Question

Carolyn Bivens: Change Agent at the Ladies Professional Golf Association

In 2005 when Carolyn Bivens became commissioner of the Ladies Professional Golf Association (LPGA), she was surprised to learn that 70 percent of tournaments were losing money. Many of these events hardly compensated the tour for its support. She also inherited unsigned contracts and different financial practices for different tournaments. She was also shocked to see the differences between the PGA and LPGA. At many events, women passed on the smaller women’s locker rooms and instead used the more spacious men’s locker rooms, where pots of geraniums sometimes disguised urinals. The difference between winning a PGA event and an LPGA event often approached $1 million.

Having a deficit was not an option that Bivens could live with. She moved quickly and unilaterally, bluntly telling tournament owners that they needed to pay for services rendered. In some cases, fees were raised from $15,000 to $100,000. Tournament sponsors balked at the increase and some left, including Corning Glass, which had been a sponsor of the Corning Glass tournament for more than 31 years, and McDonald’s. Corning Classic’s sponsorship dollars had declined more than 20 percent and Corning’s board chairman, Jack Benjamin, said, “We want to be part of the LPGA, but I want to make sure that everybody understands this—if the revenue side of the ledger does not match with the expense side—we cannot support the LPGA.” Even long-time partner Anheuser-Busch, sponsor of the Michelob Ultra Classic, started rethinking its sponsorship.

Bivens was described as the proverbial bull in a china shop, causing controversy since she replaced Charlie Mechem, whom players called affectively “Uncle Charlie.” Bivens maintained a vision that she could make the LPGA a model for 21st-century sports organizations. To keep the LPGA on solid financial footing, after looking at each event’s profit and losses and severing ties with long-time sponsors, she found new sponsors that were willing to pay bigger purses. For example, she secured Ginn as a sponsor for two new LPGA events and touted the real estate developer as a new partner who could offer the bigger purses that her players deserved. She even moved some long-standing tournament dates around to satisfy Ginn, causing certain long-time sponsors to question her judgment. Unfortunately, when the real estate market crashed in 2008 and 2009, Ginn foreclosed on its tournament commitments. Bivens also battled the media over control of image rights, and imposed an English-proficiency policy for the tour’s international players. She took the latter action to make the tour and its players more marketable. This action caused such an uproar that she had to rescind the policy.

She landed a 10-year deal with the Golf Channel that was worth between $3 and $4 million a year depending on the tour’s ability to get TV sponsors. Historically, the LPGA had jumped among channels, on network and cable, making it difficult to develop a fan following. She worked on improving the meager LPGA pension plan. At that time, the LPGA had no medical benefits for its members. Bivens aimed to leverage the LPGA brand by going international. She signed a 5-year broadcasting-rights tour exclusive contract with J. Golf, a South Korean TV company, for more than $4 million dollars a year. This was a major feat during the recession of 2009 when most companies dramatically cut sports marketing programs. In 2009, she traveled to India, Abu Dhabi, and Dubai to determine interest in those countries. She stated that players would have to adjust to a globetrotting schedule if that’s what it took to make the tour financially viable.

For the most part, at that time, the LPGA did not own its events. Rather, it extended contracts to third parties to host them. But in 2010, the LPGA finally established ownership of a major championship, the LPGA Championship. Unfortunately, McDonald’s then ended its sponsorship of that event and many began questioning the LPGA’s ability to raise more than $3 million to stage it. The loss of local sponsors and rising operating costs was taking a toll on LPGA tour events as well. The title sponsorship of a regular PGA tour event, such as the HP Byron Nelson or Shell Houston Open, costs $6 to $8 million annually (including a TV commitment of $3 million). Sixty-eight percent of the LPGA’s future tour events did not have sponsors, which meant that the tour’s schedule was cloaked with uncertainty. In fact, Bivens acknowledged that it was “high risk and high reward” time for the LPGA.

Adding to the LPGA’s challenge was a backlash against golf sponsorships in general at that time due to the economy. Bivens knew that companies still wanted the business opportunities that tournaments created, but with less fanfare and spectacle to avoid public backlash. At the 2009 Michelob Ultra Open at Kingsmill, Virginia, for example, Anheuser-Busch cancelled its annual champions’ dinner, which mingled past champions with Anheuser-Busch executives, because InBev, the Belgian brewer that now owns Anheuser-Busch, thought that such an expense was not needed. Even so, Bivens believed that the LPGA’s hospitality benefits would save the LPGA. The networking that occurred in the Wednesday pro-amateur rounds could not be duplicated anywhere else. “The fact that a sponsor can spend five hours with its biggest three or four customers away from the office is something that money can’t buy,” she says. The LPGA pro-ams are played in a scramble format, ensuring participants the opportunity to share their experience with their LPGA hosts. Because of these issues, in July 2009 Bivens resigned her position as commissioner of the LPGA.

Questions

• Q1: Which forces did Bivens face that supported change and which resisted change? support change:(Technology, globalization, generational differences, social networks)
• Q2: Did she use an economic or an organizational development approach to create change? Was it effective?

Answer 1

Answer 1=

The different factors that could support the changes are stated below=

Economic forces= the financial position of LPGA really provided the base for the changes to be imposed in the organization. There was not enough fund generation in the organization for the sponsors and the players.

Globalization= She was having the belief that she will be able to convert PGA as the 21st-century sports organization. She was having the input that globalization is the actual force at present and money will be needed to compete at the global level. She made various policies to trade the players at the international level.

Generation difference= She did not belong to the generation of baby boomers in which there was a lot of difference between males and females. When a lot of difference was identified by her between PGA and LPGA, then she decided to bring LPGA at the same level of PGA.

The different factors that resisted the change-

Habit=Before joining the LPGA, Charlie Malcolm was working as the commissioner who was a very loving personality and often termed as Uncle Charlie. The entire tournament was based on the family relationship and loyalty, This culture was in focus to be changed.

Fear of the unknown : As there was no surety about the probable revenue generation from LPGA, so most of the sponsors were resisting against the launch of LPGA.

Poor economy= there was a lot of resistance due to the poor economic situation between 2007 to 2009 and this resulted in the foreclosing of many pretournament commitments.

Answer 2= If we look at the given facts, it is evident that all the decisions were driven by economic factors. She wanted to have greater sponsorship for LPGA and to make it an international championship, ensuring greater financial benefits to the players and sponsors. The effectiveness of these changes was not so good as in some cases , there were a success but overall the goals and objectives were not fully achieved.