We are in the midst of an interesting time in men’s professional golf. Not the upcoming U.S. Open, constricted summer schedule, fear of Zika or the fight for world No. 1. We are in the midst of a naming rights case study. The timeline:
May 26, 2016 – The Dean & Deluca Invitational tees off
The announcement that Colonial had a new title sponsor came earlier this year, but the reality that the tournament’s official name wouldn’t include the word "Colonial" for the first time in seven decades never really set in until the week of the event. Announcers across all platforms seemed somewhat confused because tradition had always kept the name of the hallowed ground on the tip of our tongue.
It was, indeed, a Texas Two-Step of nomenclature all week, compounded by the fact that it took me until the weekend to finally grasp that Misters Dean and Deluca were selling me fine food, not fine clothing. It has been the sponsorship story of the PGA Tour season, and a shrewd marketing move, despite any rumblings from beyond by Ben Hogan.
June 1, 2016 – The World Golf Championships moves event from Trump Doral to Mexico City
“The decision made here was based on the reality that we were not able to secure sponsorship for next year's WGC at Doral or for out years for that matter,” PGA Tour Commissioner Tim Finchem said the day the news broke. He would go on to say that the Tour is neutral when it comes to the politics of Donald Trump and shared the various golfing collaborations between the two power brokers.
What wasn’t said was what any sponsor thought of Trump’s politics, or the association with them. It’s safe to say those thoughts were inferred.
June 9, 2016 – The FedEx St. Jude Classic tees off in Memphis
Quick, name the two companies, other than FedEx, who have sponsored this regular Tour stop since 1986. If you answered Stanford and Smith & Nephew, you win a rack of ribs from Rendezvous. You may not watch a ton of golf this weekend, but when somebody asks you where the Tour is playing this week, chances are “FedEx” will be in the answer.
June 9, 2016 – Shell announces it is stepping down as sponsor of the Houston Open
The move won’t take place until 2018, which means it will be 26 years of affiliation coming to an end.
When any company is looking into sponsorship, there are generally three major areas of measurement most used to judge the ROI:
- Media exposure generated
- Product sales
- Increased brand awareness
No two PGA Tour tournaments are equal when it comes to value, making the prospect of being a title sponsor even trickier. What this three-week stretch of sponsor headlines shows is how there is no direct correlation between tournament value and sponsor ROI.
There were more eyeballs on the Memorial last week than there will be on Memphis this week, but you can’t say that Nationwide Insurance is getting more value out of its affiliation than FedEx is this week. (Bear in mind, the shipping company is forking over a fortune for the year-end points race as well)
FedEx has trucks on the tee, a plane (named after a cancer patient) dedicated on the course and the track record of being a 30-year supporter of a tournament and community. In terms of brand awareness, FedEx is up there with John Deere in terms of owning the title of a tournament, even more so than Honda in Palm Beach (the longest active sponsor relationship) and AT&T at Pebble Beach (it’s Pebble Beach). Sometimes, it’s not the quality of the event you sponsor, it’s the quality your sponsorship is allowed at the event.
Which brings us to the dichotomy in Texas. Shell leaving is a shock to Houston but has likely financial consequences rooted in barrel prices, not Nielsen ratings. Unlike the goodwill generated by local heroes FedEx and John Deere, Shell has run out of earning any ROI from a future investment. It’s a casualty of business that will have us mispronouncing a tournament name in 2018 and beyond.
Enter a company like Dean & Deluca. The media exposure (especially in Fort Worth, where the company is expanding) is massive for a niche, high-end organization seeking visibility. Will more gourmet cheese and coffee move off the shelves because of Jordan Spieth’s chip-in on 17? That may be too hard to measure, but we now know what Dean & Deluca do. That’s important. Mission accomplished in 2016. By 2020? A boost in sales may be needed to justify the price tag.
That price was set by a tournament that now loses its name for the first time in existence. Does that diminish the plaid jacket? Probably not, but you know the members are keeping a close eye on the grandstands and TV numbers to close out this decade. It has been a survival test for the leadership of Colonial Country Club, and an international grocer is now the ticket to an unsure future.
With survival reliant on the financial backing of a title sponsor, what happened at Doral is the example of the powder keg lurking within the system. One unpredictable entity (in this case, the course owner) can alter the history of a long-term stop. You have to get it right. Is Memphis a better stop than Miami? Many would argue ‘no’ (I would say ‘yes’) but it has stability, a sponsor relationship and a marriage that has no visible future speed bumps.
The lesson from this case study: Nothing is guaranteed, but hard work to establish a true sponsor partnership can be the key to lasting on the PGA Tour schedule. Failure to land a perfect sponsor partner will lead to uncertainty. They are sleeping easier in the Quad Cities tonight than in Houston.