June 7, 2009

Holding Pattern

In the last year of its contract, the LPGA Championship faces an uncertain future -- much like the LPGA Tour itself

Bulle Rock has been a successful host of the LPGA Championship, but its run is coming to an end this year.

Bulle Rock has been a successful host of the LPGA Championship, but its run is coming to an end this year.

Taking the temperature of the LPGA Championship provides a fairly accurate gauge of the state of the tour. In its four-year run as a major venue, Bulle Rock GC has produced four extremely compelling winners -- two Hall-of-Fame members and two up-and-coming stars. But this is also the last year the LPGA's flagship event will be held on the first-class Maryland course, and it will also end a 16-year run by McDonald's as the title sponsor.

That pretty much sums up the dilemma of the women's tour -- a ton of highly marketable talent trying to expand its audience and keep sponsors in an extremely difficult economy. This is a bad time to be a niche player in the highly competitive world of sports marketing. Even the top dogs are finding the financial bite is worse than their bark.

The modest goal for the LPGA seems to be to put together a 2010 schedule in which there are not more off weeks than on weeks, and right now the break-even number of 26 appears to be a stretch. With Corning gone, Ginn gone, Phoenix and Kingsmill in doubt and others up for negotiation, where the LPGA Championship is played next year and by what name is a key to what the future of the tour holds.

The McDonald's provides an instructive window into the machinations that placed the LPGA in its current position, a result of both questionable decisions and bad luck (While many warned of the Ginn outcome, no one predicted the Stanford Financial debacle). Let's take a look at the recent history of the LPGA Championship to gain some insight into the tour.

After an 11-year run at Dupont Country Club in Wilmington, Del. -- where the tournament had strong fan and volunteer support -- the LPGA Championship moved to Bulle Rock in 2005. While Bulle Rock is a great course, the move also had to do with the fact its owner made a fortune selling hamburger buns to McDonald's. Meantime, a spectacular renovation of the much-maligned DuPont has some players saying the tournament should return there.

While the move from DuPont to Bulle Rock provides a glimpse into the economics of the tour, the rule changes the LPGA Championship underwent -- call them Michelle Wie Rules -- is more problematic since it cut away at the very essence of the tournament and bought into question the extent to which the tour is willing to comprise tradition and rules in exchange for publicity.

When Wie was a media darling she could not play in the LPGA Championship because, well, it was the LPGA Championship. It was the tournament for members of the Ladies Professional Golf Association. But the rules were changed in 2005 to let in a top amateur. Guess who that was.

Critics immediately pointed out that the Players Championship didn't change its rules to get Tiger Woods into the field when he was an amateur, nor did the PGA Championship. And based on amateur achievement, a much stronger argument could have been made for Woods than Wie.

While the men's tour protected its tradition the women's circuit opted for short-term gratification. Now the LPGA Championships finds itself in the position where it has bargained away the essence of its identity -- it is no longer the championship for LPGA members. It is not even a championship solely for professionals.

The positive in all this is that the LPGA now owns its flagship event. That announcement at last year's tournament raised hopes the tour can use the event as a revenue stream, as it has with the Solheim Cup and the ADT Championship, both of which it also owns. But even that might be an overreach.

While the Solheim Cup is unquestionably solid, the wonderfully compelling format for the ADT Championship -- small field, multiple cuts, eight players going for a $1 million first prize on Sunday -- intends to come back in 2010, but as yet has no sponsor or venue, same as the LPGA Championship. Those are significant issues.

So where will the LPGA Championship be played in 2010, and under what name? The answer to the first part of the question likely depends on the answer to the second. The title sponsor will have a lot of say in the venue, based on convenience for its corporate needs.

The former season-ending event -- the ADT Championship at Trump International in West Palm Beach -- was replaced on the schedule by a tournament in Houston when it became the Stanford Financial Tour Championship. That tournament will be played at the Houstonian Golf & Country Club this year, apparently without a title sponsor.

The question is how many events can be run without sponsors. The Tour Championship, LPGA Championship, Phoenix, Kapalua, China and what was the ADT are currently on that list. Of those, the LPGA Championship probably stands the best chance of finding a sugar daddy. And the tour can ill afford to subsidize the others.

The one venue that is so good it might win out even if it is not close to the corporate headquarters of the new sponsor is the Kingsmill Resort in Williamsburg, Va. That's where the Michelob Ultra Open is currently played, but that contract is up and the new owners of Anheuser-Busch -- Europe-based beverage giant InBev -- are sounding like they aren't coming back. Kingsmill would be a great major venue.

The LPGA would like to have its flagship event in the New York City area because of the potential for corporate hospitality sales. Remember, the 2002 men's U.S. Open at Bethpage was the best revenue-producing U.S. Open in history and being 30 miles from the heart of Manhattan didn't hurt. Proximity to the Big Apple might also persuade the new title sponsor to plant its tournament stakes far from corporate headquarters. Of course, while regular tour events in the New York metropolitan area have never been particularly well supported, the hope would be that a major would hold extra appeal.

But to get the horse before the cart, a sponsor need to be found first. The four LPGA Championships at Bulle Rock produced Annika Sorenstam. Se Ri Pak, Suzann Pettersen and Yani Tseng as winners. That pretty much validates it as a major venue. Those are four great winners. But this week will be its swan song.

Whoever wins will do so wondering where she will defend her title next year, and what the tournament will be called. This is the LPGA Championship and the answer to those questions is critical. And, as with everything in this economy, they are shrouded by doubt and confusion. We know this is the end for Bulle Rock and McDonald's -- and we hold our breath for what comes next.