Golf and the Economy

Bob Harig has an ESPN.com piece for Outside the Lines on golf and the economy.  A lot of it covers much of the things you'd expect to hear - Wachovia and its demise (although to who is now uncertain, but important), the financial services connections of the PGA Tour, and recent sponsorship problems in various events.

Harig does get something wrong in the piece that's glaringly obvious:

There have been recent examples of companies getting out of contracts, such as 84 Lumber, which abruptly canceled its sponsorship of a tournament in Pennsylvania following the 2006 event; the tour quickly stepped in and replaced it with the Travelers Championship in Hartford, Conn.

The Greater Hartford Open, which it was originally, then the Canon GHO, then the Buick Championship for one year, and then its current namesake, was around well before the 84 Lumber Classic.  Suzy Whaley, remember?

But, it seems that a lot of the firms that are with the PGA Tour are on fairly solid footing right now.  With the exceptions of Wachovia and FBR, and sort of Morgan Stanley, the PGA Tour is not really involved with sponsors that have been in the news as potential dominos in the chain of financial companies to fall.

Meanwhile, though, Jim McGovern speculates that the auto industry's pain around the world in this slowing economy may force them to reconsider their golf sponsorships.

[T]he Tour has lost five automotive title sponsorships since the last TV contract go-round in 2006, leaving it with six, and if things don't improve in the car industry by the end of 2009, there may be further attrition.

All in all, you're looking at roughly eight million bucks a year, with a minimum duration of four years, for a total commitment of around $32 million. And that's just for run-of-the-mill tournaments; World Golf Championships and some thoroughbred events are higher yet.

Very few facts in the piece, so it's hard to tell the basis of the speculation.  But, I would argue that Mercedes and BMW will not be getting out the business of sponsoring golf anytime soon.  The German economy may be in shambles, but both of these companies are the European Tour equivalent of Buick.  Buick is in trouble as a brand, but has had modest sales successes recently. 

I would say that the one most troubled would be Chrysler.  They are just bleeding money left and right.  And, frankly, I am kind of surprised that Lexus has not put its name on a PGA Tour event because they are getting crushed in brand recognition and sales marks recently.  And with Hyundai working hard to establish a reputation in the United States as a top notch car maker (and their cars are showing it), they may want to get involved too.