MOVING FORWARD
AS SHELL’S DAYS NEAR AN END, HOUSTON’S PGA EVENT HUNTS FOR A NEW TITLE SPONSOR
As Shell’s sponsorship ends, what lies ahead for Houston’s annual PGA Tour event?
Steve Timms, a taciturn man by nature, neither appears nor sounds worried. For the record, he insists he isn’t worried. But until the Houston Golf Association finds a sponsor for the city’s long-running PGA Tour stop to replace departing Shell, the HGA’s President/CEO and the tournament’s director reserves the right to become worried, if necessary.
Because, until you have a deal, you don’t have a deal.
A week from Sunday night, when the 26th Shell Houston Open’s final putt disappears into the cup, what had been the third-longest corporate partnership on the Tour — only Honda and AT&T have been around longer — will be over. And anybody who was around the event during the dozen years before Shell rescued it from possible demise can’t help but be antsy. A beer (Michelob), a soft drink (Coca-Cola) and an insurance group (Independent Insurance Agents) all tacked their names on the tournament back in the day but didn’t stick around long. Of course, even Shell originally committed for only three years, a fact that heartens Timms in his quest for a replacement today. Although he didn’t come aboard in his dual HGA/SHO roles until January 2001, he’s well aware of the stormy period a decade earlier. Literally stormy, in fact. What would be the last Independent Insurance Agents Open got drowned out in April and had to regroup for a one-off fall
reboot, which ultimately turned into a celebration because Shell, by then, had stepped to the table.
“Imagine if Shell had come to us in 1992, after the tournament had been through all that change, and said, ‘Here’s the deal. We’re going to sign up and we’re going to give you 26 years.’ We’d have had some kind of celebration. It’s natural to be a little bit nervous right now, but you have to maintain your confidence in your property, in what you’ve been able to build over 71 years.”
‘A lot of brand equity’
The modern Houston Open launched in 1946, making it the 10th oldest tournament on the PGA Tour today.
“Our event has a lot of brand equity,” Timms said. “We feel confident somebody is going to want to attach their name to it. We’ve got a lot of the city engaged in the process (of finding a new sponsor). Even Mayor (Sylvester) Turner has stepped up and offered his assistance.”
As a Fortune Global 500 company with its North American headquarters in Houston and given its longtime affiliation with the sport — Shell’s Wonderful World of Golf aired from 1962 through 1970 and again from 1994 through 2003 — the Anglo-Dutch oil giant couldn’t have been a more ideal fit as the sponsor of the Houston Open. Those factors go a long way toward explaining the stability and longevity of its relationship with the HGA.
But, Timms pointed out, “Everything is cyclical in business. Things run their course.”
Based in the Netherlands, Shell has been going through the painful process of laying off 10,000
employees because of the depressed price of oil and the streamlining that came along with acquiring BG Group for $50 billion. While the sum required to keep putting Shell’s name on a PGA Tour event — somewhere north of $10 million — is obviously peanuts by comparison, Timms concedes “the optics” of continuing became problematic.
The challenge for him and the HGA now is find a similarly strong and suitable backer, preferably one based in Greater Houston. Twenty-four local firms currently make the cut as Fortune 500 companies — that’s third among U.S. metro areas — but a majority of them are oil-and-gas centric, so the industry-wide doldrums are
complicating the search.
In a perfect world, the particulars of the new sponsorship arrangement would be unveiled a week from Monday, as soon as Shell has formally signed off. Even with a done deal, the HGA wouldn’t have wanted to take attention away from Shell’s last hurrah. But, again, the point was moot.
“We’ve had a lot of activity, a lot of conversations,” Timms said, “but we don’t have anything that’s imminent to announce. I’d like to be able to say definitely what the timetable would be. We’re working hard to get it done and we’re confident we will get it done. But these things typically take a while to put together and, remember, we haven’t had to do this for 26 years.”
Local is optimal
Staying local is the HGA’s best course because of a different set of optics. The tournament, Timms points out, gets seen in more than 200 countries and a billion households thanks to TV. That’s great advertising for Houston, meaning a Houston company profits additionally from the exposure. The annual exposure. “We all know how important it is for the Final Four and the Super Bowl to come to our community on a regular basis,” he said. “But we bring our event to town every year, putting the spotlight on the city every year. That’s a big deal. We’re a big-time sports city and the golf tournament contributes a lot to that.”
For the last decade the SHO has been the lead-in to the Masters, making it easier to attract the A-list talent. Although several of the Tour’s lesser lights won in recent springs — Phil Mickelson in 2011 was the last winner of a major title to prevail here — No. 1-ranked Dustin Johnson and No. 5-ranked Henrik Stenson finished third and second, respectively, behind Jim Herman last spring.
Johnson, Stenson and the Houston loyalist Mickelson as well as No. 6 Jordan Spieth, who lost in a three-way playoff on the final Sunday in 2015, No. 8 Adam Scott, a former champion, and No. 9 Rickie Fowler have all committed to return. As a first-rate event with an immaculately groomed course set up to incorporate many of Augusta National’s subtle nuances, the Houston Open seemingly wouldn’t be in any danger of disappearing. But …
“The fact that we’ve got this rich history of golf in Houston is why it’s important for it to continue,” Timms said, “and we certainly plan for it to continue. The Houston Golf Association remains steadfast in furthering the goals of our charitable programs and the impact this tournament will continue to have on our great city.”
Economic impact felt
River Oaks Country Club made sure Houston would remain one of just 12 ATP World Tour sites left in the U.S. when four of its members stepped up and bought the U.S. Men’s Clay Court Championships from the United States Tennis Association. PGA Tour events, however, have a lot more moving parts and are a lot more expensive. Consider, for example, the difference in prize money: $535,000 for the Clay Courts vs. $7.1 million for the SHO.
Among the regular PGA tournaments, Houston’s payout ranks near the top. It’s also got a special cache because of its enduring Shell brand. If you follow golf even casually, you’ve heard of the Shell Houston Open. That branding goes away no matter who steps up next.
“I love talking about the Shell Houston Open,” said Herman, who became a firsttime PGA Tour winner when he bested the big guns Stenson and Johnson not quite 12 months ago. “I’m really sorry (the name) is going away. It’s very sad to see Shell leave. It’s been tied into Houston for a long time. But the golf world needs Houston. There’s no reason there shouldn’t be a Tour stop in Houston.”
It’s unthinkable, frankly, when you consider the tournament is said to have a direct Houston-area economic jolt of $25 million-plus each spring and, through The First Tee program, impacts some 290,000 children in the region. The First Tee’s Houston chapter is involved with 400 public school across the city and the suburbs, making it the single largest chapter in a world-wide network founded to teach life skills to kids through golf.
During the Shell era, the tournament has raised in excess of $60 million for local charities and youth programs. To be sure, that’s a major talking point when Timms goes knocking on corporate doors, and these days he’s knocking on every one he can find. Shell revealed its intentions to pull out in June, some 10 months ago. The clock is ticking.
“We’ve had the good fortune of having a strong golf association and a great board with great partners,” he said. “But golf tournaments are big investments and big productions. This is big-time sports. The main thing for us right now, obviously, is getting the sponsorship settled. It’s our top priority.”