[TEPaul]

....that's the best, most informational and educational of any article on the state of the USGA that I think I've ever seen.

This site will probably use it to mindlessly bash the USGA but I don't think they should do that automatically. There's a lot of reality written into that article, in my opinion, that should be looked at from all sides. The man who wrote it did a fine and balanced job on the subject.

I think it's in the latest Golf World and it's online in Golf Digest.com

[Powell Arms]

Here's the link, if I grabbed the correct article:

http://www.golfdigest.com/majors/usopen/index.ssf?/majors/usopen/gw20070608driver.html

[Peter Pallotta]

Tom,

thanks for the heads up. It really is a very good article. It's hard for me to believe that an organization like the USGA could find itself now in such apparent turmoil, in every area of its operations. Most of all, I'd have never thought it would be struggling so to articulate its own vision for the game, or be so unsure about its own ability to see that vision through.

I think what I'll remember most is the paragraph about the USGA's decision not be tougher on the trampoline effect, and the quote from the former USGA director on the reason why: "We thought we were betting the franchise on it."  That seems to me to be very important to understanding the USGA, i.e. that its fear of becoming irrelevant is so pervasive, and such a pressing concern.

Personally, I hope it weathers the storm, and that it gets stronger and healthier. I know some of the criticisms of the USGA that are voiced here and on other sites, and I probably voiced some of those myself; but I have a soft-spot for the USGA for this if for no other reason: that in 1922 it created the U.S. Amateur Public Links Championship. I'll let others be cynical about it if they want; for me, I think the symbolic value of that decision was/is great, and I think it was a wonderful thing for the game of golf in every sense. (I think the RCGA, by the way, has never seen fit to do the same; someone please correct me if I'm wrong, but to this day Canada does not have a national publinx championship.)

Peter    

[Joel_Stewart]

I think what I'll remember most is the paragraph about the USGA's decision not be tougher on the trampoline effect, and the quote from the former USGA director: "We thought we were betting the franchise on it."  That seems to me to be very important to understanding the USGA, i.e. that its fear of becoming irrelevant is so pervasive, and such a pressing concern.

What is interesting is the fact that the USGA doesn't really have the publics support on eliminating some of these non conforming clubs.  It appears some of he companies are starting to consider selling these clubs anyway.

There was some startling revelations in the article as well that leads me to think of some serious infighting within the USGA.

1)  The amount of spending vs. their income.  I believe they said they spent $9 million more than they took in last year.

2) The cutting of employee benefits.

3) The possible hiring of a media czar, especially created to look at the TV contracts.  (Are they still praying for a big contract to bail them out.)

4)  The former presidents and their lack of comments seems to not support the current direction??

All in all a very interesting article.

[BCrosby]

Kudos to Chris Millard, the author. He also did Nicklaus's book a couple of years ago on gca.

A friend and a very talented writer.

Bob

[TEPaul]

Peter:

That comment from an ex pres that they thought they were betting the franchise on the COR thing got my attention too. It shows how ligitious the manufacturers have become in recent times. But of course everybody seems to blame the USGA for that too rationalizing that the manufacturers are just "business as usual" and it's OK to threaten to sue the National Golf Association. It's not OK with me. My Dad worked for Spalding once and they never would've thought to do something like that back then. Those guys all knew each other. There was respect back then. If the game is getting ruined the attitudes of the manufacturers is what's doing it in my book.

[BCrosby]

Tom/Peter -

I do not understand this litigation threat thing. No doubt manufacturers are rattling sabres. Maybe they mean it.

But there are ways to blunt all that. If you want to roll back equipment, you phase it in over time. Three years, five years? Pick a period, but phase in the changes so as to minimize disruptions. It does not have to be done at once.  

All this worry about the USGA obligating itself to reimburse golfers and manufacturers for the equipment the USGA deems non-conforming is a problem with a range of workable solutions. One is to give players and the manufacturers time to react to the changed rules.

These kinds of solutions seem to me so workable (and so obvious), that I can only assume that there must be something going on that they aren't telling us about.

Bob

[Tom Ferrell]

Joel -

Regarding the creation of a "media czar," I didn't understand that to be fishing for a new blockbuster TV contract, although obviously the telecasting of championships is the most up-front revenue opportunity the USGA has.  Rather, it has to do with the digitization and distribution of the vast video archives of the USGA.  Right now, all that video sits in climate-controlled rooms, doing nothing unless some network pays big dollars to get the rights to air it.  The media czar would examine all opportunities (direct download; on demand via cable/satellite; streaming networks; etc.).  Driver is correct in saying that "we don't know what distribution will look like in five years, only that it will be very different."

Beyond that, I think the article exposes some serious problems within the organization.  These are problems that have been festering for a long time and have a long way to go before they fully play out.  Have they reached the point of irrelevance as the "overseer" of the game?  Not yet, but you can almost see it from here.  I hope they can right the ship, but that will mean retaining the goodwill of USGA members, staffers, past presidents and executive committee members and rank-and-file golfers in addition to "hard-nosed" business choices.  It's a fine line.  

[Peter Pallotta]

Bob, Tom
Yes, the current 'atmosphere' you both reference really colours the entire article, which article (either by accident or design) leaves at least one thing unsaid. It's a question that kept popping up for me, i.e. is the USGA's apparent siege mentality justified, and its fears of potentially devastating litigation reasonable/well-founded?

I don't know the answer to that, but the feeling I got from the article was that, however reasonable those fears are, they're being compounded by other factors and forces, both externally and internally. The line that went something like "the USGA became aware of its own mortality" seemed to me so telling, but still so 'over the top'.

I mean, can the USGA possibly be afraid of actually ceasing to exist? edit: Does it have cause to be?

Peter

[Mike Sweeney]

"Others close to the USGA pinpoint U.S. Open site selection as the culprit. Venues with ample acreage for parking and hospitality generate more revenue than land-starved venues such as Winged Foot, which hosted the 2006 Open."


I would like to see the numbers behind this. I simply don't believe that Winged Foot was not in their Top 3 of most profitable US Opens.

[JESII]

Mike,

With no supporting evidence, I would suggest that an Open at Winged foot would generate a much stiffer expense column than one at Southern Hills or Oakmont...income probably doesn't vary dramatically, does it? Who sets the price for a beer?

[TEPaul]

Peter/Bob:

The remark about their mortality does seem telling but that may've been a remark first uttered up to fifteen years ago.

Back then I think they really were worried about manufacturers lawsuits. Don't forget what Ely Callaway did and said and what took place between the RCGA and Callaway over the ERC2 driver.

I think part of the reason the USGA raised such a warchest back then was due to the prospect of manufacturers lawsuits over potential equipment disagreements. That remark may've been first uttered before they raised that warchest and if that is the case I can understand that remark---eg they felt if they lost a really big equipment lawsuit it could break them financially.

Personally, I feel if the USGA plays their cards correctly with proposed I&B rules and reg changes they would never lose a manufacturer's suit over restraint of trade.

I think Bob is right that if they phased some I&B rule and reg changes in over enough time there's no way a manufacturer who will be the plaintiff could establish restraint of trade damage.

Plus, in my opinion, the USGA has the best defense of all for a restraint of trade suit and that is that they could claim that their I&B Rules and Regs are strictly voluntary and nobody is being made to follow them.

On the other hand, one can see the danger in that defense or even that stated position---eg what if the manufacturer's and the golfing public decided not to voluntarily follow their I&B rules and regs on conformity?

If that happened they'd be right about their own mortality, at least in one very important area of what they've controlled for almost a century.

There is little question in my mind that a number of manufacturers are considering producing and marketing non-conforming I&B just to test the waters to see if golfers will buy it. If they do that en masse, the USGA will have a real problem maintaining their position as the regulators of I&B in America and their purview. And of course the R&A will fare no better in their purview which is essentially the rest of the world.

[Jim_Kennedy]

There is little question in my mind that a number of manufacturers are considering producing and marketing non-conforming I&B just to test the waters to see if golfers will buy it.- TEPaul

I'm sure there were a few green grass shops where you could have purchased one of Callaway's non-conforming clubs, but I knew of none. For the manufacturers to commit to making such junk they would have to have solid backing from those running these shops and I don't think they'll get it.

[TEPaul]

"For the manufacturers to commit to making such junk they would have to have solid backing from those running these shops and I don't think they'll get it."

Jim:

Unfortunately, I don't agree with you. I wish it would always be that way but I don't think so. The Callaway thing was back then and it was a move that was very publicly a challenge to the USGA. Next time I don't think there'll be any real challenge, they'll just start doing it and if the public buys it a lot of things will change in golf. If the public wants it it sure as hell won't take long for golf equipment outlets to sell it to them.

[Phil Benedict]

In order to salvage its stature in the game of golf, the first thing the USGA needs to address is Shivas' Cheater Line.

[RSLivingston_III]

"For the manufacturers to commit to making such junk they would have to have solid backing from those running these shops and I don't think they'll get it."

Jim:

Unfortunately, I don't agree with you. I wish it would always be that way but I don't think so. The Callaway thing was back then and it was a move that was very publicly a challenge to the USGA. Next time I don't think there'll be any real challenge, they'll just start doing it and if the public buys it a lot of things will change in golf. If the public wants it it sure as hell won't take long for golf equipment outlets to sell it to them.

I tend to concur with the public wanting what they want. The game is so ego driven by the manufacturers advertising I see little hope of bringing the game back to sanity. I think the genie is out of the bottle....

[Garland Bayley]

Interestingly this article gave me an answer to a question I had sent to the USGA I&B people, but although recieving an automated reply saying I would receive their answer later, I never received it. Did they mean I was to read this article to receive this answer?

The "rocks" of 1998 were already extremely close to the ODS limit. The softer balata balls were well short of the limit.

[Willie_Dow]

Tom Paul - Once again I agree with your analysis.  When I look back at the Open at Merion in 1981, and the work put forth by Mike Butz to accomodate all the meetings and planning at very little expense.  Everyone paid their own way to travel to Inverness and Baltusrol for dress rehearsals on marshal procedures.  Our operating budget was kept low and we all felt good about our contribution to the game.

What goes through the present volunteers mind ?  And is it being followed by the present powers that be at the USGA ?

[Jim_Kennedy]

Ralph,
As I said, I don't know anyone who sold Callaway's non-conforming equipment. People do want what they want, but the majority also want to follow the rules and play what they see the Pros using, or they rely on their club Pro to help them make equipment decisions. No amount of marketing pizazz can create a sufficient ground swell for a piece of equipment if it isn't being used by the former and in the shops of the latter.

I think it's simply this, take away or neuter the USGA/R&A and there is nothing that makes golf relevant to this modern age.                              

[Mike Sweeney]

Mike,

With no supporting evidence, I would suggest that an Open at Winged foot would generate a much stiffer expense column than one at Southern Hills or Oakmont...income probably doesn't vary dramatically, does it? Who sets the price for a beer?

Sully,

You are a little wrong and a little right:

The Winged Foot 2006 year "championships" pulled in $94 million, $25 million more in revenues than the $69 million generated during Pinehurst. Total 2006 expenses were $69 million versus $37 million in 2005 Pinehurst. Obviously with out more information, it is difficult to know why.

http://www.usga.org/aboutus/annual_report/images/fs_06.pdf

This is from an old Masters financial piece in Golf Digest:

_______________________

The U.S. Open has sold 30,000 tickets this June at Shinnecock Hills, far fewer than the record 42,500 the USGA sold in 2002 at more fan-friendly Bethpage Black. A seven-day pass for the U.S. Open costs $350, pulling in $10.5 million.

The USGA will also sell about 70 corporate hospitality tents at an average of about $150,000 for another $10.5 million, according to USGA spokesman Marty Parkes. Merchandise sales will be in the $7 million range, with concessions earning another $3.5 million. NBC pays about $20 million a year to the USGA for up to five of its national championships. In all, the U.S. Open generates about $51.5 million. The USGA annual report does not break down the revenue and expense of each of its 16 national championships, but the U.S. Open costs the most to run and generates the most revenue. In 2002, USGA championships generated $92.6 million in revenue and incurred $53.2 million in expenses, according to the report.

____________

Sully my question is why were the expenses $16 million higher at Winged Foot in 2006 compared to 2002 at Bethpage? Winged Foot year did larger revenues than Bethpage ($94 versus $92 million). Bethpage has always been held out as the banner year, and Winged Foot surpassed it in revenues.

The statement in the article said:

"Others close to the USGA pinpoint U.S. Open site selection as the culprit. Venues with ample acreage for parking and hospitality generate more revenue than land-starved venues such as Winged Foot, which hosted the 2006 Open."

So that "WF is the problem" is complete BS from the numbers presented by the USGA. Winged Foot 2006 year appears to be number 1 in revenues, and while the US Open is not everything, it is clearly the Mother Ship.

My hypothesis is that expenses have gotten out of control which is due to weak management. It goes hand and hand with the mismanagement of the technology issues.  

Tom Paul does not want things to get out of control on this thread, but the numbers don't lie, the USGA has a management problem. It's not Winged Foot, its not the manufacturers, it is the USGA.

[Tony Ristola]

QUOTE:
"The effect would have made 74 percent of all balls previously approved nonconforming. None of the hard-ball manufacturers knew how to make a soft ball, and the soft-ball manufacturers had patents on it. So based on this prediction of a new ball, but not proven fact, are you going to outlaw 70-odd percent of all the balls being played--which tend to be the balls played by the average golfer because they're less expensive and more durable--and are you then going to favor the manufacturer who has patents on the soft, shorter ball by doing that, which would have likely created chaos in the golf world and a lot of antitrust and legal issues in order to protect against something that might happen?"
END

Hey USGA... too bad if someone has patents on the soft ball, and others don't. It's not your business to look out for market share, or who has what. Your job is to protect the game. You really think that the number of compounds to make A BALL FLY SHORTER WITH SPIN is limited? How about putting the balls back to the Titleist 384 balata era and letting balata and urethane balls compete for a while...watch the price wars evolve, watch what comes to the market and watch the Chinese come in and get ball prices down to a low that has never before been seen.

What a load of nonsense.

[Jim_Kennedy]

Mike,
Just an observation, a 2002 dollar was $.11 better than a 2006 dollar.

Even though expenses rise, haven't their revenues increased every year?

[Mike Sweeney]

Mike,
Just an observation, a 2002 dollar was $.11 better than a 2006 dollar.

Even though expenses rise, haven't their revenues increased every year?

Jim,

Here are the numbers that I can find, I will let you determine what they mean:



                    Beth 2002    SHIN 04      Pine 2005     WF 2006
Champ Revs      $93m           $88m       $69m              $94m

Champ Exp          53 m           56m       37 m                69m

Exp as % of Rev   56%           63%       53%            73%!!!!!

Champ Profit        $40 m          32m      32 m                 25M

Again the statement was,

"Others close to the USGA pinpoint U.S. Open site selection as the culprit. Venues with ample acreage for parking and hospitality generate more revenue than land-starved venues such as Winged Foot, which hosted the 2006 Open."

Winged Foot was NOT a revenue problem. The US Open revenues are pretty much set a year in advance between ticket, TV and Corp pavilion sales. The only variable is on-site sales, and they have years and years of consumer data on that. That Winged Foot logo is pretty good too!

[Jim_Kennedy]

Mike,
There isn't much difference in the gross between '06 and '02, but WF's gross in '06 would have had to be about 104.2 m to 'equal' Bethpages 93m in '02.

Personally, I wouldn't look at profiting 25m against a 69m expense as a revenue problem, but, WF didn't make it to the 104.2m number so I guess it could be said that it didn't 'keep up' with inflation.  

[Mike Sweeney]

Mike,

Personally, I wouldn't look at profiting 25m against a 69m expense as a revenue problem, but, WF didn't make it to the 104.2m number so I guess it could be said that it didn't 'keep up' with inflation.  

Jim,

That is an incorrect view. First off, look at the difference in expenses between Shinnecock and WF. WF is way out of whack, and expenses as a percentage of revenues have increased each Open in the NY market. The USGA can only sell x number of tickets to Winged Foot probably comparable to Shinnecock. Bethpage has much more room, and they sold more tickets as a result. The USGA knows or should know going into it that they can't reach 104 million, unless that have some sort of consumer bust out with on site shirt sales at The WF Open. There are very few variable cost at a US Open and with Winged Foot, it was the third go around in 6 years with metro NY cost structure. They simply let their cost get out of control. It does not make anyone a bad person, it was simple mismanagement, and if Walter Driver walks into a Partners Meeting at his old law firm (which has much more variable revenues) he gets fired or maybe gets one more chance.

Rather than the USGA get defensive about the numbers, they should view it positively. They have grown the business to a point where they need professional management rather than a volunteer structure with professional support. It is a good problem to have!

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