BONUS: PGA Tour CEO Brian Rolapp Ends Talks of LIV Golf Tie-Up

0:00Scarlet Fu:As industries evolve faster than ever, companies need an environment that accelerates strategic growth, and Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance. With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan. Pure opportunity. Seize your opportunity at michiganbusiness.org. Bloomberg Audio Studios. Podcasts. Radio. News.

0:44Scarlet Fu:Bloomberg Money is about making and investing your money, but it's also about spending it. And a lot of people like spending it on golf, both watching and playing it. professional golf only caught the attention of golfers for decades but over the last five years it's become kind of a soap opera bloomberg senior business of sports reporter randall williams joins us now and randall i go to the idea that for people in the u.s professional golf was equal to the pga tour but then you had live golf which was funded by the saudi arabians popping up as a competitor and then at some point the two decided on a merger but then i don't think anything happened?

1:17Scarlet Fu:What's the latest or what has happened? Well, it's been on an indefinite pause, but the PGA Tour has evolved since then. Of course, Live Golf entered. It caused a lot of chaos. But then you had the Strategic Sports Group. That's backed by Fenway Sports Group. It's backed by Steve Cohen, who's the Mets owner. And then you have Arthur Blank, who's the Falcons owner. Them and a lot more people put up to$3 billion into the PGA Tour, which created a for-profit arm called the PGA Tour enterprises. Since then, the PGA Tour has been slowly trying to, I'd say, recalibrate itself to get on the right track, to evolve, to fill in some of the holes that maybe live golf exposed.

1:54Scarlet Fu:What were some of the holes that live golf exposed? Because golf had a bit of a renaissance during the pandemic. Up until that point, a lot of people criticized it for being hard, elitist, expensive, but then golf like found itself during the pandemic. Well, I'd say that golf is very a traditionalist sport. And so with tradition, there's always tradition versus innovation. And so, of course, you had some people complaining about player pay. You had people complaining about the tournament schedule. And so now we have a bunch of innovations that are happening in regards to the system of golf. There's going to be a championship series and a challenger series.

2:28And that's how the changes have come. What do you see TV doing here? I mean, the Masters is iconic and all that. But in terms of the entertainment TV streaming battle, Are there going to be a huge bidding war from where you sit? I think so. I think we're a couple years away from that. But media rights are, of course, a huge part of the sports business. And if you're not in the media rights business, then your sport probably isn't going to last very long. And the PGA Tour is still the dominant presence in golf. I think the threat of live came from the Saudis who had seemingly limitless pockets.

2:56Now that that is not in existence anymore, the PGA Tour is, again, once again, the dominant franchise that I think broadcasters are going to be bidding on.

3:04Scarlet Fu:Yeah, with Saudi Arabia pulling its funding from that other golf league. Thank you so much. Bloomberg Senior Business of Sports reporter Randall Williams. Joining us now, I'm pleased to say, is the CEO, the new CEO of the PGA Tour, Brian Rollup. Brian, great to see you here. Great to see you. So we just talked about how golf is for the traditionalists. A lot of people like to say it's the sport most like life because it's hard, but it's also kind of elitist and kind of expensive. Coming from the NFL, do you see those as features to be protected or barriers to growth that should be challenged? Well, I think any sport, professional sport, that's worth its salt will always sort of challenge where it is.

3:43And I think there's one thing I learned at the NFL over two decades is, you know, if you're not going forwards, you're going backwards, and innovation matters. So when I first took the job, I was very clear that we're going to honor tradition, but we're not going to be overly bound by it. And you look at some of the trends of the game of golf, while, as you say, maybe it has this reputation as elitist. if you look at the growth since COVID, participation in golf in this country has grown 39 % since COVID. Now, you don't have to play a sport to watch it on television, but sure helps. Half of that growth is under the age of 35.

4:14The average age of a professional tour telecast, inclusive for the majors, is 66 years old. So there is a disconnect between where the sport is going and what professionals have been able to do. We are closing that gap in significant ways. And if you just close that gap to a minimum, you've got a bit of a rocket ship.

4:28Scarlet Fu:You've talked about how Live Golf helped expose some of the weaknesses of the tour. Was the biggest lessons about the economics of professional golf or about the product itself? I think it's the product. I think, listen, there's something about the sports industry I don't understand if you look at the history. Huge innovation usually doesn't happen without a crisis. It could be a labor dispute with a collective bargaining agreement. Back in my old job, the USFL, the AFL-NFL, when I looked at this opportunity, I just saw the AFL-NFL, which essentially created a lot of systemic changes in professional football that started to accelerate the growth.

5:02I think we've had that moment here. So I think the lot of perhaps shortcomings in professional golf came with a little bit of competition. We're all Americans, competition's a good thing. So I think we've seen that and we're trying to build something that outlives all of us here. What did you learn from Pete Rozelle? I mean, it was before your time. If we say Pete Rozelle invented all of this, really best practices as well. If you're the Pete Rozelle of golf, what do you need to do to really jump start it? It's a really good question. Pete Rozelle, I think one thing he got, I mean, he was 34 years old when he did a good job.

5:35I don't think people realize that. But he was the first one who figured out media, I think, when it came to NFL. So the modern media model that I think you see in the NFL that I was part of, but then I think other sports have adopted, is if you get your media model right, you can build the sport. So when he started working in the NFL, it was probably the third most popular sport in the country behind professional baseball and college football. But because of a reach model using network television, he built the sport and told the stories. And so I think that's one thing I've learned is how, you know, we're concentrating, how do you increase the reach of the PGA Tour, and how do you tell more stories about the athletes who play it?

6:10Okay, so you got Arnie from Altoona, Pennsylvania, coming up the course, lighting it up decades, decades, decades ago. I was at Rochester in 1968 when Lee Trevino turned your sport upside down. Who's your new Lee Trevino? Well, listen, I think we have a lot of stars. I think there's a misconception about professional golf that a given competition or a given tournament only matters if one or two golfers are in it. When you actually look at professional golf, the difference in winning a tournament and losing a tournament is one stroke over four days. That type of competitive parity, it's that tight.

6:46The only other place I've seen that is in professional football. So the reality is, is we have a collection of some pretty amazing golfers. Whether you take the established guys like Scotty Scheffler and Rory McIlroy, or you look at the Koivin kid who's just coming out of Auburn and some of these younger guys who were just really performing well, I think we have an amazing roster of veterans and young guys who are really, really competitive. It's our job to actually showcase them better.

7:12Scarlet Fu:Randall was talking to us about the PGA Tour Enterprises, this commercial arm. Of course, FIFA wanted to follow the tour's lead and spin off its own business and seek outside investors. that ended up failing. I'm curious to hear more about the PGA Tour Enterprises and the role of it in the PGA Tour overall. Is this something that the players feel and experience? Is this something that the fans feel and experience? Yeah, I think the answer is both of them will. I think the players experience it. What PGA Tour Enterprises has allowed us to do is to evolve the PGA Tour where most professional sports have gotten.

7:45We've actually capitalized it and turned it into a commercial business. And the strength of that commercial business funds innovation. It funds player purses. It funds everything. I think the PGA Tour was locked in a bit of a legacy governance model. Now that the mission is clear, now that we're capitalized, we can do that. So I think the players will feel it in that you look at the new competitive model that we've announced. There's healthy purses across the board, and they can actually earn equity in the tour. This is the only professional tour of scale that I can think of. Players can actually earn equity, which is a huge opportunity and also aligns investors management and players like no other sport in the world i think the fans will feel it because of that commercial change to the tour we have investment dollars to make the fan experience better to make the competitive product better to make the media product better so i think that is and i think that's one thing that came out of this this this this live competition crisis is we got focused we got capitalized now we know what the mission is and i think fans and players are going to win because what are you personally you can do about slow play?

8:47There's no other, I mean, Meredith Whitney was just on with us and she's standing on the golf course lining up a five-foot putt for 20 minutes. Yeah. And the answer is slow, I mean, the retires, we do personal finance, retirement, wealth management. Everybody in retirement wants to play your sport four days a week, but they can't because of stupid slow play. What do you do? Well, I don't, I don't stay up at night worrying about slow play among amateurs at their country club. I actually don't care about that. I only, when I think about the PGA Tour or professional golf, I think it depends when we're talking about who you're talking to when you're talking about slow play on a Thursday or Friday round before the cut when we have 144 players and it's early in the year and we're racing against daylight to keep this on television we need to speak it up when you're talking about a Sunday round or a playoff and someone's taking extra time to line up a shot because it's the shot of their life that's different so I think context matters here I also think it's about how we produce the sport So if you're watching on television and somebody is actually standing over a putt a little longer, there's a thousand other shots going on on the golf course.

9:50It's our job and our broadcast partners produce it better. I come from the NFL where we produce the Red Zone Channel. The Red Zone Channel moved around. The fact of the matter is half the time when you go in to look at a Cleveland game, it's not live. It already happened. Pull it back. I think we can produce it better and actually tell a better story. So it's a complex issue, but I'm not really focused on your local club. That's the local club's problem. I'm really focused on the PGA Tour. Can you do a red zone version of the PGA Tour? I think we could. I think we're talking about a lot of innovation.

10:16But if you think about how golf is produced already, it is a little bit of a red zone. Here's Scarlett on the 18th green. Let's take a look. Let's go over here. I've got to ask, do you need a hydration break? I mean, please, tell me. If the ninth hole, a hydration break was a Jenny Kremel. But that's a story here. What are you going to do about a hydration break to bring in a marginal million? Well, no comment on that. Ask the FIFA guys on that. I don't have a view on that.

10:40Scarlet Fu:Well, having said that, I mean, I'm sure you watched the World Cup. Are there any learnings from the World Cup, the spectacle that was the World Cup, that you can apply to pro golf? I just think, in general, I think the World Cup or what we're doing, what other sports are doing, it's a reminder that the value of sports is increasing. In a world that is continually fragmented, whether it's by media, so much competition for your attention, There's a handful of things that are standing out that can aggregate tens of millions of people at one time doing one thing. And I think it's sports and maybe some news.

11:15So I think that is encouraging if you're in the sports business. Now, you know, it doesn't mean you can rest on your laurels. It means you need to innovate and keep up with the changing demographics of the sports fan. But I think if the World Cup or anything has taught us is that sports is a pretty strong investment class.

11:31Scarlet Fu:Okay, when you innovate, especially when it comes to media distribution, you get to the point where fans are left confused. We have a Bloomberg News story about how sports fans are looking at$2 ,000 streaming bills in order to follow their favorite team. Has it gone too far to the point where fans will start rebelling and it won't work anymore and we have to kind of rethink this? Well, if fans are rebelling in sports, we haven't seen it yet. But I think the larger question is, while I'm a big believer that in order to build a sport in the value proposition of sports and media is reach. How many people can you reach?

12:03How can you aggregate audiences? That is still true. Pete Roselle got that right. That is still the case. The difference is reach is much more complicated because of where the media world is. I got to slip this in. You have a gift. He's at Florida State. I think he's 14. I don't think he can drive a car. Miles Russell? Okay. What do you do with a property like Miles Russell, who's 15, I think 15, 16 years old? Well, I think what you're going to see is when we announce our new competitive model, which if you study what we've done is we've opened up the meritocracy of the PGA Tour. We've created a championship series, which is the top 23 events or so, where the top 120 golfers are going to compete together week in and week out.

12:41They can't play down into the Challenger Series, which is for everybody else. They will compete for a regular season title that will be the most prestigious thing in golf. There will also be promotion relegation. So at the end of that, you're going to be relegated down. My point is we've opened up the meritocracy. So if he's that good, we have now created a system where he will work his way in to be into the top. No more sponsor exemptions, no more other stuff that hit in the meritocracy. Where you play is based on how you earned it in the play. So I think that's important.

13:12Scarlet Fu:Brian, at some point, LeBron James will have a lot of free time. And we know that he's been playing a lot of golf. And he is an investor in PGA Tour Enterprises. Have you talked to Mr. James about some kind of role for him in professional golf? I don't know, some kind of ambassadorial role? No, I haven't. But I think LeBron James is an example of the growth of the sport. Like when people get the bug, they get the bug. And it's a great competitive sport to play but also to watch. And so we'd love LeBron to be more involved. We'd love everyone to be more involved. And I think you're going to see more of that over time.

13:46Scarlet Fu:Brian, thank you so much for your time today. Thank you. Great to have you in with us. Brian Rollup, the new CEO of the PGA Tour. Can you see LeBron in a sand trap and nobody else can see the T? Sure. And he's just looking right over and he can see the T. In those steep bunkers on the Lynx course, he can see over. Yeah, it's an advantage. It would be very cool to see the Lynx. That would make a very interesting red zone version of PGA Tour if you put that all together. When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges.

14:20At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation. Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut.