PGA Championship

Valhalla Golf Club


On Second Thought ...

March 06, 2009

Barney Frank still thinks coporations should spend their money prudently, but at least he agrees golf sponsorship has a place.

Barney Frank has seen the light -- sort of. OK, so it's closer to a 15-watt bulb than it is to a klieg, but it beats cursing the darkness, as he did in his original tirade against the Northern Trust Open. Congressman Frank is still not happy about the entertainment the bank funded at the PGA Tour stop in Los Angeles, but he tells he now believes sponsoring a golf tournament is fine -- as long as you don't have any fun while doing it.

"No one is saying they shouldn't sponsor golf tournaments and honor existing contracts," Frank, the chairman of the U.S. House of Representatives Financial Services Committee, said in a telephone interview. "It's the spending on luxury hotels and limousines they should not be doing. Now, if they weren't getting federal money it would be up to them to decide if that's how they want to spend their money."

That's an improvement from Frank's original outburst in which he implied running a golf tournament was a waste of corporate money. But it still means the tour has some work to do in getting its message across to the power brokers in Washington.

"It's certainly good news that Congressman Frank understands the title sponsorship partnership component, but we also need to do a better job explaining the charitable aspects, the economic impact and the marketing benefits it creates for the companies involved," PGA Tour commissioner Tim Finchem said by telephone when told of Frank's clarified position. "We have to work harder to make sure the business model is being understood."

As for Frank's problems with the parties and other entertainment at the Northern Trust Open, Finchem said: "In this economic climate, anytime entertainment is involved it raises questions: Is that lavish? Is that excessive? It's a subjective judgment. But in my 20 years with the tour I have never seen wasteful spending on these types of activities. The quality of the platform is what's important to the corporations involved."

You'll remember that when Frank found out the weeklong festivities at the Northern Trust Open included parties, concerts, luxury hotels and limos, he hit the top of the Capitol dome. The powerful Massachusetts congressman 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." Northern Trust pledged to do exactly that "as quickly as prudently possible" and says future client entertaining will be "appropriate given the current environment."

Northern Trust, you see, received $1.6 billion in TARP money, the Troubled Assets Relief Program designed to keep the banking system from collapsing. In his original attack, Frank painted the issue of sports marketing with the broadest possible brush. In his eye, any marketing done around sports is a boondoggle, and golf was an especially easy target because of its stereotype as an elite sport.

No mention was made of the $1.4 billion PGA Tour events have raised for charity since Tour's inception; or the tens of millions these tour stops pour into local economies annually; or the fact that corporate marketing has existed around sporting events since ads went up on outfield fences at baseball games in the 1880s and Harry Vardon signed the first golf endorsement deal with Spalding in 1899 for the simple reason that it works. Sports marketing was the original product placement and in that regard was way ahead of its time -- and remains so.

As for that "elite sport" label, has anyone noticed that the highest-profile athlete in the world is a golfer who happens to be the multiracial son of a career military man? Or that the game has grown globally in the Tiger Woods era into a diverse sport that is far from cloistered in country clubs? But I digress. Anyway, why let the facts get in the way of a good political cheap shot.

"I am skeptical of the marketing value of some of this stuff," Frank said. "But I do separate out the sponsorship from the entertaining that goes on around these events. That's what I have problems with."

Finchem says Frank's skepticism about the marketing advantages of tour event sponsorship would dissipate with better understanding of the business model. "These companies want to continue being involved even in difficult times because they get a whole lot of value for it," says Finchem.

Interviewing Congressman Frank is a lot like swimming against the tide. His words relentlessly wash over you in torrent so strong there is barely time to catch a breath, let alone ask a question. He has a remarkable way of answering a question halfway through it being asked. Carnac the Magnificent would be proud.

The fact the Northern Trust Open has generated $3 million for charity in two years is swatted away: "How does it benefit a charity to entertain your employees?"

The idea that it is an effective and cost-efficient servicing of key clients to entertain them at a golf tournament is shot down: "If you are running a public company you ought not to be deciding which bank to do business with based on how they entertain you."

And the tens of millions generated for local economies, including money that poured into Frank's own congressional district by the Deutsche Bank Classic, is disregarded: "Are you saying the federal government should subsidize these events? The purpose of the TARP money is to keep the banks running."

In these troubled time, it is not likely any politician will admit the value of marketing around sports. It's simply easier not to. So small victories have to be celebrated as major achievements. That Frank softened on title sponsors is good for golf. His qualification involving the trappings surrounding the tournament remains curious for a politician -- in fact especially for a politician.

"The simple sponsorship of the tournament is one thing, but all the money that goes into flying people there and these lavish parties is something else," says Frank. "All those trappings are for egos and good times, not for charities or for marketing."

Catering to egos and trying to cultivate business by showing people a good time? That sounds familiar. Let's see, I believe the word on Capitol Hill for that kind of entertaining is "lobbying." Surely, none of that ever goes on, does it Mr. Congressman?