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Pebble Beach planning on big profit from US Open

The hammering, clanking and shouting going on at Pebble Beach these days is not from the legions of hackers assaulting the storied course but the preparation for the U.S. Open. That begins June 15, and these are not just the sounds of construction. These are the sounds of cash being printed.

If time is money, then timing is everything. In 1993, the USGA designated Pebble as the host for the 2000 Open, and planning for it began almost immediately in the Del Monte Forest.

In the interim, the Pebble Beach Co. and its considerable holdings were purchased by an investment group led by Arnold Palmer, Clint Eastwood and co-chaired by Peter Ueberroth and former United Airlines chairman Dick Ferris.

On April 26 of last year, the group put down five percent of the $800 million purchase price and took control of the sprawling facility July 31.

"I've had some experience in other sports," Ueberroth said. He was president of the Los Angeles Olympic Organizing Committee for the hugely successful '84 Olympic Games and was baseball commissioner from 1984-89. "I think this is the most important (event) I've had to watch from the sidelines. The 100th anniversary of the Open, in the year 2000, our first year of ownership, comes together in a special way."

Symbolism is nice but synergy pays the bills. Pebble Beach is paying the USGA about $5 million to stage the Open. In return, Pebble Beach has the rights to hospitality, ticket, parking and concession revenues, and of course, covers the expense of all of those.

Basically, the USGA controls what goes on inside the ropes, with some input on logistics from Pebble Beach, and Pebble Beach controls what goes on outside the ropes with guidance from the USGA.

At private clubs, such as Olympic in '98 and Southern Hills in '01, the USGA pays the club a fee and uses incentives to participate in a percentage of the net in certain areas, such as merchandise and hospitality.

The USGA's take varies on its contracts with the host sites, but the bulk of its net comes from its television deal. The Open is just one of its telecast events, but it's by far the biggest and commands the lion's share of the annual $25 million rights fee. Championship proceeds support the USGA's various programs.

No one at Pebble is saying just how much it might net, but there are some numbers that give context to the concept of "a lot."

Paul Spengler, the vice president for golf at Pebble Beach since 1990, was the general chairman of the Open when Pebble hosted in 1992 and is again this year, the fourth time the course has hosted the Open since 1972.

He said that the Open expects to bring more than $500,000 to area charities. That's about $1.5 million less than the AT&T Pebble Beach National Pro-Am has done for years, but that PGA Tour event is organized by a non-profit charitable foundation. Pebble Beach is privately held and all about profit.

The economic impact of the Open week's guests on Monterey and surrounding counties is expected to be $30 million.

In '92, 25,000 fans were admitted daily; next month there will be 32,500 daily. There were eight corporate hospitality tents on the course in '92, clustered on the dogleg of the third hole. This year there will be 47, including seven to the left of the sixth fairway in the middle of the course and three to the right of the 15th fairway alongside 17 Mile Drive. Another 13 spaces have been reserved in the Lodge and its restaurants.

The par-3 Peter Hay course adjacent to Pebble Beach will be nearly covered between the media and merchandise tents. Once they're dismantled, the course will undergo significant renovation; again, a Pebble Beach expense.

The AT&T uses about 1,600 volunteers, many of whom help with parking and traffic flow in the Forest. This Open will use about 4,500 volunteers and aside from competitors and officials, support staff and some hospitality guests there is virtually no parking in the Forest. Fans will park about 10 miles away at Fort Ord and be bused in and out.

The '99 Open was big for Pinehurst, a privately held, multicourse facility in North Carolina. This is going to be bigger in almost every way for Pebble Beach.

"Both Olympic and Pinehurst did a phenomenal job," said Spengler, who has taken notes at every Open in the '90s and seen the tremendous increase in demand for participation in the event. "We have reaped the benefits of that popularity."

Steve Worthy, the USGA director of operations and his assistant, Frank Bussey, have paid the price.

They moved seven times in as many years coordinating Open setups. Worthy this year settled in Charleston, S.C.; Bussey's on loan to Pebble Beach and on about Aug. 1 will move to Tulsa to start work at Southern Hills.

"We get it all the time," said Worthy, a little wearily. "You spend a whole year doing this?"'

Bussey is on site overseeing the installation of, among other things, grandstand seating -- for about 20,000, up from 11,000 in '92 -- plus nearly 350,000 square feet of corporate, media and merchandise tenting, about 1,000 phone lines, 77 office trailers, close to three dozen generators, hundreds of Port-A-Johns, even thousands of annuals in landscaping around the course.

Worthy, meanwhile, already has locked up contracts through the '04 Open covering parking and tenting, and is working on deals with vendors and security.

So, no, it doesn't take a whole year to stage the U.S. Open. It takes whole years. And all that's left now is a month or so before the cash registers start ringing at Pebble Beach.

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