Source...  www.Golfbiz.net

Wall Street, love it or hate it, was the entity that recognized first the dire straights financial institutions were and remain under. While it appears the Federal government is prepared to lend a helping hand, the sector has been under pressure for quite some time and its unlikely to be remedied overnight.

Golf is certainly big business and financial institutions along with automakers have been funding partners to the PGA Tour for many years. With both the challenges ever present in the US economy along with problems within the financial community, it puts the PGA Tour in somewhat of a precarious position. Golf is believed by some to be unaffected by the economy, but that isn't necessarily the view of the PGA Tour Commissioner.
"We are impacted by the economy and the economic challenges like everybody else," said Tim Finchem. "We have a lot of customers and sponsors in economic sectors that are impacted negatively by the volatility in the economy. Thus far, we have not suffered any major damage. But clearly, if the instability were to continue for a sustained period of time, we will have real challenges."

Currently the PGA Tour, Nationwide and the Champions Tours are fully sponsored. But the current economic state of affairs has Finchem's attention. "It is of major importance to us. We're very focused on it, and we're talking to lots of companies on a regular basis. But at this point in time I'd have to say, looking back on what's happened, that we feel delighted that we're not under more pressure than we are. But everybody is getting impacted, as we are, as well."

The Commish acknowledged that the Tour has some options at its disposal in the event of change with its sponsors. "We have operating reserves that we can draw upon. Normally we would let the market just support any kind of issues we had with sponsors," he said. "If this downturn is extended or causes deeper problems for an extended period of time, that may be more difficult.

It's way too premature to suggest that we might have to resort.  But even with reserves, in a worst-case economic scenario we could face retrenchment. I don't see that happening at this point, because even though there are parts of the economy that are very, very challenged, there are other parts that continue to do quite well."

The idea of prize money growing year over year was addressed with Finchem and he stated that trend doesn't have to continue nor would it be a negative factor if it were to happen. “No, I don't think they (purses) have to be going up every year, and I'm not just saying that because we're in an economically challenging situation,” Finchem said. “But I do think there are a number of barometers or measuring sticks on how we are progressing as a sport. In our sport, one of those is charity dollars, because that largely represents the net revenue of our tournaments. Does it mean that any kind of retrenchment in the level of purses or flattening of purses is a negative? Maybe not. But in terms of our mission, which is, number one, generating benefits, direct and indirect, to players; raising money for charity; and helping grow the game, going down is not consistent with where we want to go.”

Finchem added he doesn't think if the money involved were to remain constant or drop off it would negatively affect the audience who watches the product. “But whether the fan would sort of turn off their enthusiasm, I doubt it. I think the fans pay some attention to the dollars, but they're more impressed with what the players are doing inside the ropes. There was never any better indication of that than at the Ryder Cup.”

But the market volatility is something the PGA Tour has been aware of for more than the obvious reasons. “Mergers within the financial service sector can hurt us because a company winds up with two big events and they have a customer need for really one. We'll see how that shakes out; that's an issue,” he explained. “We have a very significant sponsor on the Champions Tour, Constellation Energy. They had to sell the company to Mid-American for reasons that were related to the same turmoil in the markets. So now the new owner, to maintain continuity with that sponsorship, the new owner has to be comfortable with the sponsorship of the Senior Players Championship. So there are a lot of ramifications to it.”