"To have someone like Steinberg in the room when decisions were being made...Can you put a price on that?"

Thanks to readers Scott and Noonan for this Robert Bell story exposing the interesting relationship between IMG's Mark Steinberg and PGA Tour brass in delivering an improved 2007 date to Greensboro despite having no sponsor on board.

In May of last year, Brazil suggested to Long and other foundation board members that he contact Steinberg about lobbying on behalf of Greensboro.

Brazil knew the tournament, which had struggled in recent years under the Greensboro Jaycees' direction, was turning the corner. The Jaycees were about to relinquish control of the event to a board of directors made up of some of the Triad's most influential business leaders -- a move that would give the tournament much-needed credibility with the tour.

The problem, Brazil said, was getting the tour to recognize this. Like other tournament directors across the country, Brazil couldn't get an audience with PGA Tour Commissioner Tim Finchem, who was counseled in the restructuring by two trusted advisers.

One was Ed Moorhouse, the tour's executive vice president.

The other was Steinberg.

This is fun... 

Finchem and Moorhouse did not return phone calls, but Henry Hughes, chief of operations for the tour, said Greensboro did not receive consideration over other tournaments because of Steinberg.

"But certainly when Mark comes to us with an idea, the tour is going to listen," Hughes said. "That's what we did in this case. He's very knowledgeable on this business. It would have been foolish not to consider his expertise."

Long said Greensboro had little choice but to hire Steinberg. Since he sold his insurance company three years ago for $403 million, Long has been inundated with business and charitable requests. One of his financial advisers is charged with screening who gets an audience with Long and, more importantly, who doesn't.

"There's a big difference between sending a letter to an executive and knowing someone who can get you an audience," Long said. "A letter might sit on the executive's desk for weeks -- if it even gets to him. To have someone like Steinberg in the room when decisions were being made ... Can you put a price on that?"

Of course, now that we know this final event before the FedEx Cup finale amounts to a shootout between spots 140-150 for those final places in the playoffs, and that it's before a stretch of four straight weeks of golf, is it really that great of a date?

Why would Tiger, Phil or Vijay or any other stars play Greensboro after playing the PGA/WGC Firestone and before the four-week stretch?

City Of Detroit Looking To Sell A Ross Design For Homes

I just love how the LLC that wants to build a housing development on Donald Ross's Rackham GC calls itself Premium Golf LLC. What a world.

Club Corp Up For Sale

You can have everything but Pinehurst if you so desire. Just call Goldman Sachs. I wonder if the USGA President is helping broker the deal?

And another question. Since the manufacturers think golf is in such great shape, I wonder if they'll be making offers? 

Golf Pitches Found Takers

From E. Scott Reckard in Sunday's L.A. Times Business section:

For $25,000 or more, investors were told they could own part of a company developing luxury resorts and residences, authorities say. One supposed project was next to an Arnold Palmer-designed golf course. At another resort, Greg Norman's company had been hired to design the course.

The salespeople pitching the deal also dropped the names of other golf greats, authorities say, and urged investors to get in quick before the company went public.

Carolina Development, the Irvine company peddling the real estate partnerships, recruited many of its 50 salespeople from an addiction recovery program operated by Saddleback Church in Lake Forest, authorities say. To help endear themselves to Christian investors, they said, some sales agents distributed copies of "The Purpose-Driven Life," a best-selling inspirational tome by Saddleback Pastor Rick Warren.

But Carolina and its founder, Saddleback member Lambert Vander Tuig, had other motives, according to the Securities and Exchange Commission. The SEC has accused the Rancho Santa Margarita man of fleecing about 700 investors across the country and in Canada of $50 million by exaggerating Carolina's holdings — in some cases fabricating its ownership of property and in other cases disguising the fact that it held only options on land or had taken on heavy debt to buy it.

This year, the SEC filed a civil complaint against Carolina Development, its 47-year-old founder and its vice president and sales chief, Jonathan Carman, 43, of Aliso Viejo.

And...

Authorities say that Warren and golf greats Palmer and Norman had no role in misleading investors. Warren said he was unaware of the alleged scam and did not know that his book was distributed by sales agents for Carolina, until he was contacted recently by a Times reporter.

And...

Alastair Johnston, chief operating officer of Arnold Palmer Enterprises, said his company became aware of Vander Tuig's operation last year, when a stock brokerage approached Palmer with questions about Carolina's investment pitch.

"It was quite clearly, in our opinion, a violation of North Carolina securities laws in making misleading statements," Johnston said.

An attorney for Palmer wrote cease-and-desist letters to Vander Tuig in July, August and October, warning that he was infringing Palmer's commercial rights and breaking trademark and securities laws by "falsely implying an endorsement," Johnston said.

Johnston said the company complained to the SEC and North Carolina regulators late last year when the misrepresentations continued.

Norman's golf course design company, by contrast, went into business with Carolina Development, accepting a $200,000 down payment for course architecture, according to Thomas Seaman, the court-appointed receiver.

Bart Collins, the president of Great White Shark Enterprises, declined to discuss how his company linked up with Vander Tuig. But Collins said it was not uncommon for Norman's firm to "enter contracts with people who own a piece of land and are developing private communities."

"We try to do what we can to protect ourselves from this type of thing," Collins said. "We try as best we can to complete our due diligence."

Frank Thomas: 10 Clubs and More Rough

I'm not sure what's more disappointing: that former USGA technical director is advocating more rough and 10 clubs, or that the New York Times continues to print his pieces, even putting the latest column on the main Op-Ed page. 

In an email sent out to his subscribers, the headline read "THOMAS PROPOSES TEN CLUB SOLUTION FOR TOUR," and the subheader said, "Limiting club selection and focus on course set up can help allay technology fears."

In "Golf's Power Failure," Thomas writes:

Now officers and elders of the golf association — which, along with the Royal and Ancient Golf Association of St. Andrews, Scotland, writes the game's rules — have asked manufacturers to study the feasibility of a ball that would travel on average 25 yards less than those used now.

This idea is wrongheaded in several ways. To begin with, mandating such a ball would affect all players, and the vast majority of golfers don't hit the ball too far. (Nor do we hit the ball nearly as far as we think we do; well-supported data indicates that the average golfer hits a driver 192 yards — while thinking that he hits it approximately 230.) It's safe to say that for most of us the great layouts created a century ago still provide plenty of challenge.

Which is why Thomas is advocating change, but not before questioning recent action taken by the USGA to mop up for many of the things that got by his watch:

Even before addressing the ball, the rule-making bodies took several foolish steps. They instituted limits that allowed some spring-like effect from the club faces of high-tech titanium drivers (a phenomenon that let the club itself enhance the ball speed at impact for the first time), while restricting both the length of a driver (which will affect few players) and the permissible height of a tee (which is downright silly). They have also explored limits on how much a club can resist twisting at impact; such a change, like the reduced-distance ball, would have a much greater effect on the average golfer than on those who play for prize money.

Ah, so since this debate has always been part of the game and we should relax a bit, Thomas suggests doing something about it:

The goal should be to keep professionals from mindlessly bombing away while not unnecessarily hurting the average player. I have two suggestions. First, tournament courses should be set up to punish long but wayward hitters by narrowing fairways and growing higher rough (the longer grass along the margins of the hole).

Yes, it's worked so well and cures many sleep disorders. And really, when you consider that fairways are now 20-25 yars, they have so much room to get narrower. I saw the width of a ball would be fair.

The other major change would address the imbalance that today seems to favor power so strongly over touch and finesse. To place greater emphasis on the old skills required to work the ball and to hit less-than-full shots, professional players should be restricted to 10 clubs in their bags instead of the current 14.

What do you think manufacturers would hate more, a ball rollback that doesn't impact anyone under 110 mph, or Tour pros only uh, "branding" 10 clubs instead of 14?

And they say I'm anti-technology!

SF Chronicle On Golf: The Green Blues

Thanks to reader Scott for this Susan Fornoff story on the state of the golf business in Northern California. A few highlights, or lowlights:

Much easier to find are stories such as the one in the Feb. 18 editions of The Chronicle, which reported that San Francisco city golf courses, including the newly renovated and universally praised Harding Park, operated more than $500,000 in the hole in the 2004-05 fiscal year. In Napa, a pretty, vineyard-lined 27-hole complex called Chardonnay went into bankruptcy and emerged under new ownership.

Same story in Antioch, where Roddy Ranch, a player-friendly and media-acclaimed golf course, couldn't sustain itself without homes on the property and went into bankruptcy, emerging in the hands of Black Mountain Development of Pleasanton and Pacific Coast Capital Partners of Sacramento with plans to eventually build 700 houses.

Ditto in the mountains of Plumas County, where a well-marketed and challenging golf course, aptly named the Dragon at Gold Mountain, landed in bankruptcy after the lots sold and the course and clubhouse couldn't make a go of it. Yet just up the road, a new course opened last summer, with developers Lowe Enterprises ga-ga over the possibilities of Grizzly Ranch, where private golf memberships are going for $50,000 and home sites start at $150,000.

Mike Mohler, the project manager, said the company prefers communities with plenty of amenities. "Would we have built a golf course without real estate? Probably not."

Probably most certainly not. The game that experienced a boom in popularity with the coming of Tiger Woods and the strong economy in the late 1990s is busting in the 21st century. Nationally, rounds declined by 3 percent in 2002 and 1.5 percent in 2003, bounced up by 0.7 percent in 2004 and dropped 0.1 percent in 2005, according to the National Golf Foundation.

And...

"What I'm seeing is that everybody's running very aggressive deals," said Hiddenbrooke director of golf Matt Ochs, who brought golfers out in February for golf and lunch at $50. "We need to stop building golf courses and we need to start growing golfers."

Even golfers agree there are two things wrong with the game: It's expensive and time-consuming to learn and play. Eighteen holes take a minimum of four hours; add the drive, the warm-up and the wind-down, and there goes the day. Green fees range from $23 to walk 18 at Castro Valley's Willow Park on a weekday to $180.20 with cart on a weekend at the seaside Half Moon Bay Golf Links at the Ritz Carlton. In the Bay Area, weekend golf costs more than $60 at all but the most budget-friendly municipal courses.

"The new course in Pleasanton has a $60 weekend green fee; ours is $95," said Truebridge of the Bridges. "If you're a senior or are on a budget, where are you going to go play? We're getting 43,000 to 45,000 rounds a year. I'd like that figure to be 50,000 to 55,000, yet I'd like to get the green fees over $110."

Add to fees the cost of lessons and equipment -- and the luxury of having the time the game takes to play -- and it's no wonder that homeowners are perfectly comfortable having a couple hundred golfers stroll by the backyard every day. It's not as if the visitors are going to jump the fence to take the patio furniture.

"Golf obviously adds value to real estate," Krah said. "People like living on a golf course and are willing to pay a premium to do that."

What about the cost to the developers? "Golf courses are a million dollars a hole, that's the round number," he calculated. "Directly, you get premiums back -- you can charge somebody an extra $50,000 to live on the golf course instead of having to stare at the neighbors."

A million dollars a hole? I forget...that copper irrigation piping...

So real estate sales can safely cover the golf course building costs. Now players have to cover the annual maintenance and staffing fees. And because the rule of thumb seems to be that residents will account for no more than 10 percent of the annual rounds, 90 percent of the players have to come from somewhere else.

The golf course's reputation with the media and players influences that, which is why the Tahoe Mountain Club is managing to fill Old Greenwood in Truckee even at $170 per round. East West Partners, developer of 99 home sites and 174 resort homes on the property, hired golf legend Jack Nicklaus to design the course on a gorgeous piece of land, guaranteeing great publicity and playability.

NBC announcer Johnny Miller put his signature on the Bridges, which had a dry creek bed on the property that couldn't be filled and thus has a reputation for being tough, the kind of place where players lose a lot of golf balls.

With Respect To Innovation Head Room...

In a Copley News Service story titled "Driving For Green," we learn about the state of the golf ball business and its future. It's mostly a look at Titleist's dominance and how much the golf ball has impacted the game (oops...they're not supposed to say that...it's the agronomy, stupid!).

Here's the good part. After explaining how a ball rollback would be detrimental to the game (well, maybe someone's bottom line), we get this:

Any rollback would make it difficult for golf ball makers who spend big bucks on research and development to improve their products, said James Hardiman, an analyst who covers Callaway for FTN Midwest Research. "That's the big fear," Hardiman said. "It's not only will the USGA limit future technological advances but whether they'll roll back the standards of today."

Even now, there is a real question about how much better balls can be made within the current USGA specifications. But manufacturers like Callaway and Titleist insist that they are continually working on improvements.

Callaway's Yagley said the company's HX balls use a hexagonal dimple pattern as opposed to a more conventional round pattern to provide golfers with better aerodynamics as a way to distinguish itself.

"They'll see our HX golf balls stay in the air a little bit longer," he said. Still, golf ball makers also admit that the sea change seen with the switch from wound core to solid core balls will probably not occur again anytime soon.

"With respect to innovation head room, we believe that the limits placed on golf ball performance by physics and current regulations leave very little room for additional distance gains," said Acushnet's Nauman.

That fact may make it harder for ball makers to differentiate their products, especially for those trying to challenge Titleist. "The big player in the golf ball business is clearly Titleist and it remains to be seen if anyone can put a dent in their business," McAndrew said.

So please, help me here because I'm just kind of naive.

If you are the big player, and your position is that there will be little room for innovation or gains, why not solidify your dominance by supporting a rollback that only impacts top level players?

Two Views On Golf Industry

Blaine Newnhan writes about the struggles of the Pacific Northwest golf business while Chad Graham paints a different picture of the situation in Arizona, where they feel the slump has ended. If nothing else, check out the Newnhan story to see the pictured golf hole and its subtle mounding.

CEO Challenge

Slow news day. Until this arrived in my email box. [Sarcasm in brackets, courtesy of this site's CEO.]

Who is the World's Best CEO Golfer?

BOULDER, CO - (November 17, 2005) - There has been much debate about which CEO is the best golfer. [There has?] In the past, rankings have been issued based on handicaps, but there has never been a tournament to bring together the best CEO golfers and find out who really deserves the number one ranking in head-to-head play. [Gee, I wonder why?]

CEO Challenge LLC is pleased to announce a series of CEO Golf Challenge events at six of the greatest golf tournaments in the world, with the ultimate goal of crowning the world's best CEO golfer! The CEO Golf Challenge will be held during the following tournaments in 2006:

The Masters
The U.S. Open
The British Open
The PGA Championship
The Players Championship
The Nissan Open

Each of the six events includes a 36-hole CEO Challenge tournament, deluxe accommodations, a Saturday Series Pro-Am tournament with PGA TOUR pros, [Lucky them!] and VIP access to the professional tournaments. [Clubhouse badge.]

Participants must be a CEO, Chief Officer, or company President, [Hey, I'm eligible!] and the field at each event will be limited to 28 golfers to ensure an intimate atmosphere in which CEOs will have the opportunity to get to know each other. [Cuts down on the potential witness list for the class-action suits.] The top four CEOs from each of the six events will be invited to the CEO Golf Challenge World Championship to compete for the title of World's Best CEO Golfer! [Hey, maybe they can have a CEO-Am at the World Championship?]

"Five years ago we came up with the concept of organizing competitions for CEOs, starting with the CEO Ironman Challenge," said Ted Kennedy, President of CEO Challenge LLC.  "It was only natural that we expand into golf events, given that most CEOs love golf and love to compete."

Kennedy continues, "We drew up a set of criteria for making this a first-class experience from start to finish, and found the perfect partner in the Saturday Series Pro-Am that let us hit every mark. [Nice CEOism there.] They have the expertise in organizing tournaments, and, being a PGA TOUR official licensee, [notice he got it right, Tour in caps] they have a close association with all the major PGA TOUR events, and great relationships with PGA TOUR Pros.  Through this partnership we will offer a series of events that will over-deliver to the high expectations of participating CEOs.  And, we will finally see who really is the best CEO golfer." [Let me mark my calendar.]

Kevin Laura, General Manager of the Saturday Series Pro-Am, stated that his organization is tremendously excited about this unprecedented and innovative program. "We are thrilled to be involved with the CEO Golf Challenge.  They have the expertise in designing events for CEOs, and we have the expertise in designing Pro-Am events for some of the largest corporations in the USA. It's a great relationship that we're sure will be a huge success."

Laura went on to underscore the basic philosophy of the joint effort. "Determining the best CEO golfer is a fun aspect, but what the CEO Golf Challenge is really about is affording hard-working company heads the chance to spend a few days 'inside the ropes' at the greatest golf tournaments in the world. There's no other way to do that unless you're a sponsor. Add to that a private tournament for the CEOs themselves on some magnificent courses and it's an unbeatable, full-immersion golf experience." [Full immersion? Jot that one down Commissioner]

Added Kennedy, "We made sure that CEOs who are not great golfers but simply love the game will have a wonderful, once-in-a-lifetime experience as well. Kevin and his team have designed a two-in-one tournament format to ensure that the higher handicappers are right in the middle of the competitive action throughout the whole event."

CEO Challenge LLC capitalized on its deep experience organizing previous CEO challenge events to design an all-inclusive program for each location that includes:

-    Three nights first-class accommodation close to the tournament, usually at the same hotel where the PGA TOUR Pros stay [Oh and won't the pros be grateful for that.]
-    Tournament pass that, in most cases, includes access to the VIP Hospitality tent or clubhouse
-    CEO Challenge tournament and Awards Celebration Dinner [That'll be a barnburner.]
-    The opportunity to play with two (2) PGA TOUR Pros at a Saturday Series tournament
-    CEO Golf Challenge apparel and customized gifts
-    Charity contribution to the Prostate Cancer Foundation on behalf of each participant
-    Meals, snacks, and beverages
-    Transportation to and from the host hotel to all golf courses

About CEO Challenge LLC
CEO Challenge LLC (http://www.ceochallenges.com) is a company that specializes
in designing high end 'inside the ropes' exclusive multi-day sport experiences for CEOs.

For more information on the CEO Golf Challenge, including entry information for each event, please visit http://www.ceogolfchallenge.com, or contact Ted Kennedy at Ted@ceochallenges.com, or 720-222-3043.

Search For a Tee Time May Lead To Tokyo

From an L.A. Times business section story on the semi-revival of Japan's golf industry:

Golf is booming in South Korea, trickling down from the elite to a new generation of golfers in their 20s and 30s who are flooding the country's courses — all 147 of them. Problem is, it does not take long in a country of 50 million people to flood that many courses. Teeing off, especially on weekends, has become a challenge for all but the best-connected businessmen and government officials.

Fortunately for golfers such as Sung, there are plenty of good-quality and relatively empty courses just an hour or so away. By air. In Japan.

Japan is bursting with golf courses, 2,458 to be exact, and they're becoming alternative links for South Korean golfers desperate enough to fly abroad for a chance to drive. Sung has made the hop by plane to Tokyo from Seoul three times in the last two years, visiting Japan for a couple of days to play several rounds and take advantage of nearby hot springs.

In the last five years, Dallas-based Lone Star Funds and Goldman Sachs Group Inc. have been scooping up financially troubled Japanese golf courses, almost 200 between them. The firms are now the top two golf course owners in Japan, where golf is a $10-billion-a-year business.

Both set up management subsidiaries that aim to turn a profit by buying supplies such as sand and fertilizer in bulk, and employing American-style management techniques — slicker pro shops and carts instead of caddies to move golfers around the fairways faster. Clubs are reporting that the number of rounds played is rising, and both Goldman Sachs and Lone Star have filed applications with the Tokyo Stock Exchange to take their Japanese golf subsidiaries public in the next few months.

The new American management is also democratizing Japanese golf. The two companies have lowered greens fees and let nonmembers onto once-private courses, have encouraged more women to play and have persuaded the Japanese to start rounds at once unheard-of early-morning hours.

Paper of Fluff

So is it me, or does this read like something from one of those glossy giveaway rags loaded with cigar ads and stories on $500 golf shoes:

Golfing on business trips, that sweet escape from the frustrations of the road, can be full of surprises. It also may be on the increase. Exactly how many executives golf on business trips is not tracked, according to the National Golf Foundation in Jupiter, Fla., but Rand Jerris, director of the United States Golf Association Museum and Archives in Far Hills, N.J., said the numbers had swelled in recent years, a trend he attributes in part to the proliferation of "best" lists in trade magazines and books.

"The same competitive spirit that drives business spills over" to golf, Dr. Jerris said. Hotels are also making it easier for guests to sneak off to the links. Several years ago, Fairmont Hotels and Resorts introduced the use of free TaylorMade clubs at many of their properties to members of their frequent-guest club.

This swell article is from the New York Times. The paper of record says there is an increase in golf travel among businessmen, with not a single number offered to back up the claim.

Ah, but the sourcing was impeccable.

Even exclusive private clubs have seen an increase in business travelers. "I see many more people flying in for the day to do business deals," said Michael R. Yamaki, the corporate officer of the Riviera Country Club in Pacific Palisades, Calif. With the boom in private-jet travel, he said, the portion of membership applications from outside the local area has surged to about 35 percent today from about 3 percent 15 years ago.

The story goes on to tell golf trip war stories and leaves you saying, ah, this is why they say a once great paper has lost its way.

Golf Industry Show

The Golf Industry Show scheduled for New Orleans in 2006 will be moving to Houston.

Benchmarking To The Rescue

Golf Business writes about the golf industry leadership convening in Monterey to discuss the state of the industry. Lots of talk of actionable data, benchmarking, models and metrics.