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A convenient marriage | Golf’s new strategic alliance

With the signing of a strategic alliance, the European and Asian Tours hope they can create new opportunities for sponsors and widen media exposure. However, both are downplaying the chances of a joint brand. Rob Ridley reports.

Having enjoyed a lengthy partnership, the European Tour and Asian Tour consummated their relationship in July through the signing of a strategic alliance designed to drive the growth of professional golf in Asia.

Nearly a year in the making, the alliance will see the two sanctioning bodies work together from a new joint office in Singapore, combining commercial and marketing resources to explore and maximise opportunities for both Tours.

February 1999 witnessed the organisations’ first co-sanctioned tournament – the Malaysian Open in Kuala Lumpur – and in the period leading up to the new alliance this figure has risen to nearly 100, including six this year.

For the European Tour, the alliance represents the opportunity to further tap into the Asian marketplace, while also bolstering its position at a global level against the PGA Tour.

New era

European Tour chief executive Keith Pelley believes the partnership heralds the start of an “exciting new era” for his organisation and can be of “immense benefit” for golf globally.

“Asia has so much growth potential and combining our contacts and resources in the continent gives us an excellent foundation to fully explore this market,” he tells SportBusiness International. “In terms of overriding goals, maximise global playing opportunities and prize funds for our members, and this strategic alliance offers a real opportunity for us to do that.” Asian Tour commissioner Kyi Hla Han points to the benefits the relationship has had to date, with the alliance set to strengthen its position in a marketplace in which it has fought a long-running battle for supremacy against rival organisation OneAsia.

Han tells SportBusiness International: “This collaboration has greatly impacted the careers of many of our members, such as Thongchai Jaidee, Kiradech Aphibarnrat, Anirban Lahiri and Jeev Milkha Singh, while the landscape of professional golf in the region has also changed in a very positive manner.

“It seemed only a natural progression for us to strengthen this partnership with the strategic alliance, where the aim is to further increase playing opportunities for both our memberships, as well as unifying marketing and operations initiatives to further grow and expand the game around the world through the creation of new tournaments.”

 

Alliance

Under the alliance, the two Tours will retain their own separate identity in terms of brand and logo, and will still be managed by their own individual boards.

From an events perspective, 2016’s six co-sanctioned tournaments have included the King’s Cup, which took place in July at Phoenix Gold Golf Club in Pattaya, Thailand, and Switzerland’s European Masters in September at Crans-sur-Sierre Golf Club, Crans Montana.

According to Pelley, the number of co-sanctioned events will rise, with the European Tour’s 2017 and 2018 schedules looking “very different”, with Asia being a “big part” of the changes.

“Initially, we will be combining our commercial and marketing resources to explore and maximise opportunities,” he says. “This will start with a joint office in Singapore, where our staff will work from, and hopefully that will lead to more tournaments and so more playing opportunities.”

There will also be an increase in the exchange of playing opportunities between the two Tours.

“We had an example of this with the King’s Cup, where the European Tour had 25 spots in the field, and it is something that you will see more of,” he adds.

“Diversity is one of the real attractions and assets of the European Tour, and if you look at some of the successes our leading members have had in Asia, such as Rory McIlroy, Sergio Garcia and Ian Poulter, they have really helped these players become global golfers. “Similarly, Asian players such as Thongchai Jaidee, Anirban Lahiri and Kiradech Aphibarnrat have undoubtedly benefited from playing in Europe in becoming more complete golfers. So the development of professional golf is hugely important in terms of the global game.”

Opportunities

Han says that the alliance will aid the Asian Tour in its goal of staging more than 35 tournaments per year in the “near future”.

He adds: “New playing opportunities for both our memberships and more co-sanctioned tournaments will inevitably allow our players to fast-track their careers, as a win in any of the co-sanctioned events will provide them with opportunities to play in the biggest tournaments create new tournaments in established markets and also in emerging markets across the region, especially since golf has returned to the Olympic Games programme.”

Han says that while “finer details” are still to be determined, the alliance can enhance benefits for sponsors and partners, and widen media exposure through the platforms the Tours own.

In particular, he believes the alliance can be fruitful in maximising the potential of the Asian sponsorship market. “With Asia being the focal point of the global economy, we want to tap into this opportunity and create new platforms for major corporations to use golf as a vehicle to promote and market their brands and services,” Han says.

“Golf is very unique in a sense that it promotes integrity, excellence and honour, which are qualities associated with many organisations who want to invest in sports sponsorship. By combining commercial and marketing resources, there will also be greater clarity in the marketplace where professional golf is concerned.”

Han also believes that the strategic alliance will allow sponsors to enjoy greater value for their investment in golf through a combined platform.

“We acknowledge we are competing for sponsorship dollars with other sports. Hence it can only be beneficial for us to combine and coordinate efforts to pitch for new business opportunities,” he adds.

 

Product

Pelley echoes the notion that combining commercial and marketing resources “will make us a stronger proposition to sponsors and partners,” but states that another important aspect needs to be addressed.

“We also need to look at the product itself,” he says. “I’ve said many times over the past year that we are in the entertainment industry, with golf as our platform and the players as our stars.”

He insists that, in order to move forward, there is a need for the Tours and golf as a whole to innovate in order to compete with other sports, and to make the product more appealing to consumers and commercial partners.

“Alongside commercial and marketing growth, you will see a continuation in the changes we are currently making to our content, which in turn will make us more of an attractive proposition to potential sponsors and partners,” he adds.

Looking long-term, Han says that he has multiple goals for the alliance from the Asian Tour’s perspective, chief of which is becoming the standard-bearer for golf development on the continent.

He says: “We want to remain as the breeding ground to create new golf champions from Asia capable of winning Major championships, Olympic medals and becoming top-50 players in the world.

“It is also very important for the Asian Tour to play a leading role in growing and popularising golf in emerging nations in Asia. We have succeeded in growing golf in countries like Bangladesh through the emergence of Siddikur Rahman, who is now a two-time winner on our Tour, as well as helping the country launch its national Open in Dhaka last year.

“Vietnam is another good example where it hosted its first $1.5m (€1.3m) Asian Tour tournament last year through the launch of the Ho Tram Open, which will be rebranded as the Ho Tram Players Championship in 2017.

“We see these developments as being vital towards our aspiration to encourage more young people to play golf and eventually dream of becoming world-class golfers.”

Global

Downplaying the chances of an all-encompassing European Tour-Asian Tour brand, Pelley highlights the importance of the alliance in addressing the lure of its rival organisation across the Atlantic.

With PGA Tour commissioner Tim Finchem having touted a system for professional golf to be controlled by one global organisation, the European Tour appears focused on driving forward on its own path.

Pelley concludes: “We currently have 47 tournaments in 27 countries, so in many ways we are already a global Tour and our strategic alliance with the Asian Tour, as well as our strong partnerships with other Tours, serves to underline that and will help to strengthen us globally in the future.

“As part of the strategic alliance, we decided the two Tours would retain their individual identities and brands, so a joint title is not a move we are currently looking at. However, the strategic alliance means the two Tours can work together to really benefit professional golf in Asia and globally.

“This forms part of our overall European Tour strategy to combat the migration of players to America, giving them a viable alternative in terms of playing opportunities and prize money.”

 

The Right Time

The path to the forging of the global alliance was far from smooth. In August 2015 the European Tour and Asian Tour announced an “innovative joint vision” for the future of professional golf, entering into an exclusive discussion period to flesh out the masterplan. At the time, former Asian Tour chief executive Mike Kerr pushed for a merger into one golf entity, with single membership featuring current European and Asian Tour players.

The merger proposal caused fears among some Asian Tour players that it would lead to diminished playing opportunities and that they could be usurped by the bigger, more powerful European Tour. These fears ultimately led to Kerr’s departure in December and a subsequent shake-up of the Asian Tour.

Several board members left and four leading Asian businessmen were appointed as non-playing directors. Jimmy Masrin, president and chief executive of chemicals and mining firm PT Caturkarsa Megatunggal, was one of the non-playing director appointments and, in his role as board chairman, he helped to plot the course for the new vision.

Commenting on the gestation of the alliance, Han says: “Our membership felt that we should retain the identity and independence of the Asian Tour over the long haul. Hence we re-negotiated with the European Tour on a new deal. As a members’ organisation, our players’ views are very important for us to chart the course of the Asian Tour.”

Pelley adds: “Formalising any partnership presents its challenges and for anything like this to be a success, it is vitally important that both parties are entirely happy with the arrangement. That is why we entered into a detailed period of exclusive negotiation with the Asian Tour following the announcement of our joint vision last August, to ensure that we arrived at the right outcome.

“Obviously there were some changes at board level in the Asian Tour during this period, but the new chairman, Jimmy Masrin, and his board moved the negotiations forward and when we announced the strategic alliance in July, it was the right time for both Tours. Both Tours are fully committed to making the strategic alliance a success.”

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