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TRANSITIONS CHAMPIONSHIP

March 18, 2009

Tim Finchem

PALM HARBOR, FLORIDA

DOUG MILNE: We would like to welcome Commissioner Tim Finchem into the interview room here at the Transitions Championship. Thank you for joining us for a few minutes. If you would like to start us off with a couple of comments, and then we'll take some questions.
COMMISSIONER FINCHEM: Thank you. I'll just say that I'm here for a few hours and just want to make myself available for a few questions.
I think with respect to this week, as we have been, we are very pleased with the commitment of Transitions. They may be the most involved title sponsor, or maybe one of the most involved title sponsors we have. They are very into pushing along how to make this a better tournament.
We are very pleased with the improvements Sheila Johnson and her team have made here at the resort, and are making, and of course we have always been excited about the quality of the golf course here, the Copperhead.
So I think that the tournament organization here does a phenomenal job as well, has good leadership, and treats the players very well.
So happy about this week and looking forward to the competition. Be happy to try to answer questions you might have about whatever issues you would like to discuss.

Q. Greg Norman has come out in a couple of different formats or opportunities over the last couple months to talk about maybe cutting purses as a show of good faith; and beyond that, I don't really remember much more of the detail. I wonder what you thought about that in just broad bush strokes.
COMMISSIONER FINCHEM: I've talked to Greg about it. I think that we are managing our way through the downturn the way we think we should move forward.
You know, we don't want to react to things that are speculative. Right now we've been on a course of dealing with things that we know are real, and not assuming. So I wouldn't say that we would never do that; we may very well do that.
But right now at this point, we are watching things, dealing with the issues that arise because of the economic downturn, still operating on the general assumption that this is cyclical on some basis. We are watching the long-term economic forecast like everybody else and economic indicators, and as things develop down the road, we will adjust our strategy accordingly.
I'm not assuming anything that will happen. We will obviously continue to work on strategies that relate to a worst-case scenario, and an okay scenario, and we'll see what develops.

Q. Where do you stand with the Sea Island tournament?
COMMISSIONER FINCHEM: We are continuing to work on positioning a tournament there as early as this fall --

Q. How would you characterize where you are?
COMMISSIONER FINCHEM: We get into the spring, it's probably as far as we can go to get that done. Over the last ten years or 12 years, we have done two or three tournaments in short order: The Tiger Woods Foundation partnership with AT&T in Washington was a pretty quick turnaround from decision to go to organize the tournament; Presidents Cup in '94 was pretty quick.
So, we can do it. We've got a fantastic opportunity there with the facilities. But we are just working through it. The pieces haven't come together yet, but we hope they do in the next few weeks.

Q. Do you get a sense that anyone interested in a Fall Series event might have their eye on a regular-season event in terms of -- because the economy, sponsors that might fall off?
COMMISSIONER FINCHEM: Yeah, but I don't see a situation where somebody would make a decision on that basis, on a fall event. I think that you have to make a decision on the fall event because of the fall event from the television, branding, advertising standpoint. At least that's been the case to date. So I don't see that changing.

Q. Have you been keeping track of whether players have been adding tournaments or not after your off-season pitch to maybe have them visit a couple of locales that they had not done historically? I think one of the magazines tracked it after the California swing. It's been kind of about the same.
COMMISSIONER FINCHEM: There's been some movement. I think from time to time, we'll highlight a tournament that we would like to see more focus on. There's certainly been some movement among players.
But I mean, what we said to the players was, look, we just need to execute on all cylinders this year in terms of fan relationships, media access, playing, as well, among a number of things. I think players have been interacting with sponsors. I think they have been very helpful this year; exceedingly helpful. I think they are always helpful, but they have stepped up this year. It's good.
I've said this before; year-in, year-out they do an excellent job, and that's why we are successful because of what they do. This is just making sure we are not missing any opportunities. It's not asking them to do some quantum leap off of what they normally do. It's asking them to make sure we are focused and make sure we are executing. I do think we have had a more active interface on them with doing stuff.

Q. Tiger mentioned, must have been last week, that general subject, he said something about doing a couple of things for you down the road. I didn't know if that meant public service announcements or what that was. We didn't get a chance to follow up with him. Is there any detail on that? He's harder to get to than you are.
COMMISSIONER FINCHEM: Is he?

Q. Sometimes.
COMMISSIONER FINCHEM: I think he's been quite helpful, and there will probably be a couple of things he'll do during the course of the year that will be noticed. But I think he's been quite helpful. He's been helpful by getting over his knee problem and playing, is a big help.
You know, he's one of those players, and most of them are, that get it. They understand the challenges we are under, and he certainly is of that view and he has definitely been helpful.

Q. Do you see yourself playing in any more Pro-Ams, and can you talk about what that experience was like? Was it more for just your own personal enjoyment, or did you want to see what it was like?
STEVE ELLING: He just got off the golf course and he's asking you this; he did play today.
COMMISSIONER FINCHEM: You played today? Personal enjoyment?

Q. My game's a lot different than yours.
COMMISSIONER FINCHEM: I did it for a lot of reasons, but the main one being that the CEO of AT&T asked me to play with him. So that was a giant share of the reason.
I found it educational. Particularly, I've been in this job with the TOUR, or involved with the TOUR, for 23 years, and I've never been out there for six hours, three days in a row, watching two guys grind. And it's pretty amazing to watch them maintain their focus. I was really impressed.
But it was fun. I decided the second day that I was never going to do it again, and then on the third day, we missed the cut by three shots. I 3-putted three times. Every time I did, it cost us a shot. I was furious with myself, and now I want to do it again.
So it's the same old story of all of us who play golf. The golf gods give you just enough to make you want to come back and try again. So, I would like to do it again. We'll just have to see how things work out.
It did also give me an opportunity to spend some quality time with not just Randall Stephenson of AT&T, but a number of others. Usually I'm there in the middle of the week. This time I was there all week because I was playing. We have a lot of partners and customers in the field, and that was very helpful, as well. I got a lot out of it.

Q. Have you been to more tournaments this year? And if so, is that by design because of the current climate we're in?
COMMISSIONER FINCHEM: Not really by design generally. It's been a combination of different things, different weeks. I think I've been at all but two so far, and I'm out five of the next six I think, and we'll see after that. I'm out a lot. It's a combination of reasons.

Q. Did you throw any clubs at Pebble, and did you fine yourself?
COMMISSIONER FINCHEM: No, I didn't throw any clubs. 14 at Pebble, I thought I hit it in the front bunker, and I got up to the green and I wasn't in the bunker. Everyone said no, you hit to the green. I got up there, and no, it wasn't on the green. It was under the television tower. I had a flash of frustration.
I did feel nervous, especially when I'm playing bad shots, and I was somewhat self-conscious.

Q. What did you think of Stenson last week?
COMMISSIONER FINCHEM: You know, it wouldn't be my favorite thing to see a player do. I understand the position he was in without any rain gear or anything. So I would hope that there's no recurrence of it.
But the overall reaction seemed to be sort of ho-hum from fans. We didn't get any e-mails screaming that he had done something immoral or anything.
So it just seemed to be a funny, one-off thing. He's a charming fellow. I did get a kick out of, I guess his wife asked him not to do it again, on 18, which I thought was sound advice.

Q. With the TOUR coming to Orlando next week to a tournament Arnold Palmer is hosting, I wonder if you can comment on where you think his greatest legacy to the game is?
COMMISSIONER FINCHEM: Arnold's?

Q. Yes.
COMMISSIONER FINCHEM: Well, that's a whole other discussion. If I had to put my finger on one thing, I would say he is the consummate sports personality general, totally accessible to the fans, never says no to anybody for anything. Probably has signed millions of things over the years. People send him stuff from all over the world. He has a whole operation that just deals with that.
He is the role model for public and fan interaction in sports. I just can't imagine anybody that does it as well as he does, and he's been doing it for a long time.

Q. Might be a little unfair question, but who do you think will be harder to replicate, Tiger and his performance, or Arnold and the things you just mentioned? Are we more likely to see another Arnold or another Tiger?
COMMISSIONER FINCHEM: Gosh, that's a really hard question. They would both be extremely difficult to replicate, there's no question about it. Just have to wait and see. Maybe we'll have two or three come out next year.

Q. You talk about players who quote unquote, get it, and I know it's not a PGA TOUR event, but the Tavistock Cup, guys flying in on helicopter across town. It's quite a display of conspicuous consumption, shall we say. Does it concern you at all how that reflects on the TOUR brand in these conditions?
COMMISSIONER FINCHEM: I didn't get any e-mails on that, either. I don't know how to respond to that question.
I think that we've been through this discussion recently about client and customer interface and customers coming to a golf tournament and customers being entertained. And the rhetoric around that discussion is so over the top right now because of the climate and because people are angry and everything gets rolled into one thing.
I think it's very unfortunate. It's been distortive. So you know, at some point, I think we have to understand that it's good for the economy for people to spend money, regardless of what they spend it on. I would rather have people with a lot of money spend it right now than sit on it, because however they spend it is going to help the economy.
I just don't think we should figure out ways to make what is legitimate -- there's always a subjective reaction to anything by people; ten people will have a different reaction. But if everything is based on the de minimus; if there is anybody that would react negatively and let's don't do it, that's not good for anything. And so I don't want to characterize anybody's activities in any one way, because I don't think it really means anything in the final analysis.

Q. Any more clarification on what's happening with Memphis at all?
COMMISSIONER FINCHEM: No. We may have more to say about that in a few days. But we will be playing a tournament there as planned. We are raising money for St. Jude's Hospital, and we will have a great tournament on a great golf course and see what develops going forward.

Q. Their good faith deposit or whatever you would call their earnest money payment in advance, is that subject to SEC seizure? Has that been frozen at all?
COMMISSIONER FINCHEM: I'm not sure I understand.

Q. Do they not -- the title sponsor pays money in advance; correct, that's part of the contract?
COMMISSIONER FINCHEM: Title sponsors are all over the map. They have different payment schedules. It's like a bill you pay on your MasterCard; some pay several times during the course of the year, and others play differently.
In this case, their assets are frozen. They are not paying anything at this point.

Q. I was just wondering whether if they had paid something already, whether that would be subject to SEC freeze-out or how that would work. Just curious.
COMMISSIONER FINCHEM: It's murky. It seems that we don't have an answer on that kind of question at this point.
So we are making some assumptions and moving ahead. We'll have more to say on it in a few days.

Q. It may be too early for this, but did you get any sense whether the WGCs being twice in three weeks was a good fit, something that might continue, or does it need anymore separation?
COMMISSIONER FINCHEM: Well, I don't see a need for more separation necessarily just because they are so different.
I would think that we probably never would have put them that close together if they were the same format. That wouldn't make a lot of sense.
At least for this period of time when they are both in the United States and we have the players here, it seemed to work. And actually, the move had more to do with what was going on in the Miami market than players. That was the real driver to get that showcase event up earlier ahead of basketball to avoid tennis in Miami, and it worked. We had what we thought was a really good event in Miami and it certainly demonstrates what can happen down there in the future.
The Match Play is so different. By Thursday, you have 32 players playing, so it's a very different animal. Doesn't look the same, feel the same, act the same.

Q. There have been a couple of players out there who said that in light of the economy right now that it might not be a bad idea for the TOUR to start playing for less money to help some of the struggling sponsors and keep them around; I know as a Commissioner you're trying to maximize purses and that's all you want to do, what is your answer and what is your response?
COMMISSIONER FINCHEM: I think I just answered this question over here.
Our attitude right now is to stay the course. We are successfully renewing business in the future that includes increases. We came out of 2008 with a record year. We had a terrific year last year. We anticipate a tremendous performance for charity this year. It's probably off some, but compared to anything else out there, we think it's going to be very, very solid.
And we are not assuming anything. To do the kinds of things you're asking generates a lot of issues and assumes certain things that we don't want to assume at this point. Most of our sponsors are actually doing reasonably well in this climate. We have some that are very stressed, but a small reduction in the cost to generate a reduction in the purse, since we put up 68 percent of the purse, is not going to move the needle. And we don't have sponsors asking us for that.
So we'll see. I mean, if this thing goes on for two or three years, I might probably would be giving you a very different answer, but we are making measured steps based on assumptions related to worst-case and best-case, and that's the way we want to navigate right now, and see what develops.
Thus far, by the way, I think it's working reasonably well. But we are far from out of the woods yet.

Q. With all of the noise after Northern Trust, and obviously you had some discussions with people in Washington over some of the perceptions, do you strategize at all or even discuss anything like this with your counterparts in the NBA, NFL, LPGA?
COMMISSIONER FINCHEM: Sure, certainly with the LPGA. They are more of a title-sponsor focused kind of organization.
The team sports are in a very different situation. Their platform is different. The focus there is on sponsorship is very different. But we talk to the other sports during the course of the year about a lot of stuff.
I think, again, there has been recently this focus on one little piece of one part of the value proposition. And I can't say it too many times. A title sponsor sponsors a tournament because he gets the best or they get the best branding in sports.
There is no television branding that beats the branding that the PGA TOUR offers, period. Secondly, they get advertising across the platform, and on that platform, they are reaching the strongest fan base mix from an indexing standpoint in certain segments of the marketplace that are difficult to reach, index high in news and PGA TOUR golf, we rank very high in those audiences and are appealing to companies that want to sponsor.
Fourthly they get global exposure, and fifthly, they get a unique business platform to do business -to-business work at tournaments. So this is one of those five value streams, and a piece of it is entertainment, just a little piece. And as I've said to members of Congress and publically, in 20 years of being involved with this business, I have never seen anything that I personally, and that's a very subjective analysis, would look at and say, that's lavish entertainment.
Now, people can differ subjectively on whether Sheryl Crow is lavish or not. I mean, if I got up and sang at the dinner, I don't think anybody would accuse that of being lavish entertainment. And there's everything in between.
But unfortunately what's happened is, and I think companies are sensitive of the entertainment question today, but what happens is the rhetoric spills way beyond that. The rhetoric talks about sponsorship and the rhetoric talks about putting customers up, and ignores the value to companies that legitimate customer relations and developing relations with customers provides to a company.
That's what we have to push back against. It's not a question of questioning whether if the government is going to take over a company, they should be concerned about wasteful expenditures with bonuses that have nothing to do with performance at the top of the list on down. We would support all of that.
But I just think they need to be more careful when they talk about a value proposition when they characterize one little piece of it and they have a problem with that; it could have a chilling effect. And that's true with the overall travel and entertainment industry generally. I mean, hotels are working hard in Washington because this has a chilling effect on any company taking any employees are or companies to hotels, at a time when we have lost 4,500 jobs in that industry. I think we need to push back from that but at the same time need to be sensitive.

Q. Is this affecting Pro-Ams at all, people who don't want to leave their desk?
COMMISSIONER FINCHEM: That's a hard question to answer, because what we are faced with is you have the effect of the economy, anyway, which is pushing down marketing expenditures by companies across the board, and individuals. And so as a consequence, if you're running a tournament, you're selling stuff, including Pro-Ams, it's harder work, no question.
But then you add to it, you overlay that in some cases with the kind of rhetoric that we've seen which contributes to that; now, how you would measure which thing has the most negativity associated with it, that would be very hard to do. But they are both negative, I can tell you that.

Q. Are you aware of any prices of Pro-Ams, entry fees, going down?
COMMISSIONER FINCHEM: No, but I'm not so sure I would be. But I don't know the pricing goes down. I do know that some Pro-Ams, and some hospitality, for sure, is off; particularly at the lower level in smaller companies who do smaller entertainment packages. A lot of tournaments are off in that regard somewhat.
The good news is that a lot of them have been able to replace sales, and so hopefully we'll have more to say about this probably around THE PLAYERS Championship, we will have a better sense. But hopefully we'll be able to finish the year in good shape on the charity side.

Q. This would be more of a question for just your economics backgrounds than your Commissioner's perch. Is there a right answer when a title sponsor like Wachovia or Chrysler decides to take its name off of something versus going in there and trying to go in and make the best of a bad situation. Do you encourage them to stay the course in Tavistock yesterday, CitiBank was one of their foundational sponsors, and then took their name off it and didn't even send their 100 allotted people down there.
COMMISSIONER FINCHEM: There's an example, you don't know whether that's a result of reducing work in the budgets or concern about focus. They just went through that thing in New York with the naming rights to the Mets Stadium and took some hits; although the Treasury Department said, wait a minute, that's a decision the company has to make from a marketing standpoint, which I thought was a good response.
The Wachovia situation, that's a little unique because they are going to rebrand the tournament, anyway. So a transition; we take the name of a company that's really not in existence any longer, it kind of makes sense.
The more important thing is in most of those situations, customers are coming to the tournament, so the value stream there is being maintained and that's what we are more interested in talking about at this point.
Thank you very much.

End of FastScripts

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