Golf tradition in suburbs depends on sponsorships

The Western Open was long considered the Chicago area's premier golf tournament.

Then in 2007, it changed names.

A year later, it was played outside Illinois for the first time in 46 years.

Welcome to the changing world of professional golf.

In an era where millions of dollars are at stake, quaint tradition often gives way to marketing, television contracts and sponsorship deals.

Such is the case with the Western Open, now dubbed the BMW Championship thanks to sponsorship by the German automaker.

The PGA tournament, which will be held this year at Conway Farms Golf Club in Lake Forest, now rotates locations, landing in the Chicago area every other year. Last year, the BMW Championship was held in Colorado. Next year, Indiana will be the host.

“The BMW sponsorship and the change of locations allow us to raise our visibility and raise awareness of our tournament and support for our charity,” said Vince Pellegrino, senior vice president of tournaments for the Western Golf Association, which organizes the event and raises money for the Evan Scholars Foundation.

Other area golf tournaments face similar circumstances.

The Chicago area could lose its annual PGA senior tour event unless a new sponsor is found by late fall. Encompass Insurance, a subsidiary of Allstate Insurance in Northbrook, has ended its three-year support of the Encompass Championship at North Shore Country Club in Glenview.

Meanwhile, Kemper Lakes Golf Club will finally end a 16-year tournament drought when it hosts the KPMG Women's PGA Championship in 2018. Kemper previously hosted a PGA Championship, four Grand Slam of Golf events and six senior PGA Tour events. Its last major tournament was the LaSalle Bank Open in 2002.

In short, attracting and keeping golf tournaments and corporate sponsors can be a difficult proposition.

“Golf is very tricky when it comes to tournament sponsorship,” said Matt Balvanz, vice president of analytics for Navigate Research, a Chicago-based sports marketing consulting firm.

“It's a lot different than sponsoring other sports, where you have exposure yearlong. For one, there is not a lot of signage on a course. And the event is only one week a year. So it's a different type of sponsorship experience,” Balvanz said.

Besides rotating sponsors and tournament locations, area golf tournaments also face stiff competition from other professional sports. Given the popularity of the Bears, Cubs, Bulls and Blackhawks, corporations have a lot of choices.

“In a big market like Chicago, there is a lot of competition for sponsors,” said Mike Galeski, tournament director for the Encompass Championship. “You've got a lot of professional teams with branding, fan relationship and hospitality opportunities.”

The loss of Encompass Insurance as a sponsor has left the annual senior tournament at North Shore Country Club scrambling to find a replacement, or risk losing the event.

“We had a great run with Encompass, but now we're looking at different opportunities. In order to guarantee an event for TV, you need a title sponsor. That's what we're working on now,” Galeski said.

Once a title sponsor is in place, though, a golf tournament can set about finding sponsors for hospitality venues.

Golf tournament sponsorship opportunities focus less on heightening brand awareness and more on relationship building, said Kevin Adler, chief engagement officer at Engage Marketing, a Chicago-based brand marketing firm.

“Unless you're a title sponsor, you're not buying a golf sponsorship as a pure branding play,” Adler said. “It's a lot less about signage. Golf sponsorship is about creating engagement opportunities.”

Indeed, at the upcoming BMW Championship, crews at Conway Farms are erecting a series of hospitality venues at key points along the course. These are not simply hospitality tents but skyboxes, chalets and clubs. The venues include ground tickets, food and beverages, big-screen TVs and restrooms. The sponsorship also includes advertising space in the tournament program.

The cost for purchasing hospitality space begins at $18,800 and can rise as high as $178,000 depending upon the number of guests and the level of luxury offered by each venue.

Thus, golf sponsorship is much more focused on hosting a good party than watching each tee shot.

“It's about the experience. It's about engaging with your customers and an opportunity to build relationships,” Pellegrino said.

It's also an opportunity to make some impressive new relationships. Consider the Pro-Am event. A sponsor can buy up to three spots — for $10,000 a person — to play 18 holes with PGA professionals the day before the BMW Championship tournament begins.

“The client entertainment opportunity of the Pro-Am is unmatched. There is no other sport where there is an opportunity to play alongside a professional,” Pellegrino said.

The audience for a golf tournament also tends to be more educated and affluent, and that's reflected in the corporate sponsors. At the BMW Championship, for instance, the list of sponsors includes Discover, Bank of America, Rolex, United Airlines and Anheuser-Busch.

“The audience demographic is high income, more discretionary income, more education,” Balvanz said. “The sponsors tend to be financial service firms, insurance companies and luxury automakers.”

The final sponsorship challenge comes when the tournament tees off and television coverage begins. Commercial sponsors hope the more popular players take the lead so the audience builds, Balvanz said.

“It's a riskier play from a TV perspective. If it doesn't have Tiger Woods, Jordan Spieth or Jason Day, the ratings can go into the tank,” Balvanz said.

But overall, Balvanz is bullish on the future of golf sponsorship.

“The PGA has an affluent, educated audience. And it has some new, young stars that are attracting a younger audience,” Balvanz said. “I think it's set up to grow.”