March 9, 2009

Why Golf Is A Dirty Word In Washington

Excluded from the stimulus package and excoriated by pols for its corporate entertainment, golf continues to draw fire

GOLF IS BAD.

Using the influence peddling scandal of Jack Abramoff as a backdrop, The New York Times hammered home that very message in a 2006 feature story. The Washington lobbyist had pleaded guilty to bribing public officials, and many times the payoff was a golf trip to a popular destination, including St. Andrews in Scotland. Thus did that episode help sum up the general sentiment toward the game as elitist, exclusionary and out of touch.

That seems to be the opinion of lawmakers on Capitol Hill. And, apparently, it's a deep-seated phenomenon.

"You can say one thing—it has been consistent," Joe Steranka, the PGA of America CEO, said of the negativity emanating from lawmakers inside the Beltway.

It's not difficult to believe that Washington's power brokers don't much appreciate the game—or at least risk little political capital in assuming an unfavorable posture toward it. Consider three recent examples:

Massachusetts Democrat Barney Frank, chairman of the House Financial Services Committee, blasted Northern Trust Corp. after it sponsored the PGA Tour event at Riviera CC near Los Angeles. Especially egregious to Frank was Northern Trust's expenditures on client entertainment, including dinners, swank hotels and concerts by Chicago, Sheryl Crow and Earth, Wind Fire.

Northern Trust also drew the ire of Massachusetts Senator John Kerry, who two days after the tournament introduced S.463, a bill that prevents recipients of TARP funds from "hosting, sponsoring, or paying for conferences, holiday parties and entertainment events." A subsequent pullback by PGA Tour sponsors Morgan Stanley and Wells Fargo was predictable.

Initial disbursements from the $787 billion stimulus package were delivered in late February. Golf won't see a cent. Amendment 309 of the American Recovery and Reinvestment Act, introduced by Republican Senator Tom Coburn of Oklahoma, excludes funding for "any casino or other gambling establishment, aquarium, zoo, golf course or swimming pool."

So, golf is bad. Except that it employs two million Americans—3.5 times the number of workers for the Big 3 automakers—with a wage impact of $61 billion. What's more, the U.S. golf industry generates direct economic impact of $76 billion annually, including $3.5 billion for charity, according to the latest study, the 2005 Golf Economy Report commissioned by Golf 20/20.

"When a member of Congress questions why someone would be associated with golf, I would say to them that golf is about jobs, wages not wedges, and it's an enterprise underestimated in America today," Steranka said. "Golf courses are managed open green spaces that provide jobs, tourism dollars, tax revenues, recreational benefits, and they lift the value of real estate adjacent to courses, plus they are efficient uses of water."

"I think that some people continue to have a traditional view of the game, one that is very limited, and they don't have an appreciation for the contributions golf is making to society," said Joe Louis Barrow Jr., executive director of The First Tee, whose mission is to introduce youngsters of all backgrounds to the game. "They just don't have a full knowledge of where the game is today."

Not even, it appears, when the world's most recognizable athlete is Tiger Woods, and he hosts a PGA Tour event, the ATT National, in the shadow of the nation's capitol. Haven't lawmakers had a chance to see first-hand how the PGA Tour's business model—sports marketing—works, how it, uh, stimulates the local economy?

"We … 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 told GolfDigest.com. "We have to work harder to make sure the business model is understood."

Finchem and Barrow are former Washington insiders who routinely keep in touch with lawmakers. But golf also has its own registered lobbyist. For two years the PGA of America has employed Erik Winborn, an Air Force veteran, who also represents tennis and a portion of the hunting industry.

"Why does the PGA of America need a lobbyist? I always explain that the issues of small business are really the issues of golf," said Winborn, 58, who asserts there is "across the board support [from Congress] for the working men and women in the golf industry."

That might be the case behind closed doors or when The First Tee holds its annual Congressional Challenge, a Ryder Cup-style competition between representatives of the two major political parties. Occasionally, there is a payoff, such as $3 million for The First Tee in South Carolina that House Majority Whip James Clyburn, a Democrat from South Carolina, inserted into a 2007 defense spending bill.

But then comes Amendment 309, which was likely inspired by a tenet in a House law designed to help victims of Hurricane Katrina. The Gulf Opportunity Zone Act of 2005 allowed for roughly $15 billion for tax relief for ravaged areas in and around Louisiana, but it expressly prohibited funding for "private or commercial golf courses, country clubs, massage parlors, hot tub facilities, suntan facilities, liquor stores or gambling or animal racing property."

The irony is that the week after the hurricane struck, national golf organizations created the U.S. Golf Hurricane Katrina Relief Fund to raise $5 million for devastated areas of the Gulf Coast. Hmmm.

Don't recall there being a Massage Parlor Katrina Relief Fund.

"It's an easy mark, golf," said one industry source, who prudently requested anonymity given what he was about to say next. "There is a bias toward golf that makes for easy populist rhetoric. They're branding golfers as a white, elitist bunch of pigs."

M.G. Orender, a golf course owner and operator and former president of the PGA of America, chose his words more carefully. "It is amazing to me with all that is going on in the economy that Washington chooses to pick on an industry that generates billions in revenue and employs two million people," he said. "They should be talking about directing financial aid to the golf industry and offering a hand up instead of a putdown."

A putdown was not the intention, said Don Tatro, press secretary for Sen. Coburn. "It was not a slap at golf. It has to be looked at in the larger view of priorities. Nevertheless, we realize there are elements where parochial interests weighed in with the next election cycle in mind."

Economy

One example: Last-minute changes to the amendment opened the way for museum funding, including a Mob Museum in Las Vegas.

Frank last week softened his stance—somewhat—on the issue of corporate sponsorships, telling GolfDigest.com: "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. All those trappings are for egos and good times, not for charities or for marketing."

Arnold Palmer would beg to differ. "Golf has been a great mode of entertainment for businesses to promote themselves and reach new customers. I'm not sure there is a better sport for it, in fact," said the golf legend, who hosts his eponymous event next week in Orlando, and who has been one of the world's most prolific sports marketing figures. "The last thing you really want to see in this economic environment is new reasons for businesses to cut back."

Frank is right about one thing—the need for more responsible discretionary spending of tax receipts. He might look first at the annual House Democratic Caucus Retreat, which for the last few years has been held at Kingsmill Resort Spa in Williamsburg, Va. The three-day affair at Kingsmill, which, in addition to golf and spa facilities offering "luxurious accommodations," costs an estimated $100,000 of taxpayer dollars annually. The Republicans, meanwhile, who have their retreat subsidized by the nonprofit Congressional Institute, convened in late January at The Homestead in Hot Springs, Va., another top resort with multiple courses. Poor weather, however, prevented golf being played, according to a resort spokeswoman. (Kingsmill officials would not confirm if the Dems teed it up during their visit in early February.)

Then there's the Associated Press story from March 2 detailing the nearly weekly Wednesday social gatherings in the Obama White House. Cocktails flowed. Wagyu beef, which runs about $150 per pound, was on the menu at least once. Entertainment included—what's this?—Earth, Wind Fire.

Looks like what's good for golf and business is good for the nation's top executive, too. Erik Winborn, golf lobbyist, take note.