MCDONALD'S LPGA CHAMPIONSHIP PRESENTED BY AIG

June 5, 2002

Ty Votaw

TY VOTAW: Hi everybody. I have seen some of you since our press conference -- at our press conference at Nabisco. Some of you I haven't seen since we had our player summit this year, or the beginning -- end of last year, so we thought we would get together and give you a little bit of an update on where we are in 2002. We obviously are very pleased with where the tour has gone the first six months of this year, five months of this year, leading into now our second major championship of the year, the McDonald's LPGA Championship. I have to start off with where we are on the competitive side, and we have had a very dramatic and compelling year so far, and you have to, again, start with Annika Sorenstam carrying -- starting off where she carried off last year with four titles so far this year, one major, and is fast, once again, approaching the $1 million mark in earnings and prize money, which if it isn't the fastest this year, it's among the fastest she has ever been able to do that. But it's not just been a story about Annika this year. We have had 11 events, I believe, this year, with seven different winners. All but two of them, 9 of the 11, have come down to the final putt on the final day in either regulation or in play-offs, so the dramatic competitions that we have been able to give our fans in the first 11 events with the diversity of winners, a couple first-time winners, some familiar names, Juli Inkster, et cetera, that we think the year has gotten off to a great start and we have got an enormous amount of momentum coming into the McDonald's LPGA Championship presented by AIG.

In terms of an update where we are with the number of fans, initiatives that we announced as part of our strategic business plan at the Kraft-Nabisco championship, we have a number of positive things to report. We, in our tournaments, have instituted a number of fans-first initiatives that we can have, we can give you more information about, in particular, and I can certainly follow up with answers to questions, but certainly the course initiative that we initiated at Nabisco this year where we gave up to 200 fans a backstage view of how to watch an LPGA tournament was very well-received by that marketplace, and we are looking to have that initiative rolled out at at least a couple more this year. In Nashville, for example, we had ESPN's The Truck appear, which was the first women's sporting event that ESPN's The Truck came to, and we had a -- I think a successful turnout for that, over 2,200 spectators came through The Truck, participated in any number of different things, whether it was getting their picture on the ESPN, the magazine, cover, participating in a mock sports center where they can be Kenny Maynard, Dan Patrick. Those 2,200 spectators in Nashville that went through The Truck was the third best ever that ESPN has experienced at any sporting event, and nearly totaled the three-day total at a Super Bowl when they had it there, so that, along with a Vince Gill and Amy Grant concert on Tuesday night of the Aerus Electrolux USA Championship hosted by Vince Gill and Amy Grant -- which is the longest title in the history of golf, I think -- brought 7,500 new fans or new spectators to the LPGA in an environment that was the LPGA, and that's translated into a number of different success stories in terms of attendance and television ratings and LPGA traffic, as well.

Last week in Chicago, the Kellogg-Keebler Classic, an inaugural event very well-attended for a first-year event for a marketplace that we haven't been back to in several years, and a very crowded marketplace, frankly. Over 56,000 people attended that inaugural event. We had a number of great things going on there. Nancy Lopez Day was announced on Saturday, which contributed to the crowds. We had a kids Pro Am, a Junior Pro Am, on Monday, Memorial Day, as well as a fairly, we thought, well -- very successful autograph tent or policy that, as players came off of their performance each day and signed their scorecard, they went to an autograph booth and signed autographs, and the next group came in, and it was, you know, virtually participated in by players, and, again, it was very well-received, and I think the attendance out of the box was very positive, and I think we have bigger and better things to follow with that. In terms of some of the fans-first benchmarks that we are trying to achieve with the 10 percent increase in our average attendance, and a 15 percent average increase in our viewership, we are on our way to achieving those goals, as well. So far this year, with comparable events, we are up 18 percent in average attendance at our tournaments, and we are still looking towards the development of benchmarks, so we can continue those types of comparisons on a much more statistically valid basis than, perhaps, we have, and other golf tournaments have in the past. But in terms of the estimates and the rough numbers that have been announced, we are up approximately 18 percent in average attendance in our comparable events 2001 to 2002, and in terms of television, we have a number of success stories there as well. We are up in comparable telecasts this year, March to June, from 2001 to 2002, approximately 13 percent.

We have a little bit of work to do to reach our benchmarks, but we are confident with the announcement we have been able to make in our telecasts and the competitive mix that's been demonstrated in the first 11 events that our product is going to -- in terms of competitive telecasts are going to continue to reach those benchmarks that we have achieved. The enhancements that we have had, we have been very excited about working with our television partners on things like increasing the number of hand-held wireless cameras on our ESPN telecasts so that they can enhance the coverage of both front 9 and coverage of web players in an up close and personal way during the entire telecasts of the entire golf course. We have added things along all lines along our telecasts in the golf channel with heart monitors for our players, mic'ing our players in the heat of competition, the golf channel is a unique enhancement, the swing matrix, 360 degree view of our players' golf swings, and those are all enhancements that we think are making our telecasts more compelling, more entertaining and we hope will translate into higher viewership numbers as well. At LPGA.com traffic we are very pleased with the fact, looking at a snapshot of May 2001 to May 2002, we are up 72 percent in page use, reflecting an increase in traffic there, and 62 percent increase in visitors for LPGA.com from May 2001 to May 2002. So all of those things we think are reflective of the enhanced focus of the entire organization on a fans first initiative. That goes from the players to the caddies to the sponsors to the staff, and everybody that's associated with the LPGA, and we need to continue the momentum, as I said, in previous discussions with some of you and in other interviews, we are going to evaluate the success of the five-year plan in a marathon fashion not in a sprint fashion, we are not going to necessarily get too high about the successful things I have just talked about, although I have shared with you a number of very good successful things, but we are also not going to get too low and we perhaps take some time to develop the plan fully so that it is a full five-year plan that is evaluated as a marathon and not as a sprint.

The only other thing I guess I could say in terms of -- and this is a philosophical point of observation for me, in terms of the five points of celebrity that has been talked about that we shared with the players at the players summit in Phoenix and has been reported on by many of you in terms of what we are asking the players to do in order to make themselves more marketable, and if we -- and as we said to them, if they make themselves more marketable, they will make the overall enterprise, that is, the LPGA, more marketable. There tends to be somewhat of a focus on only one of the five points of celebrity, that being the appearance side of that five-sided object, and I think that that is somewhat interesting, but I also I want to make sure that I emphasize here for you today on the record that there is, in fact, five points of celebrity. There is performance, which is, by far, in everything I have said, the number 1 important thing. There haven't been very many successful celebrity athletes who have not performed well in their support, and that has to be number 1 if there is a ranking in this context. Relevance, joy and passion, appearance and approachability round out the last four of those five points, and I just again wanted to make sure I stated them all for you at this time so, again, there isn't some other default position to just number 4 in that last, which is appearance. So with that, I would love to open it up for any questions or any amplifications that you would like me to make for you, and hopefully, I won't confuse you even more with anything I have said.

Q.: You got any bad news for us?

TY VOTAW: Well, you played with me in the golf today so I think you know very much what bad news I have in my life.

Q.: Can you talk about the qualifying situation for next week?

TY VOTAW: As I understand it, what the USGA has done is cancelled the Chicago qualifying site for this past week that was scheduled for Tuesday because of inclement weather. I understand that they have rescheduled it for next Tuesday, but because many of the players -- or some of the players who were qualifying this week, or attempted to qualify this week in Chicago may have been eligible for the Master's next week, scheduling a new event -- new qualifying site in Chicago when the Evian Master's is going on in France would have made it difficult for those players to make a choice what to do: Do they go to France and play in an event that is the second highest purse in our schedule, or do they attempt to qualify for the US Women's Open, which is the highest purse on our schedule and, arguably, one of the most important championships that they can compete for. So the USGA, when presented with that set of circumstances, I believe has found a site in Rochester for Tuesday, which is the week after the Evian Master's, which would give only the players who were in Chicago a choice to either go back to Chicago and attempt to qualify at that site next Tuesday or to qualify at the site -- or attempt to qualify at the site in Rochester the following Tuesday.

Q.: So it is going to be that Tuesday then?

TY VOTAW: Yes.

Q.: It is Tuesday to try and make allowances for the travel?

TY VOTAW: Yes, I believe that's right. Although the charter that comes back from Evian gets in Sunday night, but I think it's Tuesday.

Q.: Would there be anything wrong with having the final qualifying a month and a half out from the Open so that it doesn't conflict with major championships?

TY VOTAW: Those are decisions that the USGA, I think, has to make. I think that we will certainly, once we go through this process, have a number of different discussions and lines of communications with the USGA about how we can make sure that some of the scheduling issues, for example, having three different qualifiers the week of a major championship maybe not happen again. We can't help the weather that happened in Chicago, that happens in any situation, but we certainly we'll have a greater line of communication, I believe, open with our friends at the USGA about a better scheduling process than we have had. But to your point, I don't know what the downside -- to your question, I don't know what the downsides would be to having a month and a half out.

Q.: But they are still your friends?

TY VOTAW: Absolutely.

Q.: Ty, given all the strides you have made in television, the positive strides, are you disappointed that the first two rounds of this tournament are not going to be televised, and could you shed any light as to why?

TY VOTAW: As to why, I believe that a meeting of the minds couldn't take place between, I believe, the incumbent network golf channel and this -- the organizers of this event as to the economics of making that Thursday, Friday telecasts possible. To the extent that we have had, over the past couple of years, all four days of all four major championships covered by television, and the fact that we couldn't get that done this year, is arguably a step backwards, then I would say it's disappointing that we aren't able to have our fans be able to watch McDonald's LPGA Championship on Thursday or Friday. The -- you know, when someone gives you something, and someone takes away something, it results in perhaps a little bit more traffic to LPGA.com, but it's still not the same as live telecasts, so we are -- to that extent, I think I would have to express disappointment that a meeting of the minds couldn't take place, but at the end of the day it also comes down to the cold hard economics of the situation. And disappointment aside, I respect the decisions that have been made by the people that have to pay the dollars to get them on TV.

Q.: Did the LPGA try to intercede at all in the negotiations with the dates?

TY VOTAW: We had a couple of discussions, but again, it comes down to economics and a willing buyer and a willing seller.

Q.: Who is going to buy in this case, who is doing the selling? I don't know anything about TV. I guess I could ask Lenny later, but I figured I would just ask you.

TY VOTAW: When you ask Lenny later, let me know if he gives you the same answer I did.

Q.: Does the golf channel pay the tournament or how does it work?

TY VOTAW: No, it's a question of production in time, and what the specific arrangement between this event and the golf channel is, I am not familiar with because it is an independent decision, just like their relationship between the tournament and CBS is a contractual relationship between -- once this event pays the LPGA for the rights to negotiate with the television network, they then negotiate with that television network. In years prior it was for early round coverage with the golf channel and with final round coverage with CBS, so the buyer in this situation is the tournament and the seller in this situation, as to early rounds, is the golf channel, and as to final rounds, CBS.

Q.: This year the tournament wasn't bought?

TY VOTAW: They weren't buying what the golf channel was selling, as I understand it.

Q.: Okay. That clears it up. Getting back to a couple scheduling issues, a year from now this event is the same weekend as a senior major about 20, 25 miles up the road. Is that a concern? And apparently, neither the LPGA nor the PGA coordinated with each other to prevent something like this from happening. Can you comment about that?

TY VOTAW: Well, again, I can't control what the PGA of America does in scheduling the Senior PGA Championship. They were the same weekend this year, and yes, golf fans will have a choice to make next year in this area as to which event they will support, and that's regrettable, but we did not know where the PGA of America was going to send their -- or what date they were going to set their senior PGA championship, or set it up. This date is basically the date that this event is going to be for the next several years as far as our scheduling is concerned, and we will have a crowded marketplace next year as a result of the PGA of America's scheduling, but they don't typically consult us on where they make their decisions. Neither does the PGA Tour on their decisions, but in markets where we have had senior events and LPGA events, I think both have survived or have existed fairly amicably, and I think that will be the case next year. The only thing is I don't know if we have ever had one in the same location, the same -- roughly same location and the same date.

Q.: What about two majors, too, has that ever conflicted?

TY VOTAW: Again, I don't really concern myself as to the majors at the senior PGA championship, but I understand it is a major -- or the Senior PGA Tour, and I understand it is a major and that will be a fact of life for next year.

Q.: Would you rather see more coordination between the tours on these types of issues?

TY VOTAW: It's always nice to communicate with our friends at the USGA or the PGA of America, PGA tour.

Q.: Do you think the senior tour will have a commissioner by then?

TY VOTAW: I have enough issues to deal with as commissioner of the LPGA, I can't necessarily be qualified to opine about the commissionership of the Senior PGA Tour.

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