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Fred Meyer pulls sponsorship deal

After 17 years of bringing men's professional golf to Portland while providing millions of dollars to local children's charities, Fred Meyer said Tuesday it would discontinue sponsorship of one of the city's signature summer events.

The decision leaves in question the future of what was the Fred Meyer Challenge.

Loss of the tournament would leave charities scrambling for money and volunteers at a time when nonprofits are hurting in the state with the nation's highest unemployment. It could mean the Northwest will lose its only regular chance to see such golf legends as Jack Nicklaus and Arnold Palmer. It could mean no more rounds from current stars such as David Duval and Phil Mickelson.

Portland native Peter Jacobsen, the PGA Tour pro who founded the Challenge -- a two-day event staged traditionally in early August -- said the event could go on without missing a beat if a new sponsor is found within 60 days, or even by year's end.

"We are exploring all possibilities," Jacobsen said, the six-time PGA Tour winner whose sense of humor has shaped the tournament's identity.

But it's a tough market and another indicator of the current corporate atmosphere, which has left as many as 10 PGA Tour events potentially without title sponsors for next year. It's a situation that would have been unheard of even two years ago when Tiger Woods ratcheted golf's popularity to an all-time high that left no room on the Tour's schedule.

Fred Meyer's pullout as title sponsor leaves a void, as few local companies have the $4 million to $5 million a year it takes to put on the Challenge, especially in tough economic times.

Sam Duncan, president of Fred Meyer Stores Inc., said this decision was based on the amount of money spent and where it goes.

Tuesday's decision was all about consolidation. The retail industry, Duncan said, has undergone a lot of it.

Fred Meyer was able to offset the cost of the Challenge with help from vendors. But as the number of vendors shrinks, that gets harder to do.

Duncan talked about the growth of Fred Meyer, which has stores throughout the West, although most of its charitable work is done in Portland.

When this year's numbers are added up and the checks cut, during its 17 years the Challenge will have donated more than $10 million in net proceeds to more than 80 charities. Duncan said the company would like to use its Fred Meyer Foundation to spread charity money beyond Oregon. Worth noting, too, is that Fred Meyer is no longer a Portland-based company. Cincinnati-based Kroger bought the company in 1998, but Duncan was quick to point out: "It was a Portland-based decision."

And that was that. Jacobsen said he was still a little in shock. He and Ed Ellis, president of Peter Jacobsen Productions, have talked about Plan B, but they were trying to avoid having to act on it.

Now PJP, which also would take a financial hit without the tournament, will begin the search for a sponsor in earnest. The charities will wait and watch and hope. There were eight this year, all catering to children.

The Challenge has a prominent place on the Web site of Metropolitan Family Service. Krista Larson, the program's executive director, said it receives $60,000 to $70,000 a year from the tournament and is one of the event's original charities.

"We're really going to have to figure out what this means to us and our programs," Larson said.

Chris Krenk, president and CEO of Albertina Kerr Centers, said if the agency loses money because of this, programs designed to help children who have behavioral or psychiatric problems might have to be cut.

The Challenge isn't Krenk's only worry.

"We receive a little more than 90 percent of our funds from government entities, and you know what's happening with government," he said.

Kathleen Ellis, state director for the March of Dimes, said the organization not only gets money from the Challenge, but has found the tournament also provides the perfect venue to build its volunteer base. The same is true for the Boys and Girls Clubs of Metropolitan Portland.

"I guess I'll get on the phone to Nike," Krenk said.

He was joking, but someone from PJP will call Nike and a lot of other companies.

Ideally, Jacobsen said, a local company would come through, and the Challenge would arrive next year as if nothing had happened. Nike, with its entry into the golf market and its association with Woods, makes sense, but Nike officials have consistently said tournament sponsorship is not an immediate interest. Nike representatives could not be reached Tuesday.

The Challenge may look nationally for a sponsor, Jacobsen said. The tournament still has a contract with ESPN, so it gets beamed out across the country. Maybe a national sponsor will want to turn the Challenge into a full-field PGA Tour event.

Ellis said it is possible such a deal could be done in time to have an event on the schedule next summer. More likely, however, it won't be before 2004.

But these just aren't the best times.

The Reno-Tahoe Open, which PJP produced, was just played for the fourth time without a title sponsor. PJP is trying to line up sponsorship for a PGA Tour event in Seattle but has had no luck.

Rick Burton, director of the Warsaw Sports Marketing Center at the University of Oregon, said sponsorship tends to be cyclical, and the concept of market correction comes into play. It's similar to the stock market.

Times were so high, perspective and prices got out of whack. Now it's evening out. Not lost in this discussion is the role of recent corporate scandals at companies such as Enron and WorldCom.

Enron used to have its name on a baseball stadium in Houston. It doesn't anymore. WorldCom used to sponsor a golf tournament in Hilton Head, S.C. Not anymore.

"I think people are saying, 'Hey, we better be accountable for how our dollars are being spent,' " Burton said.

Which doesn't help Portland charities or golf fans. Even a full-field event is likely to bring less money. It would bring a different feel. The Challenge has been a tournament that is fun for players and fans alike.

It has given golf fans a chance to see more than 90 professional golfers. It's provided a lot of memories.

Earlier this month, professional Tour player and Wilsonville resident Brian Henninger, who has a charity event of his own, choked up emotionally on the 18th green of The Reserve Vineyards and Golf Club in Aloha after winning the tournament paired with his good friend Scott McCarron.

On Tuesday, as he prepared to play a practice round in Vancouver, British Columbia, before this week's Tour event, he voiced disappointment and the hope that something can be done so he can defend his championship next year.

"The community," Henninger said, "has been spoiled by having the most unique two-day event on the planet."


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