Monday, June 1, 2009
Thursday, February 26, 2009
Feb. 25 (Bloomberg) -- At the Whippoorwill Club in Armonk, New York, the recession means fruit and cheese platters won’t be put out in the private golf course’s bar on weekends anymore, saving $12,000 a year.
Even Tiger Woods’s return to professional golf isn’t expected to reinstate the grapes and brie or rouse enthusiasm for the game at Whippoorwill, which over the past year has lost as many as 30 members, or about 10 percent of its total.
“It doesn’t make my life any different at all,” said Frank Marino, president of the club located about 40 miles north of Manhattan.
While Woods’s return to the game in Arizona today will give television ratings a boost, it won’t turn the tide for course owners who’ve had to tighten budgets or equipment manufacturers that fired workers, said Casey Alexander, who covers the golf industry for New York-based Guilford Securities Inc.
“It certainly does brighten some people’s spirits,” Alexander said in an interview. “But I don’t think he changes people’s spending habits, even in good times.”
Woods, out for eight months after knee surgery, won his comeback game at the World Golf Championships Match Play near Tucson, Arizona, as the U.S. recession approaches its 15th month. The economy has shed at least 3.6 million jobs, and golf has lost players and financial backers.
“None of us are immune,” said Chris Borders, general manager of the Atlanta Athletic Club, which is saving money by changing the way it cuts the grass.
Manufacturers are also paring costs. Adidas AG’s TaylorMade and Nike Inc., which sponsors Woods, skipped the PGA Merchandise Show in Florida last month, saving at least $392,000.
Beaverton, Oregon-based Nike, the world’s largest athletic shoemaker, said on Feb. 10 it may cut as many as 1,400 jobs from its payroll of almost 35,000. TaylorMade fired 70 in December.
In January, Minneapolis-based U.S. Bancorp’s U.S. Bank said it would end its sponsorship of the U.S. PGA Tour’s annual Milwaukee event, where Woods made his 1996 professional debut.
Ginn Resorts of Celebration, Florida, severed ties with the women’s LPGA Tour and 50-and-over Champions Tour. Atlanta lost its PGA Tour event when AT&T Inc. didn’t renew its contract, and FBR Capital Markets Corp., the Arlington, Virginia-based real- estate investment trust won’t back the FBR Open in Phoenix beyond 2010, the golf group said yesterday.
“We take this very seriously,” PGA Tour Commissioner Tim Finchem said at a press conference yesterday. “There’s too much pressure on too many companies. It would be unrealistic to think that we’re not going to have turnover.”
Investors in sporting-goods stocks are also feeling the recession’s wrath. Shares of Callaway Golf Co., which introduced the Big Bertha steel-headed driver in 1991, are at their lowest in 16 years and underperformed the Standard and Poor’s Midcap Consumer Discretionary Index by 18 percentage points over the past 12 months. The Dow Jones Industrial Average ended at 12,269 on June 16, the last time Woods played in a tournament, and finished at 7,351 yesterday.
“The only thing I can control is what I do on the golf course,” Woods said on a conference call Feb. 20. “As far as off the golf course, those are things that I feel are out of my hands.”
Carlsbad, California-based Callaway, which sponsors players including Phil Mickelson, said on Feb. 6 that it will no longer match employees’ 401(k) contributions.
Across the U.S., as many as 15 percent of private clubs are reporting financial strains, according to the Jupiter, Florida- based National Golf Foundation, which tracks the industry. Memberships are down 29 percent at these clubs and total rounds played have declined 22 percent since 2000, the organization said.
“It’s a very crazy time and it’s all a bit frightening,” said Elaina Brooks, president of the Phoenix Corporation of Georgia, the lead broker for home sales at the Manor Golf & Country Club in Alpharetta, Georgia.
In January, Brooks had agreements with five potential buyers, three of whom have since backed out, she said. The Manor, a gated community with the state’s only Tom Watson- designed course as its centerpiece, has 150 residents and plans for 700 homes priced from $900,000 to $2.9 million. A 33,000- square-foot stone and brick clubhouse is being built.
At Congressional Country Club in Bethesda, Maryland, the home of Woods’s annual AT&T National tournament, three companies canceled holiday parties in December, costing the club about $108,000, according to Chief Operating Officer Michael Leemhuis.
“Thank goodness we had the cancellation clauses,” said Leemhuis, whose club charges a $150,000 initiation fee for a full membership.
‘Every Little Thing’
Maintenance crews at Atlanta Athletic, where golfing legend Bobby Jones grew up playing the game, will soon start cutting the fairways in a back-and-forth pattern, instead of the more decorative crisscross. The adjustment will save about 100 gallons of diesel fuel a month, or about $2,300 a year, said Ken Mangum, the grounds superintendent.
“You’re looking at every little thing you can to save a dollar,” Mangum said. Fewer flowers will be planted, something “spoiled” golfers will have to get used to, he said.
For television networks, Woods’s return will be a lift. His participation in a tournament usually brings a 30 percent to 40 percent ratings increase, said Neal Pilson, a former head of CBS Sports who is now a New York-based broadcasting consultant.
With Woods competing, the Match Play may sell as many as 20,000 tickets a day, up from 17,000 last year, according to Wade Dunagan, executive director of the event.
At the Whippoorwill in Armonk, where the initiation fee is $58,000, Marino said he may be able to make up for membership losses.
“We think we could get some overflow from other clubs that will go under,” he said.
By Mark Lamport-Stokes
MARANA, Arizona, Feb 23 (Reuters) - Little-known Australian Brendan Jones will face the biggest exposure of his career when he meets world number one Tiger Woods in Wednesday's first round at the WGC-Accenture Match Play Championship.
Jones booked his place in the opening World Golf Championships (WGC) event of the year as one of the top 64 players in the world and was overjoyed when he heard he would take on Woods.
The game's leading player has been sidelined by knee injury for the last eight months and his return to the PGA Tour this week was only confirmed four days ago.
"Somebody said Tiger's announced he's coming back and I got a few chills up the back of my neck," Jones, 33, told reporters at Dove Mountain's Ritz-Carlton Golf Club on Monday.
"But I'm here now and two days away from it, so I'm very, very excited. If I get beat by anybody, I would like to get beat by Tiger. It's a chance of a lifetime, really."
Asked to describe his emotions as he prepared to take on the 14-times major champion in a head-to-head duel, Jones replied: "I'm nervous and I'm really, really happy.
"I'm very, very excited to have that opportunity for one of the most anticipated comebacks in any sport, really. And to have a front row seat to all of it is a great honour."An eight-times winner on the Japan Golf Tour, Jones has previously competed in only three WGC events and accepts he will tee off on Wednesday as a huge underdog.
"I would probably put the house on Tiger but I didn't fly all this way to try to lose," the New South Wales professional said.
"I'm here to try to beat him, and there's been some funny things happen in sport.
"I'm up against it but I'm hoping that I'll put in a good effort," added Jones, who broke into the world's top 60 by winning the Nippon Series JT Cup in Japan in December.
Woods has clinched the Accenture Match Play Championship three times -- in 2003, 2004 and by a record winning margin in last year's final -- but three of his six losses at the event have come against Australians.
He was beaten by Peter O'Malley at the first hurdle in 2002 and has twice gone down to Nick O'Hern, in the second round in 2005 and after 20 holes in the third round in 2007.
"I'm an Australian so I got some sort of chance," Jones said with a broad grin. "Obviously I know that I'm a long shot. I have got nothing to lose.
"I can just go out, be a lot more aggressive than what I normally would be. I have some sort of chance.
"It will be a dream come true to actually play Tiger and win but I'm not going to get too carried away just yet." (Editing by John O'Brien)
Feb. 25 (Bloomberg) -- Northern Trust Corp., a recipient of $1.6 billion in federal bailout funds, defended its sponsorship of a professional golf tournament after it was criticized by members of Congress.
“We came to the conclusion that no public purpose would be served by canceling the Northern Trust Open and related events,” Chief Executive Officer Frederick H. Waddell said in a letter posted on the Chicago-based company’s Web site.
U.S. Representative Barney Frank and 17 other Democratic lawmakers yesterday demanded that Northern Trust pay the government the equivalent of what it spent entertaining employees and clients during the tournament, held outside Los Angeles Feb. 19 through Feb. 22. Northern Trust hosted parties and concerts that included performances by Sheryl Crow and the band Chicago, according to the Web site TMZ.com.
Waddell’s letter ignored the demand from Frank, chairman of the House Financial Services Committee, and didn’t say whether the company would return any government funds. Waddell said no money from the Troubled Asset Relief Program had been used for operating expenses, including marketing, advertising or corporate sponsorship.
The company plans to respond with a letter to Frank and members of his committee, Northern Trust spokesman John O’Connell said in an e-mail.
Wells Fargo & Co., a recipient of $25 billion in government aid, said it’s cutting spending on the Wachovia Championship golf tournament April 27 through May 3 in Charlotte, North Carolina. Wells Fargo, which acquired Wachovia Corp. in December, is evaluating all sponsorship agreements to determine how they benefit the company and communities, Mary Beth Navarro, a spokeswoman for the San Francisco-based company, said yesterday in an e-mailed statement.
Making More Loans
Under TARP, Northern Trust sold the U.S. Treasury $1.6 billion in preferred stock and warrants. The company pays the Treasury $19.7 million in dividends each quarter.
Government funds supported “high-quality loan growth,” helping to increase Northern’s loans and leases by 21 percent in 2008 to more than $30 billion, Waddell said in the letter.
“At a time when the nation is attempting to rise above its current economic difficulties, it is important for healthy banks like Northern Trust to continue to invest in our clients and the communities we serve,” Waddell said.
The letter also didn’t respond to criticism yesterday by Senator John Kerry, like Frank a Democrat from Massachusetts. Kerry called Northern Trust’s spending “another idiotic abuse of taxpayer money while our country is on the brink.”
Kerry proposed legislation that would impose a $100,000 fine on any TARP recipients misusing the funds and require them to reimburse the government. The TARP program, under which the U.S. Treasury has injected $295 billion into banks, was begun under former Secretary Henry Paulson.
“This is sheer idiocy by people making rules who have never worked anywhere but in the government,” Chris Kelly, an attorney in charge of capital markets business for Washington-based law firm Jones Day, said in an interview. “Are we going to have a bureaucracy determining whether a private business can hold a conference?”
Northern Trust isn’t a client of Jones Day, Kelly said. The firm does work with other banks that have received TARP money.
Frank said today in an interview he was “disappointed” with Northern Trust’s reaction to his letter. “They can’t argue anymore that they didn’t want the money but Paulson made them take it. While that’s accurate, they can return it now.”
President Obama’s economic stimulus package included provisions that allow banks to return TARP funds.
Northern Trust agreed in 2007 to sponsor the annual tournament, held at Riviera Country Club in Pacific Palisades, California, for five years beginning in 2008. The event, one of the oldest stops on the PGA Tour, drew 29 of the top 50 ranked golfers in the world. Phil Mickelson won the tournament last weekend, taking $1.13 million of the $6.3 million purse.
Waddell said the tournament has raised $3 million for the Los Angeles Junior Chamber of Commerce Charity Foundation in the two years it has sponsored the event.
Unlike TARP recipients such as Citigroup Inc. and Bank of America Corp., Northern Trust has remained profitable amid the financial crisis. The company, which has handled accounts for President Barack Obama and his wife, reported operating profit of $323.3 million in the fourth quarter, a 48 percent increase compared with a year earlier.
“Northern Trust has always taken a more conservative approach to managing their balance sheet,” Mark Fitzgibbon, an analyst at Sandler, O’Neill & Partners LP in New York, said in an interview last month.
American International Group Inc. and Bank of America have been criticized by politicians and government watchdog groups for their spending after receiving TARP money. New York-based AIG spent $440,000 soon after its bailout sending top producing sales staff to a California spa.
Bank of America, based in Charlotte, North Carolina, sponsored an entertainment event connected to the National Football League’s Super Bowl in Tampa, Florida, earlier this month.
Northern Trust’s primary business is keeping records, tracking performance and lending securities to institutional investors including mutual funds, pensions and hedge funds. It has $3 trillion in assets under custody.
The company also runs mutual funds and accounts for institutions and wealthy individuals, with $575.5 billion of assets under management.
Customers of its wealth management division include 20 percent of Forbes’s list of the 400 richest Americans, according to the company’s Web site.
Bush’s Blind Trust
The company managed George W. Bush’s investments in a blind trust during his presidency. Obama and his wife, Michelle, had their checking account and home mortgage with Northern Trust as of mid-January.
Northern Trust fell $2.65, or 4.4 percent, to $58.14 at 4:00 p.m. in Nasdaq Stock Market composite trading. The stock has declined 20 percent in the past year, compared with the 44 percent drop by the Standard & Poor’s 500 Index.
MARANA, Arizona (CNN) -- I've been privileged in the past to witness Tiger Woods out on a golf course. And I can tell you, it's a painful, frustrating process.
Golf fans flocked to Arizona to see Tiger make his long-awaited return to the tee.
Not because the golf he produces isn't spectacular and at times utterly dazzling but it's the sheer volume of people he attracts that help convince me each and every time golf has to be one of the worst "out on the course" spectator sports going. That's just my opinion though.
Try telling that to the legions who got themselves to Arizona this week once they heard the world's top player was making his return to the game after more than eight months.
Woods' first competitive slice of action in the best part of a year wasn't due to get under way until around lunchtime here though judging by the fans already out on the course you'd have thought his tee-time was more like 7am. Even those jostling for position to catch a glimpse of him on the range or putting green were taking no chances and ensuring they arrived in plenty of time.
Remember all of this was before he even teed off!
The scene on that first hole was as expected bustling to say the least. The small gantries were packed anyway due to the whole array of talent on show through this week, but it got even more frenzied when the Woods-Jones match- up was announced.
Mayhem to say the least! Those seated in the stands were the lucky ones, it was the unfortunate spectators trying to stand and strain every sinew to catch a glance of that first shot from the world number one I felt for.
Even us media suffered! With seconds to go before the American struck his drive, one television camera crew, which really should have known better, blatantly blocked us from getting that prized shot. Only quick last-gasp thinking from our cameraman John saved the day.
In case you were wondering that Woods drive was just majestic and he would go on to win the first two holes in fine style.When he strode off down the first fairway, there was a stampede with those looking to brave the soaring temperatures here in Arizona and follow him every step of the way. The Woods 'wow factor' is still very much alive and kicking. The question is will the so-called bionic knee hold up in the weeks and months to come?