is no defined game plan for that as we speak. I think the steps are we finish the long-term plan for the United States this fall; probably next year we get into some country-by-country game plans outside of the United States.

JOE LOUIS BARROW, JR.: Well, the transportation is always an issue. Many of the partnerships that the local chapters are developing are with community organizations. The Boys Clubs, Girls Clubs, YMCA, many of those organizations have transportation vehicles available to them and are using them to get the kids back and forth. That's one of the things we are learning right now is the proximity and what are the challenges to getting kids there consistently. One of the things that is important is that The First Tee teaching curriculum has four levels: Par, Birdie, Eagle and Championship. And each of those levels relate to the number of times they play golf, the instructions that they have and a final certification from the instructor. So by the nature of the curriculum in itself, it requires us to send the kids back to the golf course so they will be certified and have a First Tee card. So to that end, that is one of the challenges various chapters are facing; and speaking to Cliff's point, how do we get them closer to and into the cities. And that is something we are working on and we will get solved.

JOE LOUIS BARROW, JR.: I think it is working fine. We have some 20,000 to 25,000 kids that have been introduced to the game all across the country, and we are, as I said, right in the middle of assessing all that. So in November, we'll be able to tell you: It really worked well here and not so well there. But the fact that we've got 20,000 to 25,000 kids participating; we had 123 kids at the camps from our various chapters and developing chapters who experienced the Life Skills program and will be leaders when they go back, and the enthusiasm, we are very confident about that, and now it's happening. We worked very hard to get the facilities built, and all of the sudden, bingo, the kids are there. That's really exciting and what we're about.

JOE LOUIS BARROW, JR.: The vast majority of the funding for the local chapters comes from local investments, whether it is the city contributing the ground and local businesses contributing dollars to that 501(C)3, to then build or renovate or modify the facility, The First Tee national does contribute to the various chapters, a grant, to -- for construction, up to 100,000, and that varies from facility to facility based on the need and requirement. They do receive funds from the national chapter to facilitate that. And additionally, we have some 20 to 30 supplier relationships, which are made available to the chapters in the construction phase, from irrigation, to design to turf and so forth, and the discounts can range anywhere from 20 to 30 percent of the overall cost of the project. So in addition to the actual grant that they receive from us, which are cash dollars, they receive benefits in the development phase from the suppliers that are aligning themselves with The First Tee and providing these kind of discounts to the various chapters.

JOE LOUIS BARROW, JR.: Last year at the second annual meeting, Ed Arrange (phonetic) from Titleist announced a coalition of the equipment manufacturers provide golf clubs to the first 100 chapters. And they are now developing them right now. It will be a First Tee designed golf club and set. And we hope that they will be completed and done, and we'll have 50 sets each for our first 100 facilities. They are actually opened. Those are being paid for by companies such as Titleist and Callaway and others that will be committing to the cost of that. So they are very much involved with that -- and balls, as well. So we expect that The First Tee will continue to have the support and be embraced by the equipment manufacturers, as well as the total community of golf, if you will.

JOE LOUIS BARROW, JR.: Yes. Much of our teaching curriculum comes from the PGA of America sections as well as the LPGA. The PGA of America makes grants through its local sections to assist in the teaching of the kids. So many of the kids will be taught by LPGA and PGA professionals at the chapters who will then be embracing our Life Skills Program, etc. That is one of the reasons why we're excited to have as many PGA professionals at our Life Skills camp, just to see how they reacted to teaching the Life Skills, besides the technical aspects of how you grip the club and how you swing the club. We are delighted to hear at end of the week that these individuals who have been focused on the technical aspects of how you teach the game saying, "We think we are hitting a chord"; that the drills they are being taught and the way they are approaching the teaching of the games with the kids, they can immediately incorporate them. So the PGA and the LPGA are very much involved at the local chapters of teaching the kids.

TY VOTAW: If you look at the statistics that have been issued by the National Golf Foundation, currently there are 1 in 5 of 26 million golfers in America of made up of women golfers. My understanding is new golfers, 1 out of 3 are women. And on the junior level, 1 out of 2 are women. I think there will be more statistics issued in the fall updating those numbers. So I think in terms of the access to the game, and I think the participation levels of the game on the female side, the -- improving growth of the new market, if you look at junior golfers. The issue that we're faced with on the women's side of the game is retaining them and keeping them in the game. While it may be the fastest growing segment of new golfers, they are also leaving the game at a rate -- for a number of reasons relative to cost, time, access, how they are treated at the golf course. And those are some of the issues we are going to be addressing in November at the 20/20 conference and going forward; so that we can increase the number of female participants in the game.

JOE LOUIS BARROW, JR.: We don't. We will have it at the end of the year. One of the first things you all heard me mention was The First Tee Card. The First Tee Card will be given to all of the kids who participate in the program and reach a level of certification, the Par Level, and this card will allow us to track them. We'll be able to determine how many times they play, what their gender is, where they live, and really get a database on the kids and monitor what their enthusiasm is for the game. That card will also be welcomed at other golf courses. Those are the kinds of relationships and alliances we hope to create. And tracking how many kids are going elsewhere to play the game, and the people who welcome The First Tee card know that these kids understand the game, the rules of the game, the etiquette of the game and have achieved a certain level. So right in the middle of the work in progress and learning in progress on that one, and we'll have more specific data on that, but we are building into The First Tee Program a way to track the kids, their level of participation, and that's quite a task when you think of the number of facilities we are going to be tracking across the country. So the technological requirements, just to monitor that, is going to be pretty significant.

JOE LOUIS BARROW, JR.: I think the mission statement is to introduce the game to kids who otherwise would not have access to the game. That is in urban areas, it's in rural areas, it's in suburban areas, and I think as we see it happening, it is all across this country. So we really think that the values of golf are for all kids, who for various reasons would not have access or did not have access to the game; and so it is not just minority-focused. I was in Hammond, Indiana, and I went to the opening and there was a boy, girl, boy, girl and that was black, white Hispanic, and in a principally blue-collar area of the country. A little aside on that: It was a brown field slag area that was just steel mills, tailings, environmental agency capped it out. The city got fully behind it and they took what was a very ugly site, and now there is a nine-hole golf course for the kids. There is a practice facility, and when I went to the opening, I saw parents walking with their kids and caddying for their kids, and many of those parents did not play themselves. So how wonderful seeing that, I picked up the phone and called my office and said, "Let me describe the situation to you." And I described it and I said, "Is this what we are going to experience across the country?" And they said yes and chills came up and down my back, because now all of the sudden, we are not just impacting lives of those kids, but also their parents, who picked up clubs and started hitting as well. So The First Tee has a phenomenal, phenomenal opportunity which we will accomplish to impact the lives of youth and their families actually through the game of golf all across this country, and perhaps the world at some point.

JOE LOUIS BARROW, JR.: No age limit. Typically we like the kids to be 8 to 18 when we are teaching golf lessons. To lessen that, it requires a lot more structure and discipline, as you know. But some chapters are going younger than 8. That's a decision they will make based on their programs and abilities to teach them and expose them to the game, but generally the guidelines we set are 8 to 18.

COMMISSIONER FINCHEM: Thank you.