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PGAT to Buy European Tour?

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Post by McLaren Wed 14 Aug 2013, 1:41 am

How did we miss this.

It is now being denied by finchem;

http://www.golfchannel.com/news/golftalkcentral/sources-call-reports-of-pga-tour-taking-over-euro-tour-premature/?cid=twitter_gc_finchem_euro_tour_report_081313

But earlier in the week the telegraph seemed quite sure that the PGAT were in the process of making a bid for the European tour.

http://www.telegraph.co.uk/sport/golf/ustour/10238366/PGA-Tour-launches-audacious-bid-to-take-over-struggling-European-Tour.html

A recent bbc article from our friend Iain carter

http://www.bbc.co.uk/sport/0/golf/23689785


The european tour has been second rate for a while now so the news comes as little surprise but I wouldn't want to see it taken over by the PGAT. The Euro tour needs to accept its place in the world and act accordingly.

Become the folksy tour with lower prize funds, better courses, more interesting locations and maybe a lot more matchplay. No point in saying matchplay isn't good for TV because no one is watching anyway.

So will this go through and if so what do you think it will mean for the world of pro golf?

Will a PGAT ownership provide a new avenue to pga tour membership in the new world without q-school?
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Post by kwinigolfer Wed 14 Aug 2013, 2:11 am

It almost looks from the Telegraph article as if this is a trial balloon launched by Paul Casey.
Sure there's more to it than that, and Ty Votaw's terse "no comment" probably adds fuel to the fire, but I'd say this would be a terrible thing for European Golf, and not much better for all but the top 30 or so Americans.
Meanwhile, the Nationalities of the five leaders in stroke-play qualifying for this week's US Amateur are:
T1: Australian
T1: British
T3: Australian
T3: Canadian
T3: British

Could be that the future of American Golf is not all it's cracked up to be. Nah . . . . . .

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Post by McLaren Wed 14 Aug 2013, 3:56 am

Just read your weekly piece and noticed you did mention this in the comments below. I knew you wouldn't have missed this.

Not sure it matters what the playing ability of future US players is, but the financial clout of the PGAT compared to the European tour seems to have produced an unstable position.

I like the idea of a European tour with prize money around the same as the web.com and played more regularly in Europe, with different formats on great courses.

Obviously the health of the spanish economy is an issue as it is the obvious place to hold events in the colder months but surely someone can think of a way round this.

Let the PGAT have the middle east swing.
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Post by JAS Wed 14 Aug 2013, 7:29 am

To be bought by the PGA Tour would be a disaster however I do see some sort of amalgamation at some point as inevitable. Ulitimately an elite world tour with PGAT & ET becoming feeders into it (the balance of feeding into such an elite world tour would become the issue - indeed the other tours particularly the Asian Tour may also want to get into any such discussions as well).

No denying that the PGAT has much more financial clout as their sponsors didn't desert them in the same numbers the ETs did in the financial crisis. Again, you have to consider the Asian input, in recent years the ET has had to to go Asia to keep the schedule reasonably full with decently sponsored events.

The ET is also a lot more cosmopoloitan and a lot more outgoing than the PGAT which is very insular. The insularity of many (not all) of the top Americans will be the biggest stumbling block to the emergence of a true world Tour.

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Post by McLaren Wed 14 Aug 2013, 7:53 am

Jas

I think the likely scenario - assuming the mens game in asia remains of relatively poor quality - is the PGAT being the main tour and the web.com and european tour's being the feeder tours.

Are we not almost in this state at the moment bar the early year middle east swing?
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Post by super_realist Wed 14 Aug 2013, 7:54 am

Will Finchem pay for American passports and transporting food over for the likes of Overton, Watson, Weekley etc?

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Post by JAS Wed 14 Aug 2013, 8:12 am

McLaren wrote:Jas

I think the likely scenario - assuming the mens game in asia remains of relatively poor quality - is the PGAT being the main tour and the web.com and european tour's being the feeder tours.

Are we not almost in this state at the moment bar the early year middle east swing?
No I don't think that's the state we're in at the moment, I think some money will flow back into the European Tour once the Eurozone economy recovers. Whilst the PGAT has more strength in depth than the European Tour. The European Tour by the same token is significantly ahead of the web.com Tour.

The simplest way I see it evolving to an elite world tour is the addition of more WGC events over time.

The PGAT is very much like the English Premiership, it falls into the trap of believing it's own hype because it has a few bob. It takes a bi-annual horsing at the Ryder Cup to give it dose of reality!!


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Post by puligny Wed 14 Aug 2013, 8:24 am

Kwini - joint number 1, Australia and Hampshire!

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Post by SmithersJones Wed 14 Aug 2013, 9:29 am

It will be interesting to see how the big money events at the end of the ET schedule impact on World Rankings and so on. I think that whilst it's a shame there have been no opposite field events over here for the last couple of weeks, it's unusual and doesn't really impact at the top level.
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Post by pedro Wed 14 Aug 2013, 10:09 pm

Funny that Casey is commenting on this story - and that he's on the players committee. As far as I know he has notoriously shown the ET the middle finger over the past many years.

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Post by Shotrock Thu 15 Aug 2013, 2:35 am

What would be insane would be for the European Tour to keep doing what they are doing and "hope" things change. I think it's a pipe dream that an improved economy will be the magic pill to get more sponsors off their wallet. Any move would almost certainly be countered by team Finchem, who clearly is captain of a much bigger and faster boat.

Mac is right IMO ... The best European professionals aspire to compete on the US Tour, which I predict will ultimately morph into a world tour. But not Greg, the ego, Norman's tour.

And another suggestion ... Play events in Europe ... Does wonders for improving ratings!

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Post by McLaren Thu 15 Aug 2013, 4:04 am

Shotrock, If the Euro change I think it has to be with the mindset of not competing with the PGAT but creating the best tour in Europe. That may mean smaller prize funds and more events in areas where people are actually interested in golf.

When the PGAT (if it hasn't already) becomes the world tour it will be the world tour in the sense it is the top tour in the world - with events on us soil -, and will have international fields. Not as you point out the shark vision where a world tour actually tours the world.
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Post by MustPuttBetter Thu 15 Aug 2013, 4:11 am

Shotrock, until the 'financial meltdown'' in Europe we went through a phase where most of the top European professionals were actually choosing to stay here - Westwood, McIlroy, Kaymer, Donald....
It has only been since the sponsors, money and events have become sparse that they have once more began to move over to the US. Unsurprisingly the best players follow the money. So not that much of a pipe dream that the European tour makes a comeback once the purse strings loosen, which they inevitably will if you know anything of economic history.
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Post by kwinigolfer Thu 15 Aug 2013, 11:13 am

I know there are several levels of detail behind this sweeping generalisation, but:
Doesn't anyone else find it more than slightly ironic that a financial crisis, precipitated in the United States (for whatever reason), creates collateral damage worldwide so that a US enterprise can consider making an acquisition of those damaged by that very same crisis? Not to mention that many of the sponsors keeping the US enterprise afloat are among the very culprits who caused the crisis in the first place - and others are from the weakened market-place.

Must admit, I find the very notion of a PGA Tour takeover as abhorrent as it is distasteful. Five years ago the European Tour was going from strength to strength . . . . . and now this?

Kudos to the always predatory Finchem (who has consistently strived to undermine the European Tour), but shame on O'Grady and his fellow sycophants.

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Post by navyblueshorts Thu 15 Aug 2013, 11:38 am

Couldn't have put it better Kwini.
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Post by puligny Thu 15 Aug 2013, 12:01 pm

Kwini. - agree. Would be a complete travesty. Maybe Murdoch will ride to the rescue - just gets worse doesn't it!

Anyone struggling to access European Tour website? Or have I missed something else re that?

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Post by McLaren Thu 15 Aug 2013, 12:08 pm

Kwini

It is true that it seems unfair in some ways that the European tour should suffer at the hands of a financial crisis which stemmed from a US market. But once crisis hit's it would seem the PGA tour provided more value for sponsors than the European tour did.

Which must be based on exposure and Tv audiences.
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Post by kwinigolfer Thu 15 Aug 2013, 12:12 pm

Mac,
Undoubtedly correct - but it doesn't make any of these developments any more palatable to say that Finchem did a far superior job of circling his wagons than his European counterparts.
Trying to be all things to all people/markets never works, whether in golf or anything else - now European Golf is suffering, in large part because O'Grady has ignored his base.

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Post by raycastleunited Thu 15 Aug 2013, 12:25 pm

The golfing heartland in Europe is obviously the UK and Ireland. This is where 44%* of European courses are located (including most of the classic championship courses and many of the newer top end venues capable of hosting tournaments), and with it a massive number of players and followers. In countries like Bulgaria, golf is a growing sport but only golfers are interested in watching professional golf. It was pitiful watching the Volvo Matchplay on TV with 3 men and a goat following each group. It's only UK / Ireland where non-golfers follow golf (even if it's just the Masters and the Open), and think of the crowds when the world matchplay used to be held at Wentworth.

So the obvious conclusion is play more in UK and Ireland. The south east of England is one of the wealthiest areas in the world and contains a number of superb golf courses within easy reach of major transport hubs and business / residential districts. Some of the game's biggest sponsors have headquarters in London. It's a sponsors dream, but there is only one event there a year, and the Open visits once a decade (incidentally RSG Opens generate much more revenue than other venues).

But the tax situation doesn't help things. Very high income tax on winnings / appearance fees in most northern European countries damages the after tax earnings available. US income tax is significantly lower, and of course taxes in the Middle East almost non-existant. The UK (HMRC) stance on earnings from sport is particularly harsh and that is why we rarely see superstars like Usian Bolt or Tiger Woods in this country.

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Post by Shotrock Thu 15 Aug 2013, 12:51 pm

Blame the US economic situation and cycles as the primary reason for the inept European tour and their inability to attract and retain top players? Puleeze!

Europe:

Top players - check
Top courses - check
Wealthy multinational companies - check
Passionate sports fans - check

So the best European players strive play full time on the US tour where the prize money is better, where the crowds are clearly larger and where a working professional doesn't have to manage 12 different time zones.

Yeah it's the US economy.

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Post by kwinigolfer Thu 15 Aug 2013, 1:04 pm

Sr,
Nice satire!

Of course the US economic shambles precipitated an even worse situation in Europe - no point in even debating that fact.

The rest is down to better (OK, far better)management of the product and the sleazy partners golf (not just in the US) has jumped in to bed with - remember people like Bobby Ginn and Allan Stanford helped paper over Finchem's cracks, and now he's snuggling up with the sleaze-bags at Barclays and Wells Fargo who would more appropriately be in Attica than shmoozing round sports events.

What goes around will hopefully come around - if this nonsense goes ahead, I can see a Western European Tour re-emerging from the ashes, and all the stronger for that.

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Post by Shotrock Thu 15 Aug 2013, 1:41 pm

Kwin - A Western European tour? That would be a massive departure from the global aspirations of the European tour.

I really wonder if the ET did (or does) any marketing research? Because they placed some very large bets on the wrong horses.

And now they are paying the price.

The ET will most likely go the way of Major League Soccer in the US. After a bunch of stops and starts they have carved out a nice niche. The best US players will certainly desire to compete in Europe, but MLS still gets plenty of support.

And Europe's financial troubles are lots more complicated than the US cycles alone ... Take Greece with a retirement age of 55 and 20 percent or so in the public sector? Unless they are sitting on oil reserves did anyone think that was sustainable?

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Post by kwinigolfer Thu 15 Aug 2013, 1:57 pm

See 7.12 - I mostly agree as far as ET management is concerned - doesn't make it acceptable though.

The ET has as many events in Greece as the PGA Tour has in most American industrialised cities - more to do with over-extension of the EU than the ET.

Incidentally, I see that one of the great inspirations for footie in the USA died a week or so ago in Atlanta. And he's a cousin of a Major Championship winner. Who??!!

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Post by Shotrock Thu 15 Aug 2013, 1:58 pm

Kwin - A Western European tour? That would be a massive departure from the global aspirations of the European tour.

I really wonder if the ET did (or does) any marketing research? Because they placed some very large bets on the wrong horses.

And now they are paying the price.

The ET will most likely go the way of Major League Soccer in the US. After a bunch of stops and starts they have carved out a nice niche. The best US players will certainly desire to compete in Europe, but MLS still gets plenty of support.

And Europe's financial troubles are lots more complicated than the US cycles alone ... Take Greece with a retirement age of 55 and 20 percent or so in the public sector? Unless they are sitting on oil reserves did anyone think that was sustainable?

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Post by McLaren Thu 15 Aug 2013, 2:04 pm

Is it possible O'Grady just isn't very good at his job?
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Post by kwinigolfer Thu 15 Aug 2013, 2:19 pm

Mac,
Isn't that what we've been suggesting since early 606 days?


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Post by McLaren Thu 15 Aug 2013, 2:38 pm

kwinigolfer wrote:Mac,
Isn't that what we've been suggesting since early 606 days?

True. I guess what I meant was that the differing fortunes of the PGAT and euro tour at the moment are not as complicated as wider economic conditions but just the skills of the respective commissioners.

The Dubai world series or whatever it is called now seems like a very bad move.
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Post by kwinigolfer Thu 15 Aug 2013, 2:44 pm

A lot of both I would think Mac.
Finchem also did a good job (or not depending on where you live I suppose) of abandoning traditional markets - Detroit, Milwaukee, Chicago, etc - and retrenching in his base in the sun belt.
O'Grady expanded away from (and in spite of) his base and thus had nowhere to retrench to.

Still puzzled by Casey's role in all this - wonder if he's now been silenced?

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Post by pedro Thu 15 Aug 2013, 3:35 pm

ray,
I think you are right re. the tax situation. Seems more favorable for both players and sponsors in the US. Must play a big impact.

kwini,
You analysis re. the Fincial Crisis is a bit tendentious. There's no such things as "American" companies. They're all global. Only the legislation is American. I remind that the some of the major sponsors you refer to (although not the "worst" culprits) are actually European (Barclays, Deutsche Bank, HSBC (didn't they sponsor something?) + of course Zurich, BMW).

With that being said we need to have more big tournaments in "Western Europe" for the ET to survive, as that's where the fan base is and where the best courses are. Unfortunately it's also where the tax situation for players and sponsors is at its worst.

If O'Gradys intention always was to prepare the ET for a sale ("merger"), and the PGA Tour finds that attractive for a "World Tour", then the ET's move to Asia and elsewhere was wise. Otherwise it has just been nails in the coffin.

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Post by kwinigolfer Thu 15 Aug 2013, 3:44 pm

pedro,
Yup, mentioned Barclays somewhere, and obviously DeutscheBank in the same boat.
Not sure other companies like Ginn are as global as you suggest, but my point was that Finchem was enjoying success on the back of operations that helped fuel the crisis in the first place.
As O'Grady has partly done too on a smaller scale, albeit his exploitation being relatively small beer in comparison.

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Post by Bob_the_Job Thu 15 Aug 2013, 4:31 pm

McLaren wrote:
kwinigolfer wrote:Mac,
Isn't that what we've been suggesting since early 606 days?

True.  I guess what I meant was that the differing fortunes of the PGAT and euro tour at the moment are not as complicated as wider economic conditions but just the skills of the respective commissioners.

The Dubai world series or whatever it is called now seems like a very bad move.
If O'Grady is pants and has ruined the European Tour, then why would the PGAT want to buy it? Of course the answer is partly "because they can, and cheaply", but I think it's actually a bit more complicated than that. At a pure business level, there would be some synergies and thus operational savings to be made by having a combined tour, and that's attractive at the moment. In addition, I think the European Tour has invested (and to some extent succeeded) in breaking into the Asian market which Finchem is on the record as saying is the fastest growing and most attractive.

Unfortunately what we have to realise is that the tours are businesses and golf is just the product and route to market. In business, the Chief Executive of every corporation is constantly considering ways to either beat or acquire the competition - that's what a free market is. Of course they will publically talk about wanting to improve the quality of the product and secure the long term future of golf, but that's not to say it's their first priority or that everyone is going to like the future.

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Post by George1507 Thu 15 Aug 2013, 6:35 pm

***In addition, I think the European Tour has invested (and to some extent succeeded) in breaking into the Asian market which Finchem is on the record as saying is the fastest growing and most attractive.***

Is there a market in Asia? Whenever I see golf on tv from China, Russia or India, it seems like there's hardly anyone there, and the few folk who are there seem to have no idea of what's going on. Maybe they've been dragged in off the street on the promise of a free sandwich for standing by that big sandpit for a couple of hours.

I suspect that the European Tour would have been better to have concentrated on running events in the UK, Ireland, Spain and a few other West European countries rather than competing with the PGA for dominance in a 'world' market.

I'm pretty sure that, by 2020, there won't be any golf tournaments in these 'emerging' markets. It's all very well trying to stimulate demand, but running pro tours isn't the way I'd choose to do it. Getting kids in school into golf would be a far better way.

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Post by raycastleunited Thu 15 Aug 2013, 7:15 pm

Agreed George, but the idea is that bringing the superstars to these countries will spark an interest in the kids.

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Post by raycastleunited Thu 15 Aug 2013, 7:18 pm

As Bob says, both tours are businesses. The PGA Tour seems to be run like a business whereas the European Tour feels like an old boys club run by the older tour pros.

Let's be honest these guys have done nothing but play golf since they were teenagers. Very few of them have any idea how to run a successful business.

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Post by pedro Thu 15 Aug 2013, 11:51 pm

O'Grady releasing a statement today waffling on the issue. Clearly something is cooking, call it 'merger', 'joint venture', 'closer cooperation' or whatever. And even if PGAT wanted to go more to Asia (maybe by co-sanctioning tourneys with the ET) most top-ish US players could still play a full schedule on home soil. Without the need of a passport or the risk of racecar-stomach.

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Post by McLaren Fri 16 Aug 2013, 2:06 am

Bob_the_Job wrote:If O'Grady is pants and has ruined the European Tour, then why would the PGAT want to buy it?  
It is something we have failed to address so far and I have to say it is not clear why the PGAT would want to buy the european tour. As merely doing it to crush it makes no sense given not owning seems to be achieving that anyway.

If we assume you only buy it if you feel your overall success can be improved, the questions is what makes finchem more money or whatever measure of success he aims for.

What is the winning basket for Timmy? In terms of the relative size, participation of top players, sponsors, media exposure of each tour.

Is it a combo of weak Euro and mighty PGAT or does he go down the route of ensuring there is an event "owned" by him with 50 OWGR points or more somewhere in the world every week. Whether that be on the european tour or the PGAT tour.
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