Bringing the U.S. Open back to Merion Golf Club, where Bobby Jones completed the sport’s only Grand Slam and Ben Hogan’s 1-iron shot became one of its most enduring images, will result in an unusual outcome for the U.S. Golf Association: a loss.
In acknowledging history, the USGA is squeezing a 21st Century event, its fans, sponsors and media into a course built 117 years ago. Merion, in suburban Philadelphia, is about half the size of last year’s U.S. Open host, San Francisco’s Olympic Club.
Ticket sales were limited to 25,000 a day, down about 45 percent from the typical 40,000-45,000. Fewer fans means less revenue from concessions and merchandise. The USGA, which governs the sport in the U.S. and Mexico, is expecting to lose $10 million on the event, according to a person with knowledge of the organization’s finances. The person was granted anonymity because the information isn’t public.
“I don’t think we’ll make up for the loss,” Sarah Hirshland, senior managing director of Business Affairs for the USGA, said in a telephone interview. “Clearly these line items will look different this year.”
Hirshland declined to say how much money the event would lose.
Merion’s fame includes a showdown between Jack Nicklaus and Lee Trevino at the 1971 U.S. Open, a tournament which Trevino won in a playoff over a field that included Arnold Palmer and Johnny Miller.
The site of this year’s U.S. Open, golf’s second of four annual major tournaments, has been called everything from iconic to boutique by the USGA, which uses the event as its largest revenue generator. By returning to Merion, site of a record 17 previous USGA championship events, for the first time since 1981, the group has chosen history over profit.
“It’s a tip of the cap to the USGA,” Roger Maltbie, a former U.S. PGA Tour player and current television golf analyst, said on a media conference call. “They could make more money to hold it elsewhere. This is not going to be an easy Open to conduct.”
The Merion course is 6,996 yards, making it the shortest U.S. Open venue since 2004. It’s 4.5 percent shorter than the average length of the past five U.S. Open venues.
What Merion lacks in length and surrounding space, it makes up for with golf lore.
“The place is just magical,” USGA Executive Director Mike Davis said. “From a golf standpoint, you could easily say it’s a landmark.”
After its opening in 1896, Merion made its national debut when it hosted the 1916 U.S. Amateur, in which 14-year-old Jones played his first USGA championship event. He won his first amateur title at Merion in 1924, and in 1930, Jones completed his single-season Grand Slam by winning the U.S. Amateur at Merion, following his titles in the British Amateur and Open and U.S. Open.
Jones remains the only golfer to win all four of the sport’s annual majors in one year.
Two decades later, Merion became immortalized when Hogan used a 1-iron from the 18th fairway to land a shot on the green. Hy Peskin, the first staff photographer for Sports Illustrated magazine, snapped a picture of Hogan at the top of his follow-through that has become forever associated with the sport. It’s on the cover of this year’s U.S. Open program.
Hogan, who had been severely injured in a car accident 16 months earlier, went on to win that U.S. Open in a playoff the next day over Lloyd Mangrum and George Fazio.
In comparison to Merion’s tight confines, last year’s U.S. Open was staged on 250 acres. And with future U.S. Opens to be held on larger sites such as North Carolina’s Pinehurst Resort (2014), Washington’s Chambers Bay (2015) and Wisconsin’s 650-acre Erin Hills (2017), the USGA said it could afford to downsize for a year.
Even with this year’s loss on the Open, USGA spokesman Joe Goode said the group will continue to invest in the game, with $95 million going to golf-related initiatives, such as equipment testing, accessibility and pace-of-play, up from $90 million in 2012.
Just don’t expect this year’s “boutique” Open -- as Davis has taken to calling it -- to be a regular occurrence, said Hirshland, the USGA business director.
“If the organization came to me and said ‘we want to go to Merion, or a venue like Merion, six years in a row’, we’d have some real economic challenges,” said Hirshland, who joined the Far Hills, New Jersey-based USGA in 2011 after holding a similar role with Wasserman Media Group in Los Angeles.
While USGA officials declined to detail how much this year’s Open could end up costing the organization, ticket revenue and merchandise sales probably will be down about 20-25 percent, Hirshland said. In 2012, the USGA generated $106 million from its 13 different championships, including broadcast rights, according to its annual report. The U.S. Open is the group’s “most significant revenue driver,” Goode said.
The USGA’s 2012 championships profit was its second-highest total in the past six years, trailing only the $41 million generated in 2010 at Pebble Beach in California.
Four-day tickets for competition rounds were sold for as much as $175. Those tickets sold out for the 27th straight year. A lack of supply, combined with high demand, has led prices to rise on the secondary market. Four-day competition passes are being sold for as much as $998, on EBay Inc (EBAY).’s StubHub website. Single-day tickets to the event’s Trophy Club are being sold for as much as $1,899.
Ticket-holders will be greeted by wet fairways after Merion was soaked with as much as 5 inches of rain over a four-day period before the start of the tournament. More rain is in the opening-round forecast.
When it comes to fitting all of the corporate hospitality tents close to the action, only official USGA partners American Express Co (AXP)., Toyota Motor Corp (7203).’s Lexus, Rolex Group, Chevron Corp (CVX)., and its three broadcast partners, will have facilities alongside the course’s sixth hole.
All others will be located on the grounds of adjacent Haverford College or on private lawns adjacent to the course’s 14th and 15th holes. Shuttle service will bring guests to and from Merion’s fairways.
The fans on those shuttles are doing their part to try to offset the USGA’s financial loss. This year’s U.S. Open logo, which features Merion’s red wicker basket-topped flagsticks, has proved more popular than past Open logos. As a result, the sale of pre-tournament corporate merchandise was up 9 percent over last year and 26 percent over 2011, Goode said, without disclosing specific sales figures.
“There’s sort of this mystique around that wicker basket that is driving incredible interest and demand on the merchandise side,” Hirshland said. “We certainly could mitigate the loss.”
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