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Eastern Promise

Hired for his regional expertise in the sports broadcast space, Asian Tour CEO Mike Kerr has brought a fresh perspective to an organisation he believes is perfectly placed to benefit from golf’s shift of influence eastwards. He spoke to Matt Cutler.

That Asia is the new frontier for golf, or any number of sports you could care to mention, is far from a revelation to anyone keeping even a half-eye on the sports industry.

The next generation of major winners will be Chinese, golfing analysts predict, while a fifth major somewhere on the Asian continent looks ever-more likely as the years pass.

Why? The factors deserve an article in their own right, but it is a combination of growing middle-classes across the region taking up the sport and golf’s inclusion at the Olympics leading to greater participation at a youth level and in schools. Blue-chip and luxury brands, meanwhile, are seeing golf in Asia as a means of reaching a wealthy demographic, creating a vibrant commercial landscape for the sport, the profits of which are being reinvested into the elite end of the game.

Ten years from now, March 29 2014 may well be viewed as a watershed date. That day, the third and final of the EurAsia Cup matchplay competition between Europe and Asia, Japan’s Hideto Tanihara tied the final match against Spain’s Gonzalo Fernandez-Castano, resulting in the two teams sharing the trophy.

Played for the first time in 2014, the EurAsia Cup is based on the Ryder Cup competition played between Europe and the United States and was created by the European Tour and the Asian Tour, the primary golf tours on the two continents. And though the Asians didn’t win the 2014 EurAsia Cup, Mike Kerr, CEO of the Asian Tour, believes the fact they equally matched their European counterparts showed the golfing world that the continent’s stars can compete with the best of the best.

“In its first year, the EurAsia Cup couldn’t have been scripted any better,” says Kerr over breakfast in London before he heads up to Liverpool for the 2014 Open Championship. “The Asian team pulled off a draw going in as the underdog.

“The Europeans brought over nearly the strongest performing team they could have, with eight out of ten maybe at the peak of their game. Now they have seen what the EurAsia Cup is, and having seen the strong performance of the Asian team, we have effectively laid down a challenge. Psychologically, that is important – it wasn’t one Asian playing against one European, it was the whole Asian team playing the European team.

“The Asians are improving all the time, and they don’t play much team competition, but they have the individual skills to compete. The Europeans will see that in 2016 and I’m sure they’ll bring the strongest possible team to try and win the EurAsia Cup for the first time.”

 

Broadcast Expertise
The Asian Tour sanctions, manages and promotes the professional golf tournaments in the region that comprise it, while also co-sanctioning a number of events on other tours. In the current season, tournaments take place from as far west as India to Japan in the east. In terms of prize money, the Asian Tour offers the third largest pot after the PGA and European Tour respectively.

The Asian Tour board is headed by chairman Kyi Hla Han, a former player from Burma who claimed 10 professional wins during his career, and current players on the Asian Tour include Thailand’s Thongchai Jaidee, Asia’s EurAsia Cup captain and the current world 39. At the time of writing, India’s Anirban Lahiri, who is ranked 94th in the world, leads the Asian Tour Order of Merit.

Kerr, who became CEO in March 2012, is relatively new to the golf industry, but not Asia itself. He left Northern Ireland in the mid-1990s in a government scheme that matched top university graduates with Irish businesses across the world, moving to Singapore – originally on a six-month placement – and never returning. Six years working in the mineral and mining industry was followed by a move into sport and ESS (ESPN STAR Sports), the pan-regional broadcast venture between ESPN and News Corporation. In a 12-year stint at ESS he held a series of positions, including senior vice-president roles handling advertising and sponsorship strategies, broadcast rights and channel syndication.

It is his knowledge of the sports broadcast business across Asia in particular that saw him headhunted to run the Asian Tour. Significantly, in November 2010 the Asian Tour signed the biggest deal in its history to create Asian Tour Media, a joint-venture with IMG Media that manages all broadcast production and distribution of Asian Tour events.

Asian Tour Media employs 22 full-time staff, and its content – a mixture of live coverage, highlights programmes and magazine shows – has a potential reach of over 600 million homes. In 2013, it produced over 300 hours of live content for Asian Tour-sanctioned events.

The cornerstone of any sport is TV. The adage ‘no TV, no sport’ is more relevant today than it has ever has been

“When I was approached for the [CEO] role, the Asian Tour was going through some changes and more significant than anything else was the joint-venture with IMG,” says Kerr.

“The Asian Tour was run predominantly by people who had been involved in the game of golf and had grown up in the sport, but not people that had the wider respect in terms of the business of sport and, in particular, the business of TV…for 12 years I had learned sports broadly across the region and what works and what doesn’t in different markets.

“The cornerstone of any sport is TV. The adage ‘no TV, no sport’ is more relevant today than it has ever has been. A lot of people say TV is dead, but TV is just a screen…tablets, smartphones, computers – they’re all screens. It’s about pushing content to the widest possible audience, and an audience that is prepared to pay for it – without that no professional sport will survive.

“Most sponsorship deals come off the back of TV exposure so it’s an incredibly important part of our business. I think with my experience I’m able to understand what Asian Tour Media is doing, how it packages rights, and I know the people they are talking to, certainly in the Asian region…long-term it is the most important part of our business.”

 

Kerr says it took little convincing for him to make the move to the Asian Tour due to a long-held belief that golf in Asia has a huge scope for commercial growth – something the Asian Tour is perfectly positioned to take advantage of.

“I had thought that golf – and I still believe this – was the sport that had probably one of the best, if not the best, potential in Asia to grow and become a significant part of the continent’s business,” he says.

“If you look at globally relevant sports – there’s only a handful that every pay-TV channel would have to dip into. That’s football, basketball, tennis, motor sport and golf. You do have regional sports that are attractive and would come into that on a market-by-market basis – cricket in India for example – but that doesn’t translate across the region or globally.

“Football is dominated by the European game. So the barriers to entry from an Asian football perspective – to create a relevant football platform – are very high. The same exists in basketball – you have the NBA (National Basketball Association) and nothing else globally comes close. Motor sport is Formula One and while Formula One pops into Asia now and again, it’s more an entertainment opportunity and a circus. And it’s the same in tennis: it is globally administered by the ATP (Association of Tennis Professionals) and WTA (Women’s Tennis Association), who dip into Asia now and again, but to build something that could compete with them and attract sponsorship, would be very difficult.

“Golf is different and I thought there was a real opportunity. Golf is regionally administered, and before I joined, the Asian Tour already had players who were participating at the very highest level on merit.

“Then there’s the growth of golf, and that’s related to the growth of economies and of the middle-classes across Asia. As this happens, people have more leisure time and they are looking for lifestyle pursuits. Combined with the business opportunities golf can offer, that sets it apart once again. So it was a perfect storm for me – all of that combined was the incentive to get involved in the sport and just over two years later I see nothing that has changed in terms of the opportunity that exists.”

Growth for us is two-fold. You’ve got relatively low penetration of pay-TV in Asia across the board, and then you’ve got the growth of golf as a sport

Business Development

Kerr is now over two years into the CEO role, and though he says he didn’t come in with a strategic plan, he says there were clear areas of investment that were needed to strengthen the organisation and put it in a position to undergo significant commercial growth.

“Within the first 100 days I presented to the board where I thought we could be in 10 years…from there we worked out what business areas we needed to build and what people and skills we needed to get there. The last two years have been about building that structure and refining that strategy,” he says.

“We have a business development team and a tour development team where we’re investing in particular. Tour development is about growing our existing business, whether that’s sponsors or tournaments, to build credibility. That team also helps to develop promoters across Asia.”

The business development team is run by Richard Atkinson, who ran the ExCel venue at the 2012 London Olympics and also worked at the European Tour as head of operations for three Ryder Cups. He is an example of a hire that Kerr says, like himself, brings a wider, non-golfing perspective to the organisation.

“To bring that best in class – not just in golf – into the Asian Tour to drive the business has been important,” says Kerr of Atkinson. “The business development team is led by Shahid Sen, who joined us from Repucom. His team is tasked with new business – new sponsors, events and promoters – and to have someone with that broad experience and understanding of sport, in particular the value of sport on TV, is something that was lacking in the Asian Tour previously.”

Ultimately, as a players’ body, the Asian Tour’s role is to increase revenues and the amount of prize money for its players, which stood at $45 million from 25 tournaments in 2013, up from $44.5 million for 27 tournaments in 2012. Broadcast rights-fees brought in by Asian Tour Media form the bulk of the tour’s commercial revenues, and Kerr sees room for significant growth in that space.

“Growth for us is two-fold,” he says. “You’ve got relatively low penetration of pay-TV in Asia across the board, and then you’ve got the growth of golf as a sport. The appetite for golf is growing and the propensity to pay for it is also increasing. We’re seeing that with golf-specific channels popping up all over Asia…golf has been seen to be sustainable as an individual sport on an individual channel. It can also serve in a multi-channel world where we have some of our content in some markets on multiple channels.

“The other opportunity exists, again, with the diverse methods of getting content to people. Whether it’s by tablet, smartphone or whatever, I think golf is going to be able to play an important role in that space.”

Brand Attraction
There are also markets where Kerr believes more tournaments can be held. The Asian Tour manages a number of events, but its preference is not to underwrite or promote the event itself, rather work with established promoters who have their own expertise.

“There’s a block – China, Vietnam, Cambodia, Laos – where the expertise, in terms of running professional golf tournaments, is not at a level where we can have multiple tournaments,” he says. “So that’s a target for development…but we want to go in and create something that grows sustainably.”

Sponsors, too, will be looking at the Asian Tour and its golfers with interest going forward. The Asian Tour has a number of partners already, including Rolex (official timekeeper) and Singha Beer (official beer) and golf brands Srixon (official ball) and Abacus (official apparel partner), and Kerr says there are few other sports platforms – if any – that offer brands relevance both on a pan-regional and market-by-market basis in Asia.

“All sport is nationalistic, and you have to have your guys to cheer for, whether that’s the Thais and Thongchai Jaidee or the Indians and Anirban Lahiri…predominantly Thongchai has relevance and is an asset from a Thai perspective. It’s the same across Asia. That relevance and opportunity to tap into those various markets is what sets the Asian Tour apart – we are in all of those markets. There’s a fantastic opportunity,” he adds.

 

“In the short-term, you’re going to see consolidation within global golf. That will translate into more co-operation between tours, so you’ll see more co-sanctioned or tri-sanctioned events in the Asian market and outside the Asian market with the Asian Tour. It’s not just about the opportunities for golf and golfers within Asia; it’s also the opportunity for brands to be relevant in Asia.

“If you have a luxury band in Italy, for example, your biggest market is Asia. It’s probably the same for every luxury brand out there. It doesn’t make much sense for a luxury brand to be involved in a European event that has no connection to Asia. But it does make sense to reach out to the Asian market through the Asian Tour and Asian golfers. Whether the event is based in Asia or in Europe – the Asian relevance is only going to be beneficial for their brand and business.

“We did an interesting piece of research about the 2012 Omega European Masters [a European Tour golf event held in Switzerland and co-sanctioned by the Asian Tour]. We looked at one market, India, and there was something like 85 press articles about the tournament. Eighty of those were about the Indian players; only five were about the actual result, and even in those articles the winner was the headline but it very quickly went on to say how the Indian players performed. That’s what I mean about sport being nationalistic and having that relevance – if that event didn’t have the Asian Tour players involved, there wouldn’t have been 85 articles in India – there would have been five articles.”

Matchplay Focus
There’s also the matter of the aforementioned EurAsia Cup, which Kerr believes is the single-most important platform for Asian Tour golfers going forward. The next two editions will both be held in Asia, with the second, in 2016, looking likely to be hosted in Malaysia again with Kerr already securing the support of both the Malaysian government and the Malaysian prime minister. A date and venue will be announced by the end of the year.

“The EurAsia Cup was an opportunity for the two tours to construct something where we felt there was a gap,” Kerr says. “Importantly, it was the two players bodies that were doing it and taking the risk, and I think from an Asian perspective it is a way for us to profile Asian players, having them play against some of the best in the world on an international stage. Long-term, I think [the event] will be the biggest asset for Asian golf. It’s about building the personalities and superstars of Asian golf and it can only help our business going forward.

“You can define players by their world rankings, but when you do a straw poll in the UK about [Englishman] Ian Poulter, fans wouldn’t talk about his world ranking, they’d talk about the Ryder Cup. The Ryder Cup in particular is what we are benchmarking against – it’s not just an incredible sports event, but it’s an event that helps define professional golfers. We think the EurAsia Cup will not only build value for Asian players individually but it will also build a lot of value for Asian golf and therefore the Asian Tour.

“It must also be remembered that for the European players, the EurAsia Cup gives them a huge platform in the Asian market. It’s not just that Asia represents an opportunity for golf, it offers an opportunity for professional golfers, and particularly from a personal endorsement and sponsorship perspective.”

 

Curriculum Vitae
Mike Kerr (CEO, Asian Tour)

Mike Kerr has been in Asia for 20 years in various senior management roles based in Indonesia, Singapore and Hong Kong. He has also represented the Hong Kong rugby union team.

In August 2000, he joined pan-Asian sports broadcaster ESS (ESPN STAR Sports). At ESS he held a series of roles until 2012, and in his last position, as vice-president of affiliate and multimedia sales, he was responsible for ESS’ channel business across south-east Asia. He also led ESS’ sponsorship strategy globally and managed direct sales in a number of Asian and international markets.

Kerr joined the Asian Tour in March 2012, and as CEO he manages the strategic direction of the organisation with the aim of continuing to build and promote the global profile of the professional golf circuit. Based at the Asian Tour’s headquarters in Singapore, he heads a team of 30.

Kerr holds an honours degree in civil engineering from the University of Edinburgh and a Masters degree in applied environmental science from Queens University, Belfast.

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