Sports Outside the Beltway

Shoprite II- SBS no longer a LPGA sponsor

In another supposed money grab, the LPGA has given a long-time sponsor the shaft. From Ron Sirak at Golf World-

That the LPGA came into the 2009 season with only three fewer tournaments than last year was probably a small victory given the state of the global economy. Not expected was that it would lose another event last month—the Ginn Open—before it was to be played in April, a victim of the real-estate collapse that also claimed the Ginn Championship on the Champions Tour. Now, the LPGA is taking a calculated risk for the 2010 schedule by signing a lucrative new deal for the Korean television rights to LPGA events with J Golf, a subsidiary of Joongang Daily News. The new partner means severing a 15-year relationship with the Seoul Broadcasting System, and losing the SBS Open after the season-opening tournament at the Turtle Bay Resort in Hawaii.

While the matter of Korean television rights for LPGA events might seem like a minor issue, it is not. The income from those rights is the tour’s largest single revenue stream.

I prefer to follow the play of the tours than the economics, but I’m well aware of how big a part the television contracts with Japan and South are so far as LPGA revenue sources go. The LPGA has to buy air time in the United States for most of their tournaments and then sell advertising to recoup their costs.

Here’s the stinking part of this whole deal.

The contract with J Golf, which has yet to be announced by the tour or the network, but details of which were obtained by Golf World, is a multiyear deal likely worth in excess of $4 million annually, according to sources familiar with the negotiations. That is up significantly from the $2.25 million SBS says it paid to broadcast 30 events in Korea this year. Asked if his company would continue to sponsor the SBS Open when coverage moves to J Golf next year, Sang Y. Chun, president and CEO of SBS International, said: “Absolutely not.”

Chun, who said he was “disappointed, upset really” at losing the contract, said his feelings were “not about the money [but] about the way we were treated.”

In Asian society, saving face is important. It looks like to me the LPGA has really stomped on these people, otherwise Chun wouldn’t have said the words he did.

So what has that meanace Carolyn Bivens done? Alienate and lose a long-time LPGA sponsor for a slightly better deal with a company with no track record of backing women’s golf. We all know what happened when the tour gave the Shoprite Atlantic City tour stop the finger and replaced it with tournaments sponsored by Ginn Resorts. A little over two years later there are two holes in the schedule after Ginn pulled out of these events and Shoprite is gone too. The deal with J Golf isn’t for another tournament, but the effect is two fold. First the SBS Open is gone in 2010 when the LPGA already has 1/3 of its tournaments up for renewal at the same time an economic downturn is happening. Perhaps more importantly, the latest actions of the LPGA could make current sponsors re-think their relationship with the LPGA. For they can be dispensed with by this crazy commissioner who chases dollars at the same time she kicks sponsors in the pants.

Hound dog writes-

As I mentioned last night on Inside The LPGA, the increase in rights fees (approximately $2 million per year, almost double the previous amount) from the new deal is significantly offset by the loss of the $1.2 million purse from the SBS Open. If this event isn’t replaced on the 2010 schedule, the deal isn’t nearly as impressive.

If what Sirak wrote above is true, the difference between the deals was only a million. To me the LPGA came out a loser, 4 million from J Golf compared to 3 million from SBS plus the 1.2 million tournament purse. That’s a net 200,000 loss to me. Can Carolyn Bivens add?

Ryan at Waggleroom has a differing opinion-

On the surface, it’s easy to recall the situation with Ginn that led to the demise of the ShopRite event in Atlantic City. The LPGA Tour took the allure of big money from an organization with not nearly as sure footed as ShopRite. And now it is paying dearly. Still, given that the LPGA Tour is losing significant revenue by losing several tournaments this year, this may have been a forced move.

I don’t see anything forced at all in the changeover from SBS to J golf. All I see is another step on the road to disaster for the LPGA Tour if they allow their present commissioner to keep making these decisions.

I’ll say it again. Fire Carolyn Bivens now!

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