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For pro golf venues, the pay is in prestige
Innisbrook has some concerns in working on new Chrysler contract.
By BOB HARIG
Published March 2, 2006
MIAMI - For more than four decades, the PGA Tour has been coming to Miami in March and putting the Doral Resort on the map. Now part of a sprawling landscape, Doral is on the western edge of the city but used to be in the middle of nowhere.
Just about anyone who follows the game knows about one of the most famous destination resorts in the world. The "Blue Monster" course, where the Ford Championship at Doral begins this morning for the 45th time, is as well known to golfers as South Beach and Coconut Grove.
The same sort of prestige awaits the Copperhead course at the Westin Innisbrook Resort in Palm Harbor when the PGA Tour moves the Chrysler Championship to March next year.
But while the tournament was hailed as one of the biggest winners in the reshuffling of the PGA Tour's new, condensed FedEx Cup schedule, resort officials were not so quick to agree.
They initially expressed dismay about lost revenue during one of the busiest times of the year, preferring the event remain in October. And they are concerned about the logistics of staging a tournament this October and again next March.
"We all need to recognize that having a tour event at a destination, whether you're trying to sell real estate or trying to combine a resort and a membership situation ... it's a great thing," said Jay Overton, Innisbrook's director of golf. "It's something everybody wants to have."
Overton said negotiations continue with Suncoast Golf Classic, the non-profit organization that owns and operates the tournament. The PGA Tour gave Suncoast Golf the March date with the understanding that an agreement would reached with Innisbrook.
But that has proved to be challenging. Tournament director Gerald Goodman said the event will pay a "significant" increase to Innisbrook for course rental in a new contract that would begin in 2007 and run through 2012.
Innisbrook, despite negotiating a higher fee from the tournament, said it cannot make up the revenue from displaced business; March is high season, with tee times on the Copperhead going for more than $200 per round.
Operators of other tournament venues, however, say those losses are worth it.
"There are positives and negatives, but there are a lot more positives to having a full-field PGA Tour event," said Joel Paige, the former president of Doral who is on the Ford Championship's board of directors. "Obviously, most of it has to do with marketing. The exposure, especially when it's cold up in the Northeast ... that's a big piece of it. There is a creation of a legacy. Doral has been around so long, and to be part of that tradition is certainly something to be proud of.
"At one time, they told us (having the tournament) was like $7-million worth of marketing value through the ripple effect, with all the times the name was used, all the exposure on television. It's unbelievable."
At the TPC of Tampa Bay, a week's worth of tee times were lost during the Outback Steakhouse Pro-Am, but general manager Brady Boyd said having the pros play his course is good for the future.
"It's a niche that very few people have," Boyd said. "The feedback we get from surveys is that a lot of people choose to play here because we host a tour event. If we didn't have this event, our revenues long term, I'm confident, would not be the same because we would lose that niche. We wouldn't be as special."
When Arnold Palmer purchased the Bay Hill Club & Lodge in Orlando in the late 1960s, one of his initial goals was to get a PGA Tour event. For Palmer, hosting a tour event would be a source of pride. But he also knew it would be good for business.
"The answer is that it does help," said Palmer, whose Bay Hill Invitational is in two weeks. "It doesn't matter what your purpose is, if it's just for history or for an acknowledgement of the golf course and how good it is. There is no denying that it is a good thing.
"I suppose there are some negatives but they have to be in the lower number of things. You lose your course that week. You have people three or four weeks in advance of the tournament on your golf course and, to some degree, disrupting what would be the normal course of play. ... There are a lot of things if you are looking for them. How major are those negatives? We don't like to think it's a big deal."
Later this month, the Players Championship will be played at the TPC-Sawgrass Stadium course in Ponte Vedra Beach. Hotel rooms at the resort can go for more than $400 per night, with greens fees around $300.
David Pillsbury, chief operating officer for PGA Tour Golf Course Properties, said it would be difficult to charge those rates without the tournament exposure.
"Without the Players Championship, No. 17 (the par-3 island hole) would be the best-kept secret in golf as opposed to the most-known hole in golf," Pillsbury said. "What's the value of the Players Championship to Sawgrass? It is Sawgrass. The Players Championship is why people want to come experience this golf course."
Deals between tournaments and their host venues vary. At the TPCs, tournaments get the course for free. But most tournaments pay a base rental fee and that may or may not include office space, rounds of golf for entertaining, catering, outings, etc. The tournament and the venue may share in revenue, such as concessions and merchandise sales.
So while Innisbrook is trying to make up for what it says will be lost revenue, the tournament will have to come up with more funds through extra sponsorships, higher pro-am fees and ticket sales to make up the difference while continuing to donate its proceeds to charity. Making the situation more confusing, Innisbrook is for sale.
"We want to be at Innisbrook," Goodman said. "The PGA Tour gave us the contract because of the Copperhead. We feel confident we will reach an agreement."
When they do, the resort is bound to prosper, at least in the long run. According to the PGA Tour, television ratings for March events are four to five times higher than in the fall. There is more interest leading up to the Masters. And a good portion of the country is still experiencing cold weather and yearning to play at a place like Innisbrook.
"In a world where you're trying to find ways to be different, hosting a PGA Tour event allows you to showcase your golf course and the challenge your course provides for the best players in the world," Pillsbury said. "It's the only sport you can watch on TV and you can go hit a shot on the same hole with the same ball and the same iron. You can't go to Yankee Stadium and try to hit one out of the park. It's a terrific marketing opportunity."