Financial State of PGA Tour Sponsors

Having watched several PGA Tour sponsors fall in recent months like meteors from the nighttime sky, I thought it would be interesting to take a look at Tour sponsor stock values over the last two years.

I expected it to look bad—based on the recent results of my own investments—but had no idea how far the mighty have fallen. Fully half the publicly traded companies that sponsor PGA Tour events have suffered more than 50% losses. Nearly a third are down 75% or more. A few are on life support: GM (Buick), FBR and Barclays are in the penny stock range.

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The only one on solid ground appears to be MasterCard. But since Obama has given people the idea that they don’t’ have to pay their mortgages, how long will it be before we see a groundswell of refusal to pay off credit card bills? I’ve already read of a movement in Congress to force the credit card companies to get rid of their confiscatory fee and penalty structure. Once Congress gets its hands on them, even the plastic robber barons will be up a creek.

Stock values of course don’t tell the whole story of a company’s viability. Some clearly are undervalued; others, over because of the vagaries of the market. But I don’t think its unfair to assume that the brokers have each done their own analysis of the value of the companies they’re trading, and that the aggregate of their analysis is reflected in stock prices.

If I were Tour Commissioner Tim Finchem I’d start looking around for a few replacements. And I doubt the new contracts will be as lucrative as the previous ones. When stock values are down forty, fifty, sixty percent or more, it’s going to be hard to sell a golf sponsorship to the shareholders. And that doesn’t even take into account the meddling of Congress, which already believes that it can run the auto companies and banks better than the experts in the field. if Congress is going to ban private jets, how will they feel about golf tournaments?

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4 thoughts on “Financial State of PGA Tour Sponsors”

  1. Thanks for the info! I printed this one out.
    Now that we know what the tour is up aganist, what about the average joe golfer? Any info on golf course’s re-ducing their rates? Here in the mid-west I am starting to look at 2009 rates and they have not gone down.

    Thanks

    Reply
  2. If people don’t have to pay their mortgages, then I’m guessing the PGA Tour players don’t have to play for smaller purses either and the tournaments that are left on the schedule will eventually fold due to the inability to find anyone who will put up the money that the tour players are used to seeing. 

    I never knew I was such a Republican until I heard about the ‘spread the wealth’ thing and this new housing proposal.  What happened to personal responsibility?

    Reply
  3. Dan: I actually have LOTS of faith in the system. Unfortunately, I have no faith that Congress and Obama will let it work. It’s Bush’s fault in a way, but not how the lunatic fringe would put it. When the first brokerage and bank came to Bush he should have told them: file Chapter 11. Then, the FDIC would do what it should do: pay off the depositors in short order. The depositors would take their money to another bank and deposit it there, thus shoring up other banks with an infusion of liquid capital. That would have made those banks stronger. By shoring up a bunch of underfunded, overextended banks, all we’ve ended up with is a bunch a underfunded, overextended banks.

    I think we wouldn’t be in this mess if Bush had held to conservative principles. The remaining banks would have plenty of money to lend, the auto companies would be able to borrow money to get past this hurdle, etc.

    What Bush did was extend the “crisis” and open the door for a cycle of ever growing government control of the economy, all of which is only going to make things worse. Obama knows this, which is why he continually tells us how bad things are going to be.

    There’s a growing body of economic evidence that FDR’s New Deal actually extended the Depression.  ( http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx ) I think this current problem will do the same, thanks to Bush-Obama economic policies.

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  4. Actually, if you have faith in the system, now would be a good time to start buying some of these stocks.  It’s about all the hope I have left anymore. :S

    It will be interesting to see how the economy has affected the number of rounds at the local courses.  The 2009 prices are listed and at least they haven’t gone up.  With the snow finally starting to melt off, a few places have started to open.  When I go to the driving range, I do see quite a few people there.  Not having golfed before last summer, I don’t know if it’s fewer, but one would think it is.

    Reply

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