[TEPaul]

Mike:

Good post and you're probably very right about an operation like the USGA is today needing professional management expertise and perhaps even corporate sponsors which they've just taken on.

That kind of thing probably shocks some of the old traditionalists like me who remember the old days but that was then and this is now and one thing is sure as hell, and that is the world and the world of golf has changed a whole lot since BACK THEN in the good old days. I don't think that massive change was fostered by the USGA---they're just trying to figure out how to react to it and adjust to it.

On the other hand, the USGA may be in a real "transition structure" right now and eventually they need to figure out how to effectively utilize their volunteer board of directors.

If they think they can be used long-term in some kind of really hands-on micro-managing way they're probably in for some long-term problems both externally with mismanagement and internally with employee morale.

It can't be easy to make as one's primary goal the idea of making all kinds of money like a for profit corporation in a basic not-for-profit structure. That, I would think, would have to be the proverbial dynamic two-way stretch.  

[Craig Sweet]

Just an observation, but sometimes this "sponsor" thing works the other way...the sponsor "needs" and organization...otherwise they won't give....

[Mike_Young]

I can understand an association wanting/needing  sponsors etc but if they are considered a sanctioning body it should not happen.....And at this point I assume most would still consider the USGA the sanctioning body in the US.....it is no different than the AFL-CIO taking on ford as a sponsor......I would assume in the past any promotion of the USGA via different professional golfers such as Arnold Palmer etc was gratis.....
there will come a time when there will be a compromising situation due to TW being with Amex and them being a USGA sponsor.....whether it be special expemptions or whatever.....Next thing we know the American Bar Assoc will have Judge Wopner promoting them.....

[BCrosby]

I can see it now. In the near future we will have a US Open with Tiger and Phil putting out on the 18th.

Tiger will have "Buick" on his bag, hat and shirt. Phil will have "Ford" on his bag, hat and shirt.

The bunting surrounding the green will be emblazoned with "Chrysler." Then we will go to an NBC commercial for BMW.

I gotta think that at some point you get so much dilution that everyone stops paying.

Bob

[Jim_Kennedy]

Mike,
That is a correct view   ,expenses have risen, but 8m of that rise could be chalked up to inflation. If you accept inflation, that puts '06 expenses at 65% when relating to '02's 56%, but in line with Shinnecock's '04 at 63%. No?  

[rgkeller]

Mike,
That is a correct view   ,expenses have risen, but 8m of that rise could be chalked up to inflation. If you accept inflation, that puts '06 expenses at 65% when relating to '02's 56%, but in line with Shinnecock's '04 at 63%. No?  

A business whose expenses go up with inflation while the revenues do not needs better management.

Or an entirely different paradigm.

How could anyone spend $60M to put on a four day golf tournament?

[Rich Goodale]

I too would be very interested in a breakdown of those $60 million in expenses.  One of the corrolaries of Parkinson's Law is that in monopoly situations, income tends to rise in direct proprotion to expenses, or is that vice versa........

[Jim_Kennedy]

rgkeller,
I'm not saying they don't need help, only that the figures given are not quite as bad as they look on the surface. I'd ask, if the USGA could have packed WF with the same number of 'patrons' they were able to squeeze onto Shinnecock, how bad would they look now?

Rich,
I think it's expenses rise in greater proportion to income.

[Rich Goodale]

Not exactly, Jim, but you are close....

[Jim_Kennedy]

Rich,
Bureaucracies get heavier and will spend what they have?

[Mike Sweeney]

Mike,
That is a correct view   ,expenses have risen, but 8m of that rise could be chalked up to inflation. If you accept inflation, that puts '06 expenses at 65% when relating to '02's 56%, but in line with Shinnecock's '04 at 63%. No?  

Jim,

You forgot how inflation also hits revenues, certainly I paid more for WF than Bethpage, but I don't know exactly how much, and currently neither of us know how many tickets were sold at WF versus Shinnecock. Certainly the TV contracts account for inflation on the revenue side. However the USGA did know how many tickets and booths were sold at least 6 months in advance, and I will argue that the expenses should have stayed flattish (even with inflation) because after 3 opens in the NY area, they should have gotten more efficient.

Real life example. Last year I went to WF two days. Both days I parked at Orchard Beach and took the USGA bus to the tournament. One day with Dylan and one day with Dr. Childs. It ran like clockwork there must have been 8 buses sitting there. As a consumer of the US Open I was completely satisfied. I made the mistake of trying the back door with Mike Whitaker by parking in a private lot at Shinnecock and it was a mess. Never again, take the USGA bus.

Now the GCA poster formerly known as Pete Buczkowski does all the logistics for the buses at Fortune 500 Dow Jones listed Disney Corp aka Disneyworld. The Sweeney's are big consumers there too, and last I heard they have a pretty good track record with consumers. If my buddy Pete ever had 8 buses waiting in line at Disney, for sure we would see alot more of him around here because he would get booted out of Disney to the cart barn logistics at Orange County National GC.   I talked to one driver of a bus, and he was from Pittsburgh, and had to be put up in a hotel for a week. With 3 Opens over 6 years in the met area, they can get a local contractor?

My guess is the USGA signs a 5 year contract with a bus company. I would suggest that professional management such as my man Pete would put it out for a yearly bid and would negotiate it down to the last penny. It is really hard work, and that is why professional managers get paid.

Now everyone can say that this is not the agenda of the USGA, but the reality is they need to address the equipment issue. As of November 2006, they have about $225 million in a war chest. My guess is they need $500 million in the bank in order to sit at the table with the equipment companies so that they have "walk away power" ie "go ahead and sue us we have a half a billion to work it out in court". Without that, Nike and the others know it is a bluff. Only professional management can get the USGA to $500 million. It is a poker match and right now the USGA does not have the cards.

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