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JUNE 16, 2003
The Ultimate Corporate Schmoozefest How business helps make the U.S. Open a money magnet The 156 golfers who tee up in the U.S. Open on June 12-15 can look to more than picturesque fairways for inspiration. Prize money for golf's national title is a record $6 million, with the winner nabbing a cool $1.08 million. The flush payday reflects the U.S. Open's stature as one of America's elite spectacles -- and among the richest. This year's Open near Chicago is expected to generate profits of nearly $40 million for the U.S. Golf Assn., making it more lucrative than all but extravaganzas like the Olympics, college basketball's Final Four, and the Super Bowl. In attracting corporate revelers, the Open has even fewer peers. Fifty-five corporations are paying $90,000 to $165,000 for an address in one of several swank corporate villages this year at Olympia Fields Country Club. An additional 210 "hospitality tables" priced at $30,000 have been sold to companies lured by easy access to the Windy City and the appeal of a sport that many execs enjoy watching almost as much as they do playing. Last year's U.S. Open in Manhattan's backyard, at Bethpage, N.Y., packed in a record 78 corporate tents. "We've asked companies: 'What makes spending on the U.S. Open a good decision?' They say if you're entertaining your best clients, you want the biggest event," says Mike Butz, USGA deputy executive director. Schmoozing translates into fast money for the USGA. This year, the host club is receiving an undisclosed share of the estimated $10 million in profits from corporate partying. But as with Tiger Woods winding up on the tee, balance is key to the USGA's money game. Sales of U.S. Open-branded paraphernalia figure to bring in $4 million to $5 million in profits. And ticket sales may generate twice that. The Open is a sellout for the 17th consecutive year. Still, those are chip shots compared with the hole in one the USGA scores on TV rights. "You're talking about a dramatic event, open to pros and amateurs, that crowns the official U.S. champ. It's compelling TV," says former CBS Sports President Neal Pilson. And unlike the anti-marketing Masters Tournament, which limits ads, the USGA doesn't shackle the networks. So NBC's coverage, plus international rights fees, will fetch the USGA at least $20 million, say insiders. Such booty helped the nonprofit governing body of the sport in the U.S. ring up a $21.5 million surplus last year. It uses the money to support other tourneys, youth programs, and the like. For businesses big and midsize, the real action will take place in the hospitality hamlets, where the smell of mown grass meets the aroma of expensive cigars and guests sip mimosas while keeping an eye on the TVs. "The food is excellent. It's all the drinks you want. If you get tired walking the course, come in and watch golf on a whole battery of TV sets. How's that sound?" asks Vince Greci, chairman of the Open for Olympia Fields, which is receiving a rental fee of about $4 million from the USGA. This year's lineup of tenants includes Bank of America, AT&T, Hertz, and Unisys, which will be hosting 350 guests at its 150-square-meter tented suite. Invitations are coveted. "It's an investment for us. We do want senior people" to attend as guests, says Terry Weipert, Unisys Corp.'s marketing chief. The tents are air-conditioned, seat up to 100, and boast PC stations where stat mavens can monitor the putts-per-hole average of their heroes. Catered meals and open bars add to the allure. So do the few tents that feature live entertainment. In 1990, at Medinah Country Club near Chicago, the USGA rushed to quiet a party so loud that golfers playing nearby holes were cursing to the beat. Officials pushed open the door to find crooner Tony Bennett in mid-warble. "One of us actually had to go and pull the plug on Tony Bennett," says Butz. Foul weather at last year's Open also made for a memorable day, because rain makes for more drinking. A tipsy golf fan stumbled out of a corporate tent and commandeered a golf cart. After zigzagging around the course, recalls John Feinstein, author of Open: Inside the Ropes at Bethpage Black, he was nabbed by police and charged with DUI. That's too much fun at the Open -- or too much something.  By Mark Hyman Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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