LOUISVILLE, Kentucky (Reuters) - Golf’s special bond with the corporate world and wide fan base put it in a strong position to ride out the current financial crisis, say the sport’s leaders in the United States.
“Long term, sports is going to be a leading area for companies to invest their sponsorship or advertising dollars because people want to experience a sports event as it happens,” PGA of America CEO Joe Steranka told Reuters.
”You look at golf, not just because we have a great fan base plus a 28-million-person participation base, we also have people who have a stronger emotional connection.
“I think golf will be one of the best genres in entertainment, golf will do better also because of the aging of the boomers and the major championships are the best of the best of the best.”
Golf’s importance to sponsors and advertisers was well demonstrated at last weekend’s Ryder Cup.
Vast swathes of the finely manicured grounds at Valhalla Golf Club, the battleground chosen for the 37th biennial skirmish for golf supremacy between the U.S. and Europe, disappeared under luxury tents pitched by some 250 companies.
JP Morgan Chase Bank, UBS Financial Services, Caterpillar, Toyota and troubled financial giant Merrill Lynch were among those who paid the PGA of America between $250,000 and $1 million for the privilege of being present.
A riveting three days of golf, capped by the rousing U.S. victory that ended a nine-year Ryder Cup drought, kept the mood upbeat and cash registers humming inside the merchandise tent.
Those watching from the air-conditioned and catered comfort of the hospitality suites were well aware of the dark clouds of a deepening financial crisis swirling on the horizon.
”You are always going to be affected when you have the systemic business issues our nation is facing right now,“ said Steranka. ”We’re very concerned about it.
”Our $76-billion-a-year golf industry is made up of $28 billion of direct spending on the nation’s 16,000 golf courses (and) 3,000 golf ranges and that core is still very solid.
”It’s that core that provides 900,000 of the two million jobs in America that the golf industry produces.
”But we do have $18 billion in tourism and $12-13 billion in real estate development that is directly related to golf and it is on those enabled industries that we see the greatest impact going forward.
”As America tightens it belt, whether it’s corporate America or Main Street America, we expect people to continue to take the same number of holidays but the amount of money they will spend a day will drop.
“We know they are going to be a little more judicious how they are going to spend their money.”
The PGA of America, a non-profit organization that oversees the sport in the U.S., pours millions of dollars back into the game each year with most of that money generated from its two marquee events, the PGA Championship and Ryder Cup.
The Ryder Cup, which is held in the U.S. once every four years, remains the PGA’s biggest money generator, raking in a profit of between $20 and 25 million, slightly more than the PGA Championship which is an annual event.
Steranka conceded that the profit from this year’s Ryder Cup could dip, in part because of the current crisis in the markets but said that golf was better positioned to ride out any financial storm than many of North America’s other major sports.
”Specific to the Ryder Cup, it is a once every four year event here in America and in the absence of golf in the Olympics, this is Olympic golf.
“It has the fervent appeal, patriotism and that’s what gets more clients, more customers, more of the executives attending an event because it has that national appeal.”
The PGA Tour, which will crown the Tour champion in Atlanta this weekend, will also be keeping a close eye on the market turmoil with a line-up of tournament sponsors from the car industry that includes Mercedes Benz, Honda, BMW and Buick.
With the PGA of America not hosting another Ryder Cup for four years, it will be the European PGA that could face the brunt of the financial fallout as it prepares to stage the 2010 event at Celtic Manor in Wales.
The Welsh business world is optimistic, however.
”What is happening in the economic environment is a concern for everybody,“ Geraint Jones, chief executive officer of International Business Wales told Reuters. ”But as far as this event is concerned, it is two years away.
“It (Ryder Cup) tends to be one of those events, I don’t want to say inflation proof but it’s a big event and people tend to find a way to get to big events.”
Editing by Clare Fallon