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ADT CHAMPIONSHIP

November 19, 2008

Carolyn Bivens

WEST PALM BEACH, FLORIDA

CAROLYN BIVENS: Good morning. Thank you for joining us here today. As we conclude what's been another exceptional and exciting season on the LPGA Tour. This week we'll watch some of the greatest golfers in the world display their superior talent and their passionate performances on this spectacular golf course.
This weekend when the final putt drops, we'll hand over a million dollar first prize for the winner of the ADT Championship and the LPGA Playoffs 2008.
As we reflect on 2008, and we look at 2009, it's imperative that we maintain a focus on our primary strategic pillars. The LPGA spent over a year working through a strategic plan that was approved by the board of directors last year. Those pillars include economic empowerment, taking care of our members, by providing market-based playing opportunities for our members as well as opportunities inside and outside this organization. This is the essence of the mission of the LPGA.
Total entertainment experience, taking care of our fans. We will continue to provide one of the most compelling on-course products, superior value for the entertainment dollar and unrivaled access to our sport and our members. No other sport, no other sport delivers what we deliver at our events, on TV, online, and through other mediums.
Equity is the next pillar. We're a member organization, and we will continue to expand the menu and the value of the benefits provided to our members. Moving closer to the equity they deserve and they need.
Exposure. Television continues as the mainstay of LPGA exposure, and we continue our pursuit of a platform that delivers consistency of schedule, quality of telecasts and destination viewing.
Executional excellence. The standard by which we hold ourselves and our stake holders. As we come to the close of another LPGA Tour season, I want to briefly share some of the accomplishments in this past year, while also taking the time to look forward at 2009 and 2010 as best as anyone can predict in today's environment.
The strength of the LPGA begins with our members. In 2008, the women of the LPGA demonstrated that they are among the best golfers in the world. They've shown that the depth of the talent on the LPGA Tour is unrivaled in this game.
This season, nine tournaments were won via playoffs, and ten were won by only one stroke. We've had 18 different winners, and eight Rolex first-time winners.
Some of the game's greatest performers, like Lorena Ochoa, Paula Creamer, and Annika continue their exemplary play while young players like Yani Tseng, and veterans like Helen Alfredsson challenged at every opportunity.
The talent of the women on the LPGA on the course is matched only by their generosity and spirit of giving off the course. Yani Tseng, Louise Suggs Rookie of the Year, donated $50,000 to the Renewal Foundation USA to support high school students in China so they could continue their education in the aftermath of the devastating earthquakes.
Reigning U.S. Women's Open Champion, Inbee Park contributed $50,000 to the LPGA Foundation to support USGA, LPGA girls' golf programs. And of course, as many of you know, the number one, Lorena Ochoa has spent an enormous amount of time, money and her energy on the foundation and her academy to help create a better life for children in Mexico.
We were extremely proud when Lorena was named by "Time" magazine as one of the 100 most influential people in the world.
Val Skinner, Cristie Kerr, Morgan Pressel, Colleen Walker, Marcy Hart are among the many members who raise money for breast cancer research and awareness. Beth Bader established a foundation and is raising funds and awareness to cure for pancreatic cancer.
Betsy King continues to lead a member initiative, Golf For Africa that's dedicated to bringing hope and support to the children in Africa who have been orphaned or made vulnerable by the AIDS pandemic. She's also a member of the president's council on service and civic participation.
I could go on and speak about what the LPGA members do off the course for their communities and for the causes that are near and dear to them, these are merely a few examples of why our athletes and our members are role models.
On the business front, we've worked throughout 2008 to integrate the Duramed FUTURES Tour. The LPGA acquired the Duramed FUTURES Tour in 2007, and I can't overstate the importance of the acquisition of the Duramed FUTURES Tour for the future opportunities for the LPGA.
This important pipeline has seen more than 300 Duramed FUTURES Tour alumni become LPGA members. 17 of the 35 winners this year are Duramed FUTURES Tour alums.
From 2003 to 2007, 83% of the graduates who earned their tour card in this manner maintained their LPGA status for at least two seasons. It is the best pipeline into the LPGA.
This year we successfully implemented the game's first drug testing program. Our members have worked hard to understand the banned substance list, and the actual process of the test itself.
For many players who are overage 30, this was their first experience with drug testing, others experienced it during their college days with the NCAA, but all were committed to making it work.
This is the first season that we've had a full-time agronomist, John Miller the Golf Course Superintendent's Association. He helped improve the overall golf course conditions and the venues on which the LPGA plays. You'll see more of his work in the future. It benefits not just our members, but also our fans and our sponsors.
We announced in June that effective in 2010 the LPGA will own and operate the LPGA Championship, making the first time in our history that the LPGA will own one of our majors. That adds to the important asset base and the value of the LPGA.
An important aspect of our future financial stability for the LPGA includes owning and operating and benefiting from the few properties that we control.
Again, I want to publicly acknowledge and thank Herb Lotman for his and his team's longstanding support of building that major into a wonderful event that has a great legacy. In particular, the 15 years that they were keepers of that championship.
Our work with other allied associations continues this year, and I was proud to join other leaders from our sport as we met with the International Olympic Committee in Switzerland as part of our efforts to get golf added to the Olympics in 2016.
The impact of golf becoming an Olympic sport will offer more women the opportunity to learn and to compete than any other single effort we could undertake. It is an enormous opportunity. The LPGA's diversity and the popularity worldwide can play a critical role in leading us to another historic milestone for our sport.
As stated in September, the LPGA leadership has been talking with a variety of organizations and specialists, coast to coast, regarding our important cross-cultural initiative. We're finalizing the agreement with experts who will, along with LPGA constituents, lead the review and development of guidelines and the criteria for our initiative.
Our intention is to develop a cross-cultural program, in addition to a language policy that will be inclusive, and meet the diverse needs of all of the members of the LPGA.
Performance at the LPGA is more than playing golf. The founders embedded that belief in the five points of celebrity way before the LPGA actually spelled out the five points of celebrity.
Our program will be true to preparing and empowering our members to compete successfully in business globally. Bottom line, our primary goal and intent is to do the right thing by our entire membership, our sponsors, our fans, and the golf community at large.
To better reflect the global nature of our business, LPGA governance was amended in 2008 with the addition of an international player to our director board. The LPGA board of directors drafted an amendment to the constitution that would establish a seat on the board on of directors for a player who has elected international member status, and this was approved in May by the board of directors and the Tour membership.
At the final player meeting of the season in October, Helen Alfredsson from Sweden became the first voting international player director.
We've worked extremely hard the past two years to ensure that we continue to improve on the value that we deliver, and acquire assets that are of value to our current sponsors as well as our perspective companies. In doing, we're attracting new sponsorships and new companies.
We're proud that just this year we signed with Stanford Financial Group, Proctor & Gamble, as well as Kapalua, Bell Micro, and Grand China Air as title sponsors. We also added to the marketing partnerships with Blue Diamond Almonds, Dry Grip, and Mirassou, and renewed our marketing partnership with Anheuser Busch.
We've made significant progress in our efforts to restructure the LPGA business model. This year we were able to provide greater resources for player services and still return a profit to the organization. The financial rewards are not just for the LPGA, but also for our partners.
This year the LPGA generated more than $2 million in cash for the Tournament Owners Association. This was a 40% increase over 2007. The additional funds were generated as a result of the new television revenue share agreement. Renegotiated international right contracts, marketing and sales programs where the LPGA passes the funds directly from our sponsors through the LPGA to our tournaments.
While we're very pleased with our 2008 accomplishments, it's no secret that the road ahead, particularly 2009, is going to test our metal. We face real challenges. The greatest of which is faced not just by other sports and entertainment organizations, but by every business enterprise of any kind in all corners around the world.
And who among us knows how the economy will really perform in 2009, much less in 2010. This includes our friends Ginn who have reduced their commitment from two events to one, and want to focus their energy and efforts to make the 2009 Ginn Open in Orlando the best entertainment experience in central Florida.
When our valued partners at Safeway decided to consolidate their sponsorship and focus on their Portland event, we needed to ensure the continued presence of the LPGA in Phoenix.
We're pleased to confirm that with joint efforts between the LPGA, and Tournament Golf Foundation, the LPGA will return to Phoenix in March.
We're still working through the final details of the event with the Tournament Golf Foundation, details we'll be in a position to discuss more in the future. But today we will confirm we will be returning to Phoenix. It's a favorite tour stop, and one of the great tour stops in a great city in this country.
Each and every year, the LPGA schedule evolves with an avid flow of events, but like many businesses and individuals, the state of the global economy, and the economic crisis we're all facing has resulted in a slightly different tournament landscape for 2009.
It's not something that comes as a surprise to those who have followed the news of all of the sectors impacted by the economic crisis, including the sports and entertainment industry.
Today we're announcing the LPGA's official money event schedule plus the Solheim Cup. We anticipate that we'll have an unofficial money, sanctioned tournaments in the postseason in 2009, and we'll talk about those over the course of the next few months.
Let me begin with one of our shining stars for 2009, and remind you to join us in August 2009 as we host the Solheim Cup at Rich Harvest Farms outside Chicago. We look forward to players vying for the spot to represent the United States and Europe in the return of this spirited and one of the premier competitions in the world.
As was announced by CN earlier this year, the 2009 CN Canadian Open will feature a $2.75 million purse, that's a $500,000 increase from 2008.
The Stanford Financial Tour Championship will be played in Houston, and will feature a $2 million purse to conclude the 2009 event. Stanford Financial has stepped up with a major increase in commitment to the LPGA.
As far as LPGA official money events in 2009, we'll have 31 official money events. So you don't have to count. That's versus 34 in 2008. Given what could have been the potential negative economic impact on our schedule, we view this as a barometer of stability, appeal, and value for our players and our property.
Players will compete for nearly $55 million of official money. Again, so you don't have to add it up, that's down from a little more than $60 million in 2008. The average prize money will be $1.767 for those of you taking out three decimal points. And that's similar to this year, which was a little more than $1.77.
Finally, I will note that we'll return after a one-year hiatus to Thailand for a tournament sponsored by Honda. This was a deliberate move to create a more desirable geographic flow in 2009, where it will partner with the HSBC Women's Champions in Singapore. That's only a two-hour flight.
We're working to finalize a new television package for the U.S. that will provide the future LPGA with the kind of platform for exposure, coverage, and awareness that we think fans, sponsors and the organization and our members deserve with consistency being one of the cornerstones.
In our pursuit of equitable benefits, despite the economic challenges, the LPGA is in strong financial condition, stronger than it has been. The work we've done on the business model over the past few years has fortified the organization, enabling us to better navigate through the economic realities of this marketplace.
I wish this economic downturn had waited one more year. I wish we'd had one more year, but I'm grateful that we had the past three.
Our 2009 budget plans for a solidly profitable year. A continued high level of contributions to our member benefits, including a 25% increase in the pension fund contributions.
If we had not undertaken the substantive changes to the business model of the LPGA during the previous three years, our picture would be decidedly less hopeful.
In closing, I would be remiss if I didn't end my remarks this morning taking just a few moments to reflect on a career, the career achievements and contributions of one of the greatest golfers in history. One of the greatest athletes in history, and one of the greatest role models in our sport.
This woman in particular is owed a significant share of credit for the performance, and the organizational milestones that were achieved this year, and for much of what the LPGA has accomplished during the past 15 years as an LPGA member, and that would be Annika.
She continues to set the global bar for excellence in all statistical categories, and yet to judge Annika only by her on-course performance, is to miss the essence of a woman who is the ultimate role model. She's set an incredible standard for the talented young contingent of players who are following in her footsteps on and off the course.
While we'll miss her in our tournaments and on our leaderboards, we will look forward to her continued contributions to the game.
As Annika begins an exciting new chapter in her life and in her career, we're also eager to enter a new chapter with Annika, who will always remain one of the LPGA's and one of our game's greatest ambassadors.
I'd like to thank you for your time and attention. Those are our prepared remarks today. I will take questions from the floor.

Q. Did you try to talk Annika out of not retiring?
CAROLYN BIVENS: I think everybody has tried to talk Annika out of retiring. At the same time, you're pulled by the fact she's a young woman who knows very much what she wants, and she has priorities. I think you've got to admire her and respect her for that. We'll miss her very much.

Q. What was it like for you trying to sell the tour for '09 and '10 without her being here?
CAROLYN BIVENS: You know, the question was what was it like to sell the tour without Annika going to be a part next year. Annika's a very big part of the past 15 years. And as I just said, she's a very large part of the accomplishments that the LPGA has made and where we are right now.
At the same time, the depth of our talent and the breadth of our talent, and the globalness of our talent is one of the biggest attributes. It, frankly, is our pull for differentiation right now.

Q. Can you discuss this event and its future? Where it's going, when it's going?
CAROLYN BIVENS: Yes, and no (smiling). We are very sorry to see this event go. However, this event was not ever on the 2009 schedule, regardless of what has been reported.
As part of the strategic plan that the LPGA built over the course of the last couple of years, we've always planned for 2010. We've talked to you all over the course of the last couple of years that contracts were all set to expire in combination with television. It's very hard for events to contract past the existing television contracts without knowing what the new event or what the new deal, if you will, is going to be.
So there's nothing new about that. What we have wanted is we've wanted a season-opening event and a season-ending event.
As a membership organization, one of the things we struggled with over the last few years is the last standard of eligibility, which is our new term for what you all used to call full field events, was at Long's Drug. That's pretty early in the year. So there's a lot of women that were left out of our season that doesn't finish until November.
We were able to add Kapalua this year, to be able to add a season ending championship that offers more earning opportunities and offers a more traditional season ending event is one of the things that we think will serve fans, and it certainly has served Stanford Financial. They're a great partner in this and we wanted the same things.
This event and reprising the top money winners of the previous year is a wonderful way to start off the season and to pull our fans back in and reintroduce the top players from the previous year.

Q. Are you searching for a title sponsor?
CAROLYN BIVENS: There are several companies who are right now the single elimination format, this event, is in front of as part of the marketing package, yes.

Q. The nature of changing the big payoff to the beginning of the year. Obviously, it affects the money list. Can you just tell us about your decision of why to move it to the beginning?
CAROLYN BIVENS: For several reasons. But it effects the money list as much as having it at the end of the year. Somebody wins a million dollars. And frankly, I hope five to ten years from now, somebody's standing up to you and talking about $9 or $10 million events, and that this event would have a purse of $2 million.
I know that people say you shouldn't compare the LPGA to the PGA. I actually believe these girls really do rock. I believe these girls are great, and I believe this is a great value proposition, and that's where we're growing.

Q. Would the format for the tournament, this event, I want to call it ADT, it won't be ADT anymore?
CAROLYN BIVENS: We all will for a long time.

Q. Secondly the China event, the China Air event that was added late in the year is a TBA here on the list. Could you elaborate on the details there going forward?
CAROLYN BIVENS: Yeah, as a result of the Olympics in Beijing this year, and the government is a partner. The China Golf Association, IMG is also our partner in that there are a lot of entities and things don't always move slowly. Until we're just really positive we're going to put a TBA, we expect the China event to be back there.

Q. The format the same?
CAROLYN BIVENS: The format's going to be exactly the same. It's one of the other things we're grateful to ADT. They were courageous in working with us. This format is one of the most compelling. We'll keep it the way it is.

Q. I was wondering if you could comment on drug testing. I know you changed companies earlier in the year. You talked about it in Kraft, and how the new company handled the situation, and how many times you tested this year, how many weeks and why it was a success?
CAROLYN BIVENS: We're very happy with our partner in drug testing. But no, we won't comment on how many times we tested, how many women were tested, no.

Q. Did you announce people who flunked the test?
CAROLYN BIVENS: No. The way the program works, until someone was all the way through appeals, there would not be an announcement.

Q. Back to the schedule. Beginning with the Women's Open all the way through perhaps the Safeway Classic, there are some events in there, one, two, perhaps even three that a lot of players may not qualify for, which would leave some pretty large gaps within the schedule. Is that something you're working to try to fix in future years and are you only uncomfortable with the fact that some players could go as much as a month without any play?
CAROLYN BIVENS: Sure we're uncomfortable with that. We want to fill the holes. And there's actually a concept that we mentioned briefly last year. It's called the challenger series. It's something that we have in front of companies right now and are talking about a challenger series event.
It is one that would incorporate some of our Futures Tour players, some of our Hall of Famers or veteran players who are no longer playing. Some call them legends. I prefer not to call them seniors. I'm actually older than a number of them. But the veteran players, and somewhere in the neighborhood of 40 to 50 of our current players. And they would be held either in some of those open weeks, or they would be held opposite limited field events.

Q. But nothing for next year as of yet?
CAROLYN BIVENS: There may be.

Q. Can you just update us on what are your pursuing TV rights fees? And how this economic climate effects that plan?
CAROLYN BIVENS: You can't negotiate television in the media, but I will tell you this, it's a very important part of -- it's an important aspect of women's sports. It's incredibly important to the LPGA.
We can have the very best players in the world, the most dynamic, charismatic players and the people don't see them. You don't increase the value. It's also very difficult for an organization to operate and for -- there's a phrase that's been thrown around a lot this week, a price-value equation. It's very hard to have price-value equation when you're underwriting all of the costs of the television time as well as of the production.
So we have to be able to show our value. That's number one. Number two, I would say I would put it as (1a), and that is it is so difficult to find the LPGA telecast right now. Consistency of viewing is extremely important to us.

Q. Given the nature of how TV is changing, the number of choices, is network TV as important?
CAROLYN BIVENS: That's an interesting question. The question is is network TV as important?
I think network TV for the foreseeable future be important. The most important thing is consistency of viewing, so the people know where to tune in, and when to tune in. You're not going between trying to find which channel it's on. And trying to find out is it on at 9:00 at night or 1:00 in the afternoon or is it not on?

Q. The climate, has that affected your -- how much is that effecting your rights fee for 2010?
CAROLYN BIVENS: I would say that the climate -- for those of you who really know the advertising on the sales side of media, you know that most rights fees or even revenue shares are underwritten by a guarantee that the organization is going to deliver advertising dollars.
From that respect, it's something that concerns the LPGA less than it would our television partner. We say that we will provide X-amount of advertising to them. So that's a concern for the LPGA.
The value of the LPGA and the content of what we provide is good, even in this environment. It is appealing to television partners.

Q. The Stanford event is that no longer a Pro-Am?
CAROLYN BIVENS: That's correct. It's no longer a Pro-Am.

Q. And secondly, the move to Houston, was that strictly a sponsor option or did something not work about South Florida or Turnberry Isle?
CAROLYN BIVENS: We loved Turnberry. But at that time of year Stanford Financial would like to play at their North American headquarters location. And frankly, we want to be back in Texas as well.

Q. As you look past '09, and into whatever's on the drawing board for '10, would it be proper to characterize it maybe as a bit frustrating just because no one knows if we've hit bottom yet? No one knows what will happen in '09, the uncertainty over TV? Is this a particularly unsettling time, a frightening time for you in any respect just because there are so many blanks still on that drawing board for '10?
CAROLYN BIVENS: Make no mistake. If any of us could choose, we would not choose to be faced with this economic crisis. Having said that, for organizations who are agile enough and analyze their strengths and their value, there's actually great opportunities to come out of this better off than we went into it.
What happens in this kind of an economy, there's no renewal for anything. For any expenditure in any corporation that is automatic. Everything gets reviewed. That means whatever sponsorship dollars are being spent, however marketing dollars are being spent, yes, you get to value it based on the what the corporation is going to do and what their objectives are.
It also means you get put on the consideration list where somebody may have to cut or is reevaluating saying, Wow, maybe I'm paying too much for this. What are my alternatives?
The LPGA is getting put on consideration lists that we weren't on a couple of years ago. That doesn't mean that it isn't tricky to step through this.

Q. If I recall correctly, think there were going to be some serious tweaks to the English proficiency policy. Is there anything can you update on that or when we can expect to hear some something?
CAROLYN BIVENS: Let me go back and reprise a few of my remarks and say performance at the LPGA, and frankly, the survival and ability to succeed here is more than performing on the golf course. The international nature of our tour offers us great opportunities and it also offers us challenges.
As we went to benchmark best practices in this area, there is no other program that exists like this in a sports or an entertainment world. What's come out of all of that is offers in some cases for some pro bone owe work from some pretty impressive groups and organizations, and we're taking them up on it.
So we're actually going to make this more extensive than we'd ever intended to in the very first place. And our goal is to come out of this a year to 18 months from now and have a model program.

Q. It's the first time in a dozen years there won't be a South Florida event. Can you address the importance of this market?
CAROLYN BIVENS: We live in Florida. We love being here, and we will endeavor to be back in South Florida.

Q. What, if anything, has been the difficulty in getting tournaments to establish in South Florida, and in some cases to stay in South Florida, or Florida in general?
CAROLYN BIVENS: Florida and California are both states that are near and dear to my heart. I have ties to both. Both of those are areas that have -- that don't have an extensive corporate headquarters base. And as you know, putting together a schedule takes a lot of elements coming together: Corporations, the golf course, the availability of the golf course, the availability on the schedule.
THE MODERATOR: Thank you very much.
CAROLYN BIVENS: Thank you all. Enjoy the week.

End of FastScripts

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