Return to Virginia Business - March 2003

Golf
How Tournaments Can Be Great Business Tools

by Karl Rhodes
Virginia Business
March 2003

In the glory days of golf tournaments, corporate participation was a no-brainer. It was one part perk and one part network, a great way to get the sales force out of the office and into foursomes with lots of customers and potential customers.

Ever since the late 1990s, though, the economy has been slicing into the rough. Golf tournaments are still popular, but companies are beginning to take a harder look at each event. “Eight or 10 years ago, people just said, ‘Hey, let’s have a golf tournament.’ Now people are asking, ‘What do we expect to get back from this?’” says Mike West, director of golf at Independence Golf Club in Midlothian.

If the answer to that question is merely “a day away from the office,” then kiss your tournament budget goodbye. It’s nearly impossible to justify golf as an employee perk these days. But golf tournaments can more than pay for themselves when they are used wisely to enhance networking, marketing or community relations.

The key to getting the most out of any tournament is planning. And the first step is to answer the question that West poses: What do you want to accomplish? Do you want to improve your community relations by raising money for your favorite charity? Are you trying to strengthen the relationships between your account executives and your customers? Or are you trying to promote a product or a corporate brand?

If the goal is to promote a product or a brand, it might be better to sponsor a professional tournament instead of hosting one of your own, says David R. Maraghy, president and CEO of Sports Management International in Richmond. Maraghy manages and promotes two professional tournaments in Virginia, the Greater Richmond Open and the Crown Royal Championship in New Kent County.

Crown Royal — a brand of Canadian whisky — has been the title sponsor of the New Kent tournament since 1998 in a 50-50 deal with the Virginia Tourism Corp. The tournament is televised in Virginia, Maryland, Washington, D.C., Pennsylvania and parts of West Virginia, says Maraghy. And that exposure has been important to both major sponsors. Crown Royal has enhanced its brand recognition, and Virginia Tourism has received the equivalent of “a five-hour infomercial on how great it is to come to Virginia and play golf.”
The tournament also highlights its host course, The Tradition Golf Club at Royal New Kent. “We make a little bit of money on the tournament, but we mainly do it to promote the golf course,” says Mark A. Montgomery, regional tournament director for Royal New Kent and two other courses in Virginia. “It’s also a chance to give back to the community.”

Philanthropy plays a pivotal role in corporate decisions to sponsor golf tournaments in Virginia. A prime example is the annual GE Financial / St. Joseph’s Villa Charity Golf Tournament. In its 19th year, the tournament raised $40,000 for the respite-care program at St. Joseph’s Villa. The program helps families whose children have mental or physical disabilities.

Scheduled for May 2003, the tournament “is one of many ways GE Financial gives back to the communities in which we all live and work,” says Scott Cook, the company’s community relations leader. “Giving back to the community is simply the right thing to do. It makes our associates proud, improves our hometowns and is part of our corporate culture.”

A similar relationship has evolved between the Virginia Beach Open and ACS Systems & Engineering. Tim Miller, founder and chairman of ACS, supports the tournament purely as a philanthropic and community relations endeavor, says tournament director Mark K. Carnevale, who works for the Tim Miller Foundation. This year Miller’s foundation took over management of the event from the Boys and Girls Clubs of South Hampton Roads, which remains the primary beneficiary of the tournament. ACS will contribute $250,000 this year as the tournament’s presenting sponsor.

“ACS really hasn’t used the tournament for any business-related purpose,” Carnevale says. “It has always been a charitable donation on the part of ACS and Tim Miller.” ACS is based in Virginia Beach, but none of its customers are in the area. The company designs and installs computer and telecommunications systems at various government facilities around the country.

Carnevale says, however, that the tournament’s success is based on other corporate sponsors who do use the Virginia Beach Open for marketing purposes. A typical sponsor, he says, would spend $5,000 to put a foursome in the event’s pro-am tournament. Additional benefits would include tickets to the pro-am party, special access to the course during the pro event, and recognition in the tournament program. That’s a bargain compared with sponsorship packages for events on the primary PGA Tour, where a pro-am foursome can cost five times that amount.

For 22 years, Virginia’s top PGA event was the Michelob Championship, which was sponsored by Anheuser-Busch and held at the company’s Kingsmill Resort in Williamsburg. The total purse for last year’s tournament was $3.7 million, which was getting a little too rich for Michelob’s blood. So this year Anheuser-Busch is switching to an LPGA event with a total purse of $1.6 million. “It was a business decision based on where the PGA Tour was headed in terms of purse expectations,” says Wayne Nooe, vice president of golf and club operations for Kingsmill. “The LPGA could do essentially the same things for us as the PGA was doing.”

The new tournament will be called the Michelob Light Open, and it will take place on April 28 through May 4. ESPN plans to televise the second and third rounds of the tournament, and ESPN2 will pick up the final round. The Michelob Light purse — light by PGA standards — will be the third largest on the LPGA Tour, surpassed only by those of the U.S. Open and the Evian Masters.

“Most, if not all, of the top 100 women players in the world will be here,” Nooe says. “A large percentage of our past sponsors are coming back, and we’re picking up some new ones as well.” LPGA sponsorships are more affordable for local businesses, he notes. They range from $3,900 to put a player in the pro-am to nearly six figures for skybox seats, meals, accommodations and multiple pro-am slots. “The tournament is a great opportunity for corporate sponsors to entertain customers,” Nooe says. “They can stay at a nice resort, attend nice dinners and parties, and spend two or three days with a customer instead of two or three hours.”

The Kingsmill approach is ideal for focusing on a few top clients, but if you want to involve your entire sales force and all of your customers, you may want to consider hosting your own golf tournament. Here again, planning is crucial to getting the most out of your company’s investment in golf.

Keep it simple, says Michael Hedden, who has been planning golf tournaments for the Virginia Bankers Association for the past five years. He is the association's vice president for insurance services, but at tournament time his main job is ensuring that all of the association's members enjoy their annual golf outing at The Homestead.

Hedden tries to “do the little things that make our members remember the event and want to come back and do it again.” High on Hedden’s checklist is the careful pairing of foursomes. For example, he would never put two associate members in the same foursome if their companies compete to sell similar services to the bankers. Hedden also starts the registration process two or three months in advance to get an early feel for how many people will participate in the tournament. Put as much information as possible in the registration packages, he advises. Pay for everything in advance, including meals, beverages and tips, and let tournament participants know upfront that you have taken care of all the incidentals.

On the day of the tournament, get to the course early and be prepared for some last-minute changes. Once the tournament starts, relax and have fun, says Hedden, an 18 handicapper who generally finds a way to play in the tournament himself. “Unfortunately, the person who runs a tournament doesn’t always get to play in it,” says Michael Homer, director of golf and instruction for the Golf Club of Virginia at Beacon Hill in Leesburg. But it’s important to designate one person who will coordinate everything with the club.

The main thing is to make sure your clients or members or donors have a good time. “Some people try to make it too serious,” Homer says. “They think it’s the U.S. Open. It’s just a bunch of people getting together to have some fun.”

Return to Virginia Business - March 2003