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DEUTSCHE BANK CHAMPIONSHIP

September 2, 2010

NORTON, MASSACHUSETTS

JOHN BUSH: We'd like to welcome everyone to the Deutsche Bank Championship. We're joined by three special guests today. We have PGA TOUR Commissioner Tim Finchem; Deutsche Bank CEO Seth Waugh; and we have Bill Scannell, the Executive Vice President for the Americas for the EMC2 Corporation. Thank you for joining us for a few minutes, and with that, we'll turn it over to Seth.
SETH WAUGH: Thanks, everybody, for coming. As Mark Twain once said, "The rumors of my demise are greatly exaggerated." We're here today to announce that we'll be extending for two more years with the Deutsche Bank Championship. As I've said all along and really for the last eight years, we've had an amazing experience with the TOUR, and it's been an absolute home run for us in every way. We think about it in terms of our brand, we think about it in terms of our clients.
Today is the biggest day of the year for us in a lot of ways in that respect. And we think about it in terms of the good it does for the local communities and through charities as well as the economic development aspect of it.
We've been told we raise about $60 or $70 million of revenues brought to the region every year, and if you add it up over eight years, it's roughly half a billion dollars, which is real money, and I think someone once told me when I started in the business that the best thing you can ever do for the world or for the economy is to create a job, and I'm hoping that in $500 million there's a number of jobs that have been created out here. Our view is that it's never been more important to do that than it is today frankly, given the state of the world.
We're pretty proud of what we've built and have tried every year to raise the bar in different ways, going green, becoming part of the Playoffs thanks to Tim, our military efforts which we announced yesterday in New York and here on-site, as well, and frankly this announcement is another aspect of that.
We are proud to say that we have added a presenting local sponsor, and it's someone that -- and I'll tell you guys this: When we came up with the idea of it, I made one phone call, and that phone call was to the man to my right, Bill Scannell. The first phone call I made was to the TOUR to make sure this was a good idea. The second call was to Bill, and Bill loved the idea right off the bat.
We've been friends professionally and personally for a long time, not just with Bill but with our firms. We do lots of client -- they're a client of theirs, they're a client of ours, and we've always had a great relationship, and that's turned into a personal relationship with myself and Bill and Joe Tucci, who's the CEO, as well as Bill Teuber, who is the vice chairman, as well.
We really think bringing in EMC2 is going to raise the bar for us yet again. As I always said, we're proud of what we've built but we don't have an enormous pride of authorship, so we're open to ideas. EMC2 has been one of our founding partners from the beginning, so really the way to think about it is them stepping up their involvement. It will still be the Deutsche Bank Championship, and the presenting local sponsor, which there will be various benefits to that, will be in the form of EMC2, and we think this partnership will guarantee that the Deutsche Bank Championship will be in New England for a long time to come.
So it's a great day for us to announce. I want to apologize that it sort of couldn't be as transparent over the last eight months as you can imagine. When you have the number of parties that we have involved, even though you're great friends and always had basically a handshake from day one, getting through the details of that between ourselves and EMC2, the TOUR, the Tiger Woods Foundation, who has obviously been a great partner of ours, as well, IMG, again, all great people working together. But when you put that many sets of lawyers in any one room, it tends to build up the hours, and it took what we all think a handshake -- which we basically had in the first quarter of this year, sort of took eight months to put it on paper. We literally just left signing it ten minutes ago after it finally got set.
When I've said all along, that I was very optimistic that we would be back and that we've had an amazing experience, I meant what I said, as I always try to be, and I want to thank you guys for generally all your support, and just please, if you ever have a question about where we're going or why, don't be afraid to pick up the phone and call because we're always willing to talk about it, as I hope you've learned over the years. Very excited about this again.
Sorry about the drama and the confusion. It wasn't intentional, but it's a great result, and we're very proud to be partners with both these guys standing next to me as well as the foundation as well as IMG has done a great job for us for the last eight years.
BILL SCANNELL: I guess I'd just echo Seth's remarks, and that is we've been thrilled to be part of the Deutsche Bank Championship for the past eight years. We get a lot out of it, and we're thrilled that it gives a lot back to the community and the local charities, and as Seth said, when he called me it was a very quick conversation, and we said, yeah, we're all in, we'd love to do this with you guys. So EMC2 is very excited.
We're right down the road so it makes a lot of sense for us, for our local customers and employees and as I said certainly the community and local charities. So very excited.
JOHN BUSH: Commissioner Finchem?
TIM FINCHEM: I also will echo Seth's comments, and just from the perspective of the PGA TOUR say how delighted we are with this development. The continuity of the relationships involved here is very, very important. As Seth mentioned, the relationships have been the core of what's built this tournament, and when we have all the best players in the world playing in these Playoffs, it's important to have a tournament staged at the quality level that we've seen here in order to communicate that effectively here and around the world. And that's what this partnership has provided.
As far as Deutsche Bank goes, going back to the early days of having a vision of incorporating not just the fans, the sports fans in this terrific sports town but also really bringing in the business community from Boston, and it's been a very strong performance. The founders, representatives really are a cross-section of the business community in this area of New England, and it gives the tournament a lot of strength.
EMC2, who has been involved in the tournament since the early days, also has a past history with the PGA TOUR directly, so we're very pleased with Billy Scannell and his executive team for their commitment, as well. It all adds up to a very positive development for the PGA TOUR generally and for the Deutsche Bank going forward in a very special way. Thanks.
JOHN BUSH: We'll take some questions for the gentlemen and then at the end the Commissioner will take three or four questions about other tournament related matters.

Q. Can you just kind of talk about keeping the tournament in Norton with its proximity to Boston and Providence, kind of what being in Norton has meant for the tournament and everything there?
SETH WAUGH: Well, Tim at the draw party last night said, "This is the greatest sports town on earth," and having been born here I'm little biased, but I agree with that. When we made the choice to be here in the first place, we knew it was a golf-starved area. The fact that I was born here helped a little bit, the fact that my father coached probably influenced a little bit, as well. So it's been a great place.
I rang the bell yesterday with Steve Stricker, who's a great guy, as we all know, and we were coming back up here yesterday afternoon, and he said, "You know, you guys have the best fans on TOUR." He said it was that feeling that he had last year on the last three or four holes coming in, and it's true.
We also have tried -- it's Labor Day weekend, right, so we've always tried to make this very much of a family affair, and that's what you see. I love walking around the weekend and you see three or four generations of parents and children kind of walking around. And we sort of took a tough weekend, it's not a corporate weekend, it's a family weekend and said, let's make that a strength rather than a weakness, and I think New England has embraced that.
As you may have noticed, we're the only FedEx event that hasn't changed dates, right, because it's no surprise that where else would you rather be on earth on Labor Day weekend than in New England. Today feels like August 15th for sure, but once Earl gets through here it's going to have those crisp nights, and it changes every year, and we've been blessed with amazing weather and amazing fans.
Again, I said it before about the financial impact, but we can make a big difference here, and I think we have, and the place has embraced us. It's a town that you've got to be local, and it's a town that loves you once they love you, and if you ever violate that trust, you're out, right, and we get that part, too. Bringing in a local partner is we think another way to enhance the whole thing to make it even better.
You know, when we first came here, obviously we came here for all the right reasons, and after the first year Tim and I looked at each other and said, this thing will never leave Boston because it's just too perfect a town for what we're trying to -- and by Boston I mean greater Boston as opposed to Boston, Providence and New England. As you said, the proximity brings in a lot of New England; it isn't just a Boston thing.

Q. I'm assuming it's important that you continue to end on Labor Day. Why is that significant to you?
SETH WAUGH: You know, I think because we branded it that way, and people -- like when people ask me, when is your tournament this year, and I just say Labor Day. It's not the third week in August, it's not August 20th, it's not September 4th. I say Labor Day. We're always Labor Day. And I think the Monday finish is very unique.
I wish we had a little more light so we could make it a little more prime time, which would be even more fun. But it's sort of just before the NFL starts, which is meaningful in some ways, college is obviously Saturday but that happens to be our second day rather than our third day. So yeah, it's a great gap in the sports schedule in my view.
I love being the second event in the FedEx because it's essentially a full field, 100 people, and for us we think that that gives a better kind of experience to the fans because they get that many more people to kind of go and spread it out over the golf course, so that's important to us. It's also kind of a fulcrum of -- they're all important, but going from 100 to 70 seems to me a little bit tougher than 125 to 100.
So we love it, and we love -- once you've kind of got people established on something and you've branded around that, why would you give that up? And again, we took what we think was sort of a dead, tough, in some ways a negative around the corporate part of it and turned it into a positive from a family perspective, and we're very proud of that. That's what this place stands for.

Q. You said a month or so ago that the first decision was whether or not you were going to pick up the option, which you've done, but have there been discussions or are there ongoing discussions about extending it beyond, will that be '12?
SETH WAUGH: Well, Tim let me sign this one about ten minutes ago, and I think that may be long enough for when he calls me to say, when do we want to talk about the next four; I'm not sure. Maybe I will or I won't get out of this room before he asks me again.
Look, we -- it was always intended -- Tim and I talked about it in the first place. It was always intended to be basically a six-year commitment. We structured it in a four-year with our two-year option because it was hard for us to think in six years. We just kind of think in four-year increments corporately. Others may not. That was just kind of our unique thing. So in my mind it was always kind of six years, and the TOUR was great about -- because they were optimistic and I was optimistic, they were great about allowing us to drag this thing out because really we should have given them an answer six to nine months ago.
So over the course of the next year we'll certainly -- we already have begun to talk about it, but I don't want to start this conversation again about what we're going to do because we're certainly not going to announce anything for a while. EMC2 hasn't even had a year of looking at it, so we should probably let them get through one Labor Day to decide how they like the partnership and those sort of things.
Tim has got television and a lot of things going on, and so that's where partnerships and relationships really matter because we'll communicate openly and honestly around what we think we're going to do.
One of my quotes a year ago, which was taken a little, I think, out of context was when I once said, in the middle of the crisis, if we had to choose between jobs or a golf tournament, that's not really a fair fight as a shareholder and as a CEO. But once the world is spinning and we feel good about it, this is one of the great investments we've ever made has been in this event, and it's true for our brand, for our clients, for our impact, all the reasons I always talk about. And so once you get past that crisis, you can begin to think about your IRR on this, and it's hard to put a real number on it, but it's been huge.
And so I have the full support of the global bank to do this because of the impact it's had. We care more than we ever have about the U.S. and the Americas as a growth vehicle, and so it's been a great engine for us, and we, as I said before, I think this partnership, you know, gives us a great chance to have Deutsche Bank Championship and the best golfers in the world in New England for a long time to come.

Q. For EMC2, you're not new to this stuff; you have a history, I guess, with the World Cup. Can you talk about that, because you folks have been in the game for quite a wheel?
BILL SCANNELL: Yeah, we started 15 years ago with the EMC2 golf skills, which was a made-for-TV event with the PGA, and then we did the World Golf. We had to kind of pull back our investment back in 2000 when things were kind of going tough, going bad. But the time seems right to get back in, and as I said earlier, there's a lot of good reasons to do this.
We like the affiliation with the TOUR, we love the affiliation with Deutsche Bank. As I said, they're a large customer of ours and we're a large customer of theirs, and it's just a real good partnership and some real good friendships. It's just that now seemed like the right time to get back into this in a bigger way and support this event. And being a local company, it makes all the sense in the world to us.

Q. As you go forward on the next TV negotiations, is a four-year deal instead of a six-year deal an option or consideration?
TIM FINCHEM: For television? Sure, I mean, we've had four-year deals, five-year deals, six-year deals. Where that comes out is subject to a variety of factors. But our priority probably would be longer term, but that depends on things, programming issues and a variety of things. It could very well turn out to be a three- or four-year term, but we'll see. Sports are all over the map on that, as you know.
JOHN BUSH: Yes, thanks for coming by. Thank you very much for joining us.

End of FastScripts

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