The Shark: survival instinct

Gi: Where’s the money in golf today?
GN: The sponsor market around golf tournaments it is a very difficult market right now – and I know this because I own a couple of tournaments myself. The money that is there is from existing contracts, signed a few years ago, pre-2008. It’s money that is locked in. There’s been a lot of negotiating around those contracts to allow some flexibility to the financial terms. If it’s happening to me on a relatively small scale, on a couple of events, imagine what it’s like for the PGA Tour or the European Tour.

Gi: Did golf become too exposed as a sport to banks and car makers?
GN: In the US there was a high number of tournaments backed by car makers and the banks and the public are rightly asking, ‘Why are we giving them our money when they are still sponsoring golf tournaments?’

Gi: The last two decades have been a bull market for sponsor rights, has that bred complacency and a lack of innovation?
GN: Absolutely it has. The model, the box that golf has been in the last 25 years has remained the same, it’s been like Groundhog Day. We have to become more sophisticated and think differently. Chubby [Andrew Chandler, founder of ISM] is right when he says the market for sponsorship and player endorsements has collapsed.

Gi: What have we learnt from the sorry Tiger Woods saga?
GN: Tiger Woods is a testament to how quickly the money can be turned off when people start pulling out and the multi-million dollar endorsements dry up very quickly. When you set your price expectations so high, your whole life is based around keeping those standards very high. Tiger is no different from everyone else – we’ve all felt the pinch at the pump. If you go back through the history of the PGA Tour, prize-money has doubled every five years. If I was CEO of the company I’d have looked at that and thought, my strike rate has been 100% every five years, how the hell can I sustain that sort of growth? Alarm bells would be going off; logic tells me that maybe I won’t be able to go from $250 million to $500 million in prize-money and maybe the Tours should have adjusted their business model. Risk management? I don’t know that the PGA Tour has that. They have to manage players’ expectations, there is going to be another recession, but the players now expect double prize-money every five years and are asking, ‘Where’s my money?’

Gi: For a sport that exudes self confidence, golf’s authorities seemed to panic in the face of the Woods issue, worried that the sport would crumble if he went. Do you agree?
GN: 100%. The PGA Tour put all their eggs in one basket. They built the tour around Tiger, sold the television contracts around Tiger, so it made the other players feel insignificant, which is a sad way of doing business because they have a responsibility to all of their constituents. The PGA Tour is a one-man one vote operation and nobody is bigger than the game of golf. The exact same thing happened in basketball with Michael Jordan and look at the dead time that basketball went through when Jordan went. They even put Phil Mickelson into a lesser category, and he has an unbelievable database of support and so much charisma. When you look at it closely, there have been some glaring mistakes made.

Gi: Do you see Woods’ business model changing?
GN: It will depend on the people around him. When you’re the No. 1 player in the world, you need people around you who you can trust and rely on because you can’t do it all on your own. You have to focus on the things you love to do – i.e. play golf in order to be the No. 1 in the world. Tiger has to re-evaluate some of the people around him. Some of the people have a different mindset – they have made a good living from selling him on the market – and he may have to readjust to that. Sometimes, someone saying no to you is the best yes you can get. He needs someone able to tell him to go in a different direction and that it will hurt for a little bit. Tiger has an enormous endorsement deal with Nike. That Swoosh is way more powerful than Tiger’s brand. Which poses a problem. He has a major association with it but he has to promote the Tiger Woods brand, and in the golf industry he is overshadowed by it, there’s no space around him for anything else. As stagnant as the golf industry is right now, It can be difficult for him to establish any solid roots.

Gi: There are parallels between Tiger and yourself, both long time world no. 1, both were IMG players and both became global brands. At the peak of your career you left IMG to go on your own. Why did you do this?
GN: In my day IMG never understood how to build equity in a brand because they were the brand. As an athlete, you are a pass through entity. They were taking commission on an annual basis and if you had a three-year deal to represent someone they would take their money and you knew there would be another Greg Norman down the line. There was, he was Tiger Woods. So they tended to have a short-term mentality to players, because it plays to their business model: they need the cash flow. When you become a living brand you tend to see things differently in terms of future earnings and how you want to position yourself in the future. I didn’t leave IMG. My contract ended and I didn’t renew it. They didn’t like it. I think since then they’ve watched me and have learned some lessons and a lot of the things they implemented with Tiger they may learnt from me.

Gi: Tiger is now in the golf course business, and you’ve been in it for a long time. My view is that the legacy of the boom years is an over-supply of the wrong type of course, which are expensive to join, difficult to play and now suffering from huge debts they can’t repay. Meanwhile, golf has not shaken off its exclusive image. What’s your view?
GN: I couldn’t agree more. As a player in the ’80s I was in the halcyon boom of corporate dollars being thrown at the game of golf. I was a huge benefactor of that money. There was a three- to five-year time period in the 1980s when everyone thought they were doing the bullet-proof right thing in terms of building courses. But what was done was absolutely the wrong thing. As a strategy it was riddled with holes. The implementation and execution was very wrong and I agree the money went into the wrong type of course. I blame the architects as well. They went out and built monuments to themselves with developers’ unlimited budgets. Instead of building a golf course for $10 million they spent $20 million. Instead of building courses that needed $1 million worth maintenance a year they need $3 million. The ongoing maintenance cost is the burden that is now showing its ugly head in America, because the membership is turning around and asking why, even an economic downturn, are we paying annual fees of thousands of bucks a year. The wives are telling their husbands that you can’t go play golf, and it all came from that moment in the 1980s.

Gi: You are targeting China. What’s the situation there?
GN: Today’s architects have inherited this disaster and we have to approach it differently. Every potential developer now has do things differently. I gave a speech in China recently and I told them, please don’t fall into the trap of what America and Britain did in the ’80s. If you want golf to grow to the level you are expecting it to – and they are talking 20 million or 30 million people taking up the game, those are the numbers the Chinese tourism minister is quoting – I told them they are going to build a lot of golf courses but don’t be a copycat. Be smart and the game will be sustainable.

Gi: Has the credit crunch hit you?
GN: Oh yes [laughs]. The biggest effect I see is in account receivables which are way out there. People want to finish their projects but are waiting before they put their money back into the project. It costs more money to shut down a project than to drip feed it. I’ve got a lot of money out there that is not being paid. I had a conference call this morning with an investment group telling me the money is there and that it would be there in two or three weeks. They’ve been saying that for two years, and we have to pay our bills, too. My guys have put pressure on them, asking why these bills aren’t being paid. But I’m a believer that the formation of partnerships in bad times is just as crucial as they are in good times. But there are some situations where you know you’re not going to get your money back because everyone has disappeared, there is not an e-mail, there’s no phone number and you don’t know where these people have gone. You know you just have to tick that box and write it off.

Gi: When we last spoke – in South Africa two years ago – you nearly won the tournament, then a few months later you led the Open going in to the final day. What are your memories of that?
GN: I remember thinking I was playing terrible going in to the Open, but when I got there I had some good feelings at the start of the week. First, I love the golf course at Royal Birkdale and the way the R&A set it up was great, the best set-up for any Open I’ve ever played in my life. So these goods feelings permeated through. Also, the weather was terrible so that was good for me because it takes away the guys that just hit from point A to point B, and some artistry was needed to get around the course, which is how I grew up playing the game. So there was a positive tone going into Thursday morning and that kept going through the week. But there are defining moments that happen for some stupid reason in life and that was one of them. And I wouldn’t be surprised to see some of the more experienced players do well at St Andrews, too. A good player of age has a chance around the Old Course.

Gi: Do you miss that artistry you speak about? Is golf poorer for the lack of it?
GN: I miss the Ballesteroses and Trevinos. When I was in my heyday, being known as the longest, straightest driver allowed me to be aggressive on every golf course I played. And I had a good short game, so those two things together meant that my iron play didn’t really matter. I attacked every pin because 90% of the time I knew I had enough that if I missed the flag on the short side I could get up and down. Today, the courses are set up differently and the length of these guys means they can hit it 350 yards, be in the rough and come out with a wedge rather than a 5-iron, which makes it a bit different. If I was 25 today in today’s era with today’s equipment, I’d still be long and be hitting driver everywhere, too.

Gi: Who has caught your eye recently?
GN: Rory McIlroy has got all the components to be a very special player. Again I don’t know what goes on around him, but you look at the guy when he walks down the fairway. He’s got charisma and he gets the connection with the galleries and on the television. He’s very aware of where he is and of his space in life. Just from the swing aspect like it. I don’t like what I’m hearing about injuries that seem to be coming at such a young age. If they are starting now then they are not going to go away because he is not going to stop hitting golf balls. He’s one of the three or four guys, young kids who are on the cusp of doing something special. Again it’s the people around them that’s important. What’s in their mind? The parents and friends have to back off and let him be who he wants to be.

Gi: Does it concern you, as it does Peter Alliss, that he’s talking to sports psychologists at such a young age?
GN: No, not at all. If I had to do my career over again I’d surround myself with all those people. Once I knew that I had it, whatever that means. If you win early it gives you confidence. I would surround myself, get the personal trainer to travel with me, the masseuse. As for the psychologist, it depends on what you take out of it.

Gi: Is that support system a product of affluence and money?
GN: Yes. And it’s important not to defer the responsibility for your own emotions to someone else. You learn more about yourself by putting yourself through all these pains and sorrows that we have to face. But you need to know how to correct the emotional feelings you have when you’re on a golf course. The character of the individual gets built rather than passing responsibility on to somebody else. But I would approach a sports psychologist in a different way. I wouldn’t have been saying to him, as some players do, that I need you on the first tee to give me my Zen feelings. I used to prepare much more the night before. I did very little preparation in the morning except look at the weather and see which way the wind is blowing.

Gi The influence of sports science is increasing, with focus on gaining small advantages over opponents. The striving for the ‘extra one percent’ has become the mantra of the sports science industry. Do you buy it?
GN: I always used the negative energy from other players as a positive energy for me, which, incidentally, I think Tiger has done brilliantly also. The rest are saying that if he’s in the field, I can’t win. When I read stuff like that it was like an extra club. I’d walk in the locker room and look around and think, who am I going to beat today? It’s not arrogance, it’s using what people give you. I agree that much of the support team that has grown up around golfers is because of the amount of money.

Gi: Are you glad you played when you did? Does it seem as much fun today?
GN: A lot of the fun comes from being around other players, which has gone now, because they all go off in their own planes once the tournament is over. We didn’t have private aircraft back then. We got together, three or four or five guys, we’d play backgammon on the train or in the airport terminal, drinking a couple of beers waiting for the next flight. Or you’d rent a car and drive somewhere with a guy, and when I was fortunate enough to get a plane I gave guys a lift. That’s what I really loved about the behind-the-scenes part of our sport. Now 80% of the guys call up NetJets or have their own private plane and it’s ‘See you next Tuesday on the practice tee’. One of the great attributes Lee Westwood has, and why he is being successful, is that he travels with his great mate, Darren Clarke. They share a plane together. They obviously enjoy that side of life and I’d suggest that has a lot to do with how well he’s playing.