When the skies dumped more than 5 inches of rain on the Riviera Country Club in Pacific Palisades, it wasn’t just the world’s top golfers who got soaked.
Nissan Motors USA and Countrywide Financial Corp., which underwrote much of the Nissan Open tournament’s $8 million cost, lost television exposure when the tournament was shortened to 36 holes and canceled entirely on Saturday, Feb. 19, which would have been one of the highest days for viewership.
Also losing out were scores of companies that bought hospitality suites and tents for their clients. Other casualties were the Los Angeles Junior Chamber of Commerce, which coordinates the tournament, and ABC Sports, which along with the ESPN and USA cable channels, aired what should have been a 72-hole event.
When it was finally over on Monday, a day later than scheduled, Adam Scott earned $826,000 after winning the tournament in a sudden-death playoff. His score did not go down as an official victory because the PGA does not recognize tournaments with fewer than 54 holes played.
While the truncated tournament was by any measure extraordinary the first 36-hole event on the PGA Tour since 1996 and the first sudden-death playoff to decide a rain-shortened event since 2000 it can be considered a cautionary tale in the complicated world of sports marketing.
Dozens of companies, including Nissan, IBM, Bank of America and several smaller firms, reward their top clients, customers and employees with tickets and access to hospitality tents. While there are no firm numbers, it’s acknowledged that the weekend turnout was far below normal levels.
During Monday’s one-hole playoff, the gallery at greenside numbered around 200, compared with many thousands on a typical Sunday afternoon’s final round.
“Most of the businesspeople realize that this is a good cause and even though they may not have gotten all of the entertaining and all of the advertising they would have if we had had better weather, they’re not going to cancel their involvement,” said tournament director Tom Pulchinski. “They realize that sometimes bad things happen to good courses.”
Umbrella marketing
California Overnight, a Phoenix-based delivery service, had bought a skybox above the 18th hole and a beverage tent to host 300 of its most loyal customers. The shipping company would not disclose how much it paid, but Marketing Director Laura Klassen said that the money was well spent, rain or shine.
“We do other events for customer appreciation, but sporting events are a great way to reward customers,” Klassen said.
Even before the forecast turned soggy, California Overnight created umbrellas for its guests stamped with the company insignia. Klassen said the umbrellas would come in handy against either glaring sun or pouring rain.
“We had people coming into our tent to buy our umbrellas,” Klassen said. “We looked brilliant, like we knew what was going to happen.”
Anytime a major sports event is canceled or curtailed due to weather or other factors, hundreds of people and companies are affected not only by obvious factors such as lower ticket sales, but less obvious ones such as lost opportunities for companies to host VIPs.
“It has a pretty big downstream effect,” said David Carter, a principal in the Redondo-beach based Sports Business Group, a sports marketing consultancy. “Often times you don’t think the people are going to be affected who are affected.”
Carter said the obvious losers are companies that staked a good deal of dollars on the event, such as Nissan, which relies on the tournament as its most significant sports sponsorship. “If that’s your primary sponsorship opportunity, you just can’t get that kind of exposure again, at least until the next year,” Carter said.
Nissan spokeswoman Terri Hines said the automaker would not be deterred from renewing its sponsorship contract for the tournament in 2006. The company began its relationship with the tour in 1986 and has been the title sponsor in L.A. since 1989.
“You lose part of the tournament, but you’re mentioned on the news, on the Weather Channel where you wouldn’t have expected it,” Hines said. “You can’t always know what to expect from Mother Nature, but we expect to come back again next year for sure.”
Countrywide, the second-largest sponsor, declined to comment.
Smaller gate
Nissan’s contract with the PGA does not include a provision to lower its contribution if rain or other factors cut into play, but it is now talking about rewriting future contracts to address the possibility of rain. John Gill, director of sports marketing for Nissan North America, told the Los Angeles Times that the company was not happy about paying out the entire $4.8 million in prize money given that only two of the four scheduled rounds were played.
Also disappointed was the Los Angeles Junior Chamber of Commerce, a non-profit organization that depends on the Nissan Open for 90 percent of its annual revenue.
The group was expecting to receive $1.7 million from the event, but when ticket receipts are tallied it probably will end up with $1.2 million to $1.3 million, said Pulchinski.
The Junior Chamber uses proceeds to fund a variety of programs for at-risk youth in the Los Angeles area, including a picnic for foster families.
Pulchinski said about two-thirds of tournament revenues are locked in by contract television broadcasting rights and corporate sponsorships while the remainder comes from ticket sales. The weather cut the normal 160,000 of ticket sales in half, he said.
That left ABC and its advertisers holding the bag. This year’s event, while lacking superstars like Phil Mickelson and Vijay Singh, was nonetheless expected to generate big audiences because Tiger Woods was in the field a near-guarantee of higher viewership. But with Saturday washed out entirely and Woods struggling on Sunday, the ratings were dismal. The network had a 1.4 rating, compared with 3.2 on the same day of the 2004 Nissan Open. On Sunday, the rating was 2.9, down from 4.4 a year ago.
Officials at ABC Sports’ corporate offices in New York and KABC-TV (Channel 7), the network’s Los Angeles affiliate, declined to discuss any deals to reimburse advertisers or provide make-good time. “We always work with our advertisers to give them the best deal we can,” said ABC spokeswoman Alison Lazar.
