If Northern Trust's critics have proven anything, Ron Sirak says, it's that golf is too often used as a scapegoat
By Ron Sirak
Maureen Dowd and I have combined to win one Pulitzer Prize. That it resides with her in Washington and not me in Connecticut is of little consequence, except probably to Dowd since it was her significant talent, not mine, that won it for columns in The New York Times. But even prize-winning journalists are not immune from jumping on bandwagons of half-baked ideas, as many have done regarding Northern Trust of Chicago and the bank's sponsorship of the Los Angeles stop on the PGA Tour.
As a golf writer, you sort of know you are in for a literary long day and are about to be bombarded by a staggeringly ill-informed viewpoint when a piece begins with a sentence as trite as: "Talk about being teed off."
Gee, there's wordplay that's never been used before. The depth of thought did not increase after that inauspicious beginning. In fact, the intellectual tide ran out at a frightening rate as the column filled up inches. As knee-jerk reactions go, this made Bob Beamon's record long jump in the 1968 Olympic Games look like a hop.
So here's the deal. Northern Trust received $1.6 billion in Federal bailout money. Northern Trust sponsors a PGA Tour event in Los Angeles and the client entertainment that accompanies such an event. Therefore, Dowd and others, including Massachusetts Congressman Barney Frank, conclude that the tournament was a boondoggle. Nothing could be further from the truth.
No doubt it plays well with the public for Frank and Dowd to scream: "Northern Trust partied on public money." It is always easy to whip up hysterical hatred when only the facts that benefit your side of the argument are presented. Call it the, "Trust-me-there-are-weapons-of-mass-destruction" argument. But it's fair to neither Northern Trust, the PGA Tour, nor the people who run the Northern Trust Open to strip this event of its context.
Frank and 17 other Democrats on the House Financial Services Committee sent a letter to Northern Trust CEO Frederick Waddell that read, in part: "We insist that you immediately return to the federal government the equivalent of what Northern Trust frittered away on these lavish events."
Again, that sounds good, but isn't it really singling out one company and using its relationship to golf to try to undermine the credibility of both the company and the sport? Golf is the game people love to bash, especially in economic tough time, portraying it as a frivolous, wasteful activity. How about paying some attention to the economic impact pro golf has on communities where it is played?
Now, I know absolutely nothing about the lending practices of Northern Trust so I can't assign blame as to why they are in the situation they are in. And, as a stakeholder in the game -- I write about golf -- I have a bias in favor of golf. But on a professional level, I do know a fair amount about the business of golf and I understand how the added value of entertaining around a tournament works as a marketing tool. Unlike Frank or Dowd, I have taken more than a cursory glance at the business model of the game.
There are three things those jumping on the Bash Northern Trust Bandwagon are overlooking:
Even in economic hard times, and perhaps especially under distressed circumstances, businesses cannot stop marketing. They have to keep their name out there. They have to maintain contacts with important clients. The trick is to do this marketing in a financially efficient way.
Do you know what it costs for a 30-second advertisement on this year's Super Bowl? Three million dollars. The annual financial commitment to run a PGA Tour event is less than what it costs for 90 seconds on the Super Bowl. For the bailout to be successful, those receiving the cash need to improve their business practices, but they also need to continue marketing.
Northern Trust has a five-year contract with the PGA Tour. This contract, signed in 2007 before the real estate bubble burst and the credit markets froze, obligates Northern Trust to sponsor the L.A. stop through 2012. Do Frank and Dowd think it is good business practice to ignore existing contracts?
The PGA Tour has a bunch of title sponsors from distressed industries: Seven events run by automakers and a dozen by financial services companies. Is Congress suggesting that those contracts are no longer binding? Is encouraging that kind of thinking a good business practice? Are they considering the economic impact that would have on communities that rely on pro golf to pump millions into the local economy?