Spending spree on golf

SIMPLY GOLF

Golf to many may seem the ideal sport for sponsorship. Sure, but accompanying this phenomenal growth has been a bag of problems, vis-a-vis sponsorships.

Many companies have fallen by the wayside, but with the US PGA Tour constantly on the lookout for new product associations, new sponsors are coming along.

With the way it is growing in terms of money, there have been a lot of sponsorship difficulties in the last few years. The US Tour, which had on offer just around $53 million in 1990, was worth over $240 million in 2003.

The average price tag for a tournament on the US Tour is now reaching close to $5.5 million. With about 48 events scheduled during a year "" some weeks have more than one event besides which there are events in weeks when Majors or World Golf Championships are scheduled "" the purse is bulging from all sides.

Traditionally in the US, the big sponsors have been automakers, insurance companies and consulting companies. In 2003 as many as 11 events were backed by automakers, with Chrysler putting their stamp on four and Buick on three.

Many insurance and consulting companies, facing a huge crisis in the US, have been going easy on expensive sponsorships.

At the same time, many sponsors are pulling out or facing difficulties as they face a lot of uncertainty. Many companies have filed for bankruptcy or have simply tightened their belts as a result of which many events have had to change their sponsor frequently.

Yet the US PGA Tour continues to flourish simply because the number of companies wanting to step into the golf market is huge. When one backs off, there are many waiting to fill in. And there are various new segments and products wanting to come in.

The new segment includes banks, a phenomenon previously seen in Europe. Bank of America signed up for the Colonial and immediately attracted huge attention as it gave Annika Sorenstam a start.

Then there is Deutsche Bank, which backs an event in Europe "" which Tiger Woods always plays. With Woods on their mind, Deustche Bank signed a four-year deal to back the TPC at Boston, where again Woods put in an appearance in 2003.

Sometime back the Royal Bank of Scotland managed to get their logo onto Jack Nicklaus' bag. Then there is United Bank of Switzerland which sponsors the Warburg Cup, a match between the US and Rest of the World.

All these banks, with huge interest in Europe, see the US as a good market and golf as the route to get to these new clients.

The latest product segment to hit the PGA Tour are anti-impotence drugs, which the industry estimates as having a billion-dollar-plus market.

In mid-2003 GlaxoSmithKline and Bayer AG reached an agreement with ABC Sports under which their product Levitra was the title sponsor of the hugely popular 2003 Skins Game, which featured Annika Sorenstam, Fred Couples, Phil Mickelson and Mark O'Meara.

It was a $1-million event played at the Trilogy Golf Club in California. The skins game, which is essentially a made for TV event has one of the highest ratings among golf events.

A few weeks later, a new entrant into golf was another manufacturer of an anti-impotence drug with the name, Cialis (pronounced see-all-iss), which is currently sold in 45 countries. Eli Lilly and Co and Icos Corporation is the joint venture behind Cialis.

With GlaxoSmithKline and Bayer AG first entering the professional football and baseball in the US, for Eli Lilly and Co and Icos Corp a big agreement with the PGA Tour and golf was most logical.

Of course, the makers of Levitra have also kept their foot in golf with the skins game for four years from 2003 onwards. So, now we could well see a new battle on the golf courses, one between producers and manufacturers of anti-impotence drugs.

It is quite possible that in India, too, we will soon see new segments making an entry into golf in the next few years.

Insurance, telecommunication and IT companies could be the new entrants into Indian golf, for those are the companies, which are going and competing against each other.

For the present many of these companies use golf illustrations to attract customers. The next step would be to actually get into it.