Race To Dubai Slowing Down?

Filed in archive Golf News on December 7, 2008

More signs of the times point to an ominous future for Professional golf tours around the world in 2009.

This past week, Honda announced its withdrawal from Formula One auto racing. The company's team budget ran at more than 290 million dollars per season.

Honda simply can't afford to continue spending that money when its car sales are being slammed around the world.

Other car makers with F1 teams can't be far behind; in fact, there are strong rumors that Renault will abandon the sport.

More than 1 and a half billion dollars is spent in Formula One each year and, as FIA president Max Mosley said, it's not sustainable.

Now, what does this mean for professional golf?

Simply this: F1 races draw a television audience of well over a billion viewers per season (granted, that includes repeat viewers). Team sponsors are truly global companies with operations worldwide and they're willing to spend the enormous money charged by the teams to put their corporate logos on the cars.

With a TV audience that big, it pays to shell out the huge money.

Golf tours DO NOT draw a fraction of that globally.

It's simple economics. If car makers are beginning to abandon autosports, sponsors are right behind them. And since golf isn't anywhere near as popular globally, do you really think tournament sponsors are going to stick around?

Now let's take a look at what could happen to one tour in particular - the European PGA Tour.

When the world was awash in money, during the final, heady days of a global stock market and real estate boom, Dubai was raking it in and spending it lavishly.

It became a magnet for the rich and even more money flowed in. Of course, when a region has that kind of wealth, it begins to indulge in some fun and so, Dubai began to throw money at various sports.

Golf was high on its list and Tiger Woods was paid an enormous fee to design his first of several courses there.

Dubai pushed harder and wooed the European PGA Tour to actually move its headquarters to the Emirate (last time I checked, Dubai was not part of Europe).

The carrot, of course. was a huge purse to fund the Race To Dubai, the Euro Tour's answer to the FedEx Cup - whose days are likely numbered, too.

A season-long tournament with a total value of some 10 million dollars.

But wait - what's happening now in Dubai? The real estate bubble has burst, tight global credit is bringing the Emirate's massive construction projects to a halt. Oil revenue, which admittedly is not a big part of Dubai's wealth, has shrunk drastically with falling oil prices.

Worst of all for Dubai, which relies on its massive transportation and port ownership around the world, global trade is drying up.

This spells, I predict, a much cheaper Race To Dubai with tournament purses smaller than anticipated. And that doesn't account for tournaments that will go by the board, either.

Can you say "re-trench"?