Sponsorship Woes Not Exclusive to LPGA Tour

An article in the East Valley Tribune looks at the hard times faced by FBR, a DC based capital management firm and sponsor of the FBR Open - arguably the coolest event that isn't a major.

In February, FBR laid off 75 of its 775 employees. Last week, another cutback reduced its work force by another 70 employees, which represents about a 20 percent reduction for the year.

Add in three consecutive quarters that have totaled somewhere between $30.2million and $202.6million in losses, depending on whether you're talking about the bank or its capital markets division (FBR owns 52 percent) or both, and you might be a little concerned if you are the Thunderbirds, the civic group that stages the FBR Open.

For the record, FBR re-signed last year to sponsor the tournament held at the TPC Scottsdale for the next four years, or through 2012. That represents roughly a $24 million commitment.

Granted, FBR deals in hundreds of millions of dollars - even billions - but there are some other alarming signs.

FBR's bank stock (NYSE: FBR), which was at an all-time high of $28.70 a share when the firm became the tournament's title sponsor five years ago, has plunged to $1.75 - and that's up from a low earlier this year of $1.29.

Meanwhile the stock connected to its capital markets division (NASDAQ: FBCM) is at $5.80, down from $18.14 a year and a half ago when the fledgling company first came online, but up from a low of $4.74 in May.

So, what's the impact of this on sponsorships?

It seems pretty obvious that FBR - like many financial firms - is in serious trouble.  But, the PGA Tour seems acutely unaware of that fact.

Rick George, the executive vice president and chief of operations for the PGA Tour, responded: "We're planning to have another great FBR Open again next year."

Asked if the PGA Tour was aware of FBR's financial struggles, George, who took over his new duties just a few months ago, said: "No, I'm not in tune with that."

But George did say that "in general" the Tour is well aware of the overall economy as it relates to its sponsoring corporations, "not just banks and financial institutions.

"We're fortunate to be fully sponsored and feel great about our future,'' George said.

Hmm, you would think that the Tour knows the financial sector is in deep doo-doo and the specific impact that reality has on their sponsors.  If not, this will stun them:

With America's financial sector struggling mightily, it is significant to note that 15 of 37 PGA Tour regular-season events - major championships and fall season excluded - are sponsored by banks or investment firms.

That's approximately 40 percent of the primary-event sponsors.