Jul
7
2009
What if the PGA Bought the LPGA?
By Stephanie Wei under General

It appears LPGA Commissioner Carolyn Bivens might be given the boot soon. Yesterday GolfWeek’s Beth Ann Baldry reported that a letter had been signed by leading players – most notably, Lorena Ochoa, Paula Creamer, Cristie Kerr, Morgan Pressel and Natalie Gulbis – asking for Bivens to resign. The letter stated that not all the problems can be blamed on the poor economy and suggested the need to rebuild relationships with long-standing sponsors. Those who supported the call for Bivens to step down attached their names.

Some of the well-known bloggers have since responded and come up with good strategies to build the future of the LPGA. Ryan Ballengee suggests the LPGA be more flexible with sponsors and build, maintain and revive old and new relationships. In other words, until the economy improves, the Tour shouldn’t fight above its weight – if Indianapolis is better for the bottom line than Dubai, then go with the former. The Constructivist provides an excellent overview of the situation and argues that while Michelle Wie could help turn things around, the LPGA needs a better business model than banking on one person.

Last week when word came out about losing the Kapalua Classic, I mentioned that we couldn’t solely hold Bivens accountable. Of course she is the voice of the LPGA and she should take responsibility for poor decisions and transactions. I’ve heard Bivens isn’t the most affable person to negotiate with sponsors. She also had a few hiccups, such as the “English-only” and Twitter fiascoes. At the same time, she has made positive contributions, such as improving retirement benefits for the players and making the Golf Channel deal. So if Bivens were to resign (which seems imminent in light of recent events), her replacement should be someone who has business and playing experience, served on the LPGA board of directors and excellent people skills.

I also addressed the current economic climate, which has forced sponsors to breach contract or discontinue their backing. One of the first rules of large-scale business is that if you rely on one or two revenue streams (corporate sponsorship and TV deals, in this case), you’re vulnerable to every little twitch in the economy. I mean, the LPGA is not General Electric – it can’t make loans and trains and jet engines and washer-dryers. But it’s big enough that it should be pulling in significant amounts of money from enough sources that if sponsorship goes down the tubes, it’s not totally screwed. Any commissioner who fails make a stab at that problem is just setting the Tour up for another crisis in 10 years if the economy dives again.

Back to the TV contracts, Bivens orchestrated lucrative deals with the Golf Channel and J Golf. As for other revenue streams, the LPGA now holds the licensing rights to the logo and photographic coverage – in a partnership with Getty Images. To a certain extent, the LPGA can in fact financially stand on its own. But I digress, the issue is maintaining and acquiring corporate sponsors to keep a competitive tournament schedule as well as increase fan support.

I’m going to throw this out there and say the PGA Tour should step in. Most of the LPGA’s tournaments are owned and run by outside parties, such as IMG and Octagon. In contrast, the PGA has resources, such as staff and money, to administer its events. They also have sponsors and long-term agreements with them. Bankrolling a PGA event costs $6 million to $8 million compared with $2 million to $4 million for the LPGA – a significant difference. What if a potential sponsor approaches the PGA but can’t afford to put forth the required amount? Or a current one that wants to spend less money? They could direct them to the LPGA while still technically owning those events. And they also have the financial ability to hire additional manpower. Organizationally, things shouldn’t change in that the LPGA should still have a separate board of directors and administration.

Take a gander at professional basketball. The WNBA is only alive because of its relationship with the NBA. The LPGA is a very attractive investment – it’s an undersold product with huge potential for growth. It has the possibility to parallel women’s tennis. The acquisition would be a wise business move for the PGA and it would solve some of the LGPA’s current problems.

Perhaps the tours should add another joint event with a fun twist. At the moment, there is the Wendy’s 3-Tour Challenge and the CVS Caremark Charity Classic where the three top players from the PGA, LPGA and Champions Tours play against and with each other for “bragging rights” and great causes. What if they reinstated a tourney like the J.C. Penney Classic? Or a skins game? Anything. Just one that is televised and publicized. It’d be fantastic PR across the board, not to mention entertaining.

The bottom line is that the men’s and women’s tours should work together more. I mean, they have similar goals, right? That is, to further the growth of golf. So think about it, what if the PGA bought the LPGA?