Deutsche Bank’s four-year contract with the PGA Tour expires after next season, but the company has an option to pick up two more years.
The PGA Tour will begin negotiating a number of extensions in the coming year.
Every Tour event is signed through 2010 with some through 2012.
Waugh, who met with a small group of reporters Sunday night in the back of the tournament media room, sounded like a man who wants to renegotiate his two-year option, or negotiate better terms in a longer extension. Waugh said he didn’t mean to negotiate through the media, but in openly answering questions about the nature of title sponsorship in these tough economic times, he laid out what he and other companies will be thinking as the PGA Tour seeks to extend existing contracts.
Waugh cited the popularity of “Cash for Clunkers” and discount hotel reservation Web sites as examples of where business is trending.
“I think [the PGA Tour] needs to think about things,” Waugh said. “I would not have raised purses last fall, not because they couldn’t, but because it was the wrong message. Every model of every business is under pressure, and you have to create more value for people, either by doing it cheaper, or by creating more value. People want a deal. They want to feel like they are getting more. They have to think their way through that, having people feel good about the experience, as opposed to being dictated as to what it is.”
PGA Tour commissioner Tim Finchem is scheduled to be at TPC Boston Monday.
Waugh said six months ago he wouldn’t have been optimistic his company would pick up its two-year option or negotiate an extension, but he is now. Still, he believes the Tour has to re-think what it’s selling.
The Deutsche Bank Championship’s purse increased from $7 million to $7.5 million this year with Deutsche Bank’s costs scheduled to go up again under terms of the two-year option.
“Everything in the world costs less now than it did two years ago, it just does,” Waugh said. “I’m not trying to negotiate with you guys, but yeah, if some value can be created in that, we would welcome talking about that.”
Waugh said this year’s tournament is looking like another large success for the company, something that might have been in doubt earlier this year with golf sponsorship under assault by Congress. He said executives who didn’t want to be seen at golf tournaments don’t mind being seen at this week’s tournament.
“We have created a lot of value,” Waugh said. “We took a dead [Labor Day] date, delivered Tiger Woods, delivered a world-class event. I don’t mind paying for that, but I also don’t want to get charged for the value I created.”