The Commish

Tim Finchem and the global empire that is the PGA Tour
 Taken from the April 2012 issue of 904 Magazine.
“As long as our team here is comfortable with my leadership, then I will most likely be open to staying. But those are big ifs.” Back in January, PGA Tour Commissioner Tim Finchem was quoted saying that in an article for ESPN. The occasion for the remark was a question about whether or not the Tour would renew the contract of the long-time leader of the international professional golf juggernaut and Ponte Vedra Beach-based enterprise.
Finchem, 65 this month, became the third Commissioner of the PGA Tour in June of 1994, following only Joe Dey and Deane Beman. It’s a job he’ll have for a few more years at the least, as earlier this year the Tour granted him a contract
extension through June of 2016. The Ottawa, Illinois, native is an alum of the University of Richmond and the University of Virginia Law School. He has led the Tour during a period of tremendous growth for the organization. He’s been lucky to be in charge at a time when players like Tiger Woods and Phil Mickelson are walking the fairways. And technology has done wonders to make golf a more watchable and playable pastime for more people than ever. But managing a operation that literally stretches around the world and includes facets such as a large portfolio of golf course properties, sports merchandise and licensing, a full slate of
annual events and hundreds of independent contractors—Luke Donald, Rory McIlroy, Justin Rose, K.J. Choi, Hunter Mahan, among others—is no easy task.
Oh, and making the job even more interesting, those hundreds of players are technically his boss. For any organization, that’s a lot of chefs in the kitchen, so to speak. Anyone who can navigate an organization packed with driven overachievers and rise to the top is no lightweight, nor is he one who avoids challenges.
Every leader of a large organization has detractors. Finchem has had his share, perhaps most notably some high-profile players who haven’t always agreed with him or some of the decisions the Tour has made during his time at the helm. However, in strict terms of dollars and cents, it’s hard to find fault in many of the numbers. For example, in 1983, PGA Tour players competed for approximately $60 million in prize money over the course of a year; this year, that figure will top $300 million. And as a donator of cash to charity, the Tour is a giving machine. Over the last 20 years, the organization has raised more than $1 billion for charitable groups. In 2011, the three Tours combined generated some $120 million for charity, including $5.9 million earned via The Players Championship.
In February of this year, the Tour secured a new agreement with FedEx that extended its umbrella sponsorship of the organization through 2017. Corporate sponsors are the foundation of the Tour’s business model; in fact, roughly 10 percent of the Fortune 500 and nearly half of the companies listed among the Dow Jones are active Tour partners, as are many of the world’s largest banks. So locking up FedEx for another five years—particularly in a time of less than robust economic activity—is a big deal. For the players, it keeps the FedEx Cup’s $10 million prize pool, a bonus awarded at season’s end, filled to the rim.
This big deal comes on the heels of another whopper. In 2011, the Tour signed an unprecedented nine-year extension with broadcasters CBS and NBC. The plan secures television rights through 2021, unlocks the Tour’s digital rights (namely, live online simulcasts of tournaments) and delivers millions of guaranteed revenue year after year.
Not an organization prone to resting on its laurels, Finchem and the Tour actively seek new opportunities—including those that cross foreign borders and harness new technology. Global expansion is practically a mandate for the Tour’s long-term success. PGA Tour members hail from approximately 80 different countries, and telecasts of its tournaments reach more than 580 million households across some 200 countries. All this out of a collection of beige, one-story, 1970s-era buildings in Ponte Vedra Beach.
In May, the world’s golf media turns its attention to those buildings—well, more accurately, the attention is focused on the manicured grounds of TPC Sawgrass and its palatial clubhouse just a few hundred yards up the road. For 35 years, the game’s greatest players have gathered here to compete for golf’s richest purse, The Players Championship. Finchem himself will mostly avoid the spotlight the week of May 7-13, preferring to let the 144 pro golfers bask in the glow of camera lights. He’ll be there come Sunday afternoon to award the trophy to the winner. But, except for that one ceremony and the assorted media obligations throughout the week, expect to find him entertaining clients, checking on tournament
details and otherwise making sure business gets done.
Even among professional sports organizations, your role is unusual because the Tour itself is unusual. How would you describe your job?
I think it’s consistent with other sports commissioners. They run a business, kind of like a CEO, with a board of directors. That’s what we have. We are all responsible for putting a staff together. And then from the standpoint of being a commissioner, you are charged with the presentation of sport, and the interface with athletes, which is
different than most businesses. The PGA Tour is different than other sports in the sense that other sports help raise money for charity; our sport is organized for a charitable purpose. All of our tournaments are dedicated to generating support for people in need in communities. That is different, and it’s not just something that happens, it’s part of our corporate mission. Therefore, it affects decisions we
make all year long. Also, it affects the morale of our athletes and
our employees because they know we are doing something with an additional purpose.
How do you measure your own success over the course of a year?
The three pieces of our mission are generating benefits for our membership, supporting charities in communities where we play and helping to grow and protect the game. We measure each of those. Our objective is to grow each year in all three of those areas. So, on the first one we’ve had a pretty good growth curve over the last 15 or 20 years. On the second one we continue to grow. We are currently slated to hit $2 billion [in charitable efforts] in 2014. The third one is more of a collaborative position within the game of golf, working with other organizations to help grow the game. Our particular focus there is the support of the First Tee program, which is developed to bring the game to kids who otherwise would not have access [to it], geographically or socioeconomically. We put a lot of effort toward that program.
One of the ways in which the structure of the Tour is unusual is that the tournaments are organized as independent partnerships. By contrast, one NBA team plays another NBA team, for example. You don’t have that.
It’s different than a team, a franchise. If you look at 99 percent of our tournaments, there are four legs to the stool. There’s a charitable organization that partners with the PGA Tour that then brings in sponsorships that invest and make the whole thing work, and [that leads to] the support of volunteers in the community. If all of those are done properly, then we have a successful tournament. Our job is to make sure we put the partnerships together right in the first place.
Every business or organization has been challenged more than normal in the past few years. How healthy is the Tour?
We are healthy, and we’ve generally grown during the downturn. In many ways we are similar to the other sports. When the economy is off, it puts pressure on selling and creating involvement from a corporate hospitality standpoint; it affects ticket sales. We’ve been very fortunate that the business model of our tournaments and our sponsors has worked very well. And the fans have responded both in their television viewing and their attendance at tournaments.
Tell us a little about the new TV deal. It’s a big deal.
I think the hallmarks of the deal are two-fold. One, is the term. And the second is financially, it’s an opportunity for us to continue to grow. The third piece that’s pretty important is the unlocking of the digital rights; that allows us the capability to do a lot more stuff in the digital interaction with our fan base. By next year, most, if not all, of our programming will be simulcast online.
Give us a sense of your average weekly schedule.
Average would have me out of here probably three days a week. I travel about 170 to 180 days per year. So, it’s a different kind of schedule when I’m on the road. Here, I’m in meetings about 70 percent of the time, on the phone 30 percent. When I’m traveling, I’m visiting people at tournaments, doing stuff PR-wise, doing interviews, visiting with sponsors and interfacing with players. I’ve been to the first nine tournaments this year. That’s a little more than usual
because we have a lot of young players coming into the Tour now—probably the biggest influx of talent we’ve ever seen historically.
You need to keep up with these guys and I have been a little out of
it while preparing for the new television deal.
Is it common for players to seek you out at tournaments?
It depends on the player. I make a point of not getting into discussions with players during competition days. My time at a tournament is typically Tuesday and Wednesday, sometimes Thursday, unless I’m handing out a trophy or something.
You can’t add more weeks to the year to allow for more tournaments. So where do you see new growth coming from?
Well, we have more than 100 tournaments on three tours—Champions, Nationwide and PGA Tour. And we added a tour in Latin America. So, we’ve got a lot of tournaments, year-round. What we’re targeting is what I would call a mature tournament base, ways to broaden the relationships with the tournaments and their communities to grow support. And that takes on a lot of different aspects. Top of the list is awareness because if we can get the community fully aware of what the tournament is doing for it, we will get more support. Internationally is different. Internationally, first is brand awareness, which starts with television distribution. Beyond that is playing the tournaments, the World Championships, partnering with other tours.
When the Tour thinks of China, what comes to mind?
Potential. It’s a huge market, but one that has no elite players as of yet. They have to work on two tracks. One, they need to make the game more available to more people by building facilities, starting programs that reach out to more people. On another track, they need to generate elite players. The two work off each other. In the United States, if you go back to the early 1960s when Arnold Palmer was moving forward and golf became big on television—the combination of those two things led to huge, longterm growth in the sport here. Any country that wants to drive growth needs elite player development because they become the role models for kids, the interest drivers in the sport. That’s the role of the professional sport. China is on a course to do that. Other countries have done it—Sweden, Japan, Korea—and they will too. The real question is at what rate.
Speaking of international competition, the Tour was an advocate for golf becoming an Olympic sport [starting in 2006].
We weren’t always in favor of it. We were reluctant for a while. But we did a study and determined 80-plus countries where the government invests in sports, but they only invest in Olympic sports. So we are unlocking resources to grow the game globally, which comes back to the third point of our mission. We came to the conclusion that we can handle the scheduling disruption once every four years. It’s worth the price, and there is a price. But it’s worth it given the impact it will have on the game. It also has an impact on the image of the game. In a lot of countries, golf continues to be viewed as an elite sport. With golf going into the Olympics, it takes an edge off that perception. And that is really important in terms of resources and government involvement. Take a country like China, that is very worried about its land use; having golf in the Olympics has a real impact on those questions.
What would you consider your stamp on The Players Championship?
My stamp is just an annual effort to get better. Look at any great tournament, starting with the best run tournament, which is probably The Masters, with the best stage in golf. I have always said we have the second-best stage in golf here. I think that’s a fair statement. So, to be a great tournament you have to focus on a ton of details and get better at them every year. It’s about always getting better, whether it’s communication, presentation, staging, volunteers, people movement, food and beverage, television distribution, sponsor relations, literally hundreds of pieces of the puzzle; and it’s a question of prioritizing for the next year the things you can do better. The other thing about golf is that it’s a longterm process. The stature of golf is related to its history, and the more history you have, the better you are positioned to communicate what the tournament is all about. And it’s generational. Today we have players who grew up watching Freddie Couples win The Players, watching Davis Love win The Players, and that was different than it was 20 years ago. So all of this builds and builds. All things you do to have a better tournament can get a grip. That’s the phenomenon we’re seeing now.
The prize money awarded by the Tour has grown substantially in recent years. Has that translated into better players competing, better athletes being attracted to the sport?
Yes, the overall profile of the sport, and the quality of life available to the successful athlete in the sport—those two things have definitely, without question, given us the ability to attract a higher percentage of good young athletes. I often like to say the percentage of young kids, 8, 9, 10 or 11 years of age, who can play football, baseball or basketball, or whatever—and can play golf—we are getting a higher percentage of those kids coming into golf. All you have to do is go back and look at footage from tournaments 20 or 30 years ago, and then go out here and look at the guys we have competing now—they’re bigger, stronger, more athletic. Talk to them about what they did at that age level and you’ll find they played other sports, too. That was not always the case with golf. Absolutely, the players are much more athletic. And that is exactly why in the last two years the biggest positive for our Tour is that the fans are excited about our young players. Not just this one player or that one, but the young players as a group, which is a terrific thing for us. Because in the Tiger Woods era, it’s very difficult to break through and make stars when the media is all gathered around Tiger Woods. But this phenomena that continues to grow cuts through all that in a very compelling way. Our television ratings are up, our galleries are solid. I point to that as probably the most impactful thing to happen in the last couple of years.
These young players have also brought an extra dimension of
excitement, flair and personality.
That’s true, but I don’t know how to define why that is. I can’t put my finger on why it is that the players we are getting now, in the last three to five years, are very aware of what marketing is all about and are very intent on making a contribution. They are extremely well grounded. Most of them have played the Nationwide Tour, which helps season a player before he comes over to the PGA Tour. The
result of all that has been very positive. We have a great atmosphere out there. We have happy sponsors.
To the average fan, team competitions like the Ryder Cup and
Presidents Cup have an added dimension. They are perhaps more tense, have more excitement. Is that something we should see more of on the Tour?
We have a big match play event every year. Match play isn’t the best format for television, candidly speaking. It’s kind of slow, with only two players playing at a time. So, we don’t want a steady diet of that. For team play, we have the Ryder Cup, Presidents Cup and the World Cup. They are all great; players love them. The United States happens to be doing well of late, with a nucleus of players on those teams that has been consistent and seasoned. We’ll see how they do in Chicago this fall. But it’s a different kind of thing, that if you do too much it takes away its specialness. We like the mix we have now. We would like to build it a little bit. Our Presidents Cup next year in Muirfield Village with Jack Nicklaus is going to be off the charts. Then we go to Korea in 2015; they are already going ga-ga that we’re coming. And the World Cup has room for growth. We are fiddling around a little on the format, making some changes in the next couple of years. Down the road it can be one of the real strong properties of professional golf.
The golf industry at large has some significant issues, particularly with the number of rounds being played and the costs associated with playing. Is that something the Tour needs to address or should get involved with?
Sure. We’re in the golf course business ourselves, with two dozen clubs. There is a direct relationship between the number of people who play the game and the number who watch it. Now, we’re not
totally reliant on that. Last time we did a study, I think 35 percent of people who come to our events didn’t play golf. But yes, we are very interested in that and try our best to help. I think it’s a little overstated. If you look at the globe as a whole, golf is growing. And it’s growing big time in Asia, and pretty well in eastern Europe and South America. In the United States, there is a focus on the number of rounds played. That’s the big metric. Most people I know play less rounds than they did five years ago, for a lot of reasons. But we still have more golfers. It’s just that during their working years they are playing less. Though, we will have 20 or 25 million people moving into the retirement ranks in the next few years, and that is a huge growth opportunity for rounds of golf. Having said that, it’s incumbent upon us to get young people in the game, which we are doing through The First Tee, and to encourage people to play more and view golf as a family activity. We also need to look at the structure of the game
because in today’s world, people want to do anything in less time. In Europe, if you go and play foursome golf, where you and I alternate shots, we can be done in two-and-a-half hours. That’s a big pastime in the U.K. But here it’s all about 18 holes and golf courses need to lend themselves to different ways to access the game, not just investing four or five hours to play 18 holes. It’s going to be a slow evolution, but I think it’s something that needs to happen.
Final question. Last time you played a round of golf?
I played last week, the first time since October. I can’t play a lot during the last quarter or the first quarter. I start playing this month.
I have some business golf, a couple of tournament outings. So really March to July, that’s my season. I’ll play a few times but not with much focus.