Tuesday, January 26, 2010

Tim Maitland's Interview with HSBC's Giles Morgan

Return of the Champions!
Tim Maitland

The world's top female golfers return to Singapore this February for the third edition of the HSBC Women's Champions. Following on from the success of its brother event in Shanghai, which become Asia's first World Golf Championship event last November, the world's local bank can claim to have created two of the most significant professional tournaments in golf's most vibrant region, according to Giles Morgan, HSBC Group Head of Sponsorship.

Q: There's more bad news than good for golf when it comes to sponsors at the moment, but with the HSBC Champions becoming a WGC tournament, Phil Mickelson winning in Shanghai and almost all of the top women players committed to Singapore again, you seem to be one of the few sponsors who are buoyant. Why is that?

A: HSBC believes that sponsorship is a very powerful investment to develop our business and brand internationally and around the world. Within our golf portfolio in Asia over the last three or four years we've seen a significant development of our business and our brand through our golf sponsorships, so something that we believe very strongly is that prudent sponsorship, targeted sponsorship--where we have very clear objectives and very clear measurement of those objectives--can be of benefit to our business.

Q: When you announced WGC status and increased the prize money by US$2 million, it was going against the trend of the overall market. Now it must look like a wise decision, doesn't it?

A: It was the investment that was required to bring a World Golf Championship to China and to Asia, in terms of the prize fund required to be a World Golf Championship and also the fund needed to become a major, major golf tournament--it's one of the top 10 tournaments in the world--and therefore required a certain level of investment that needed to be made. That coupled with the fact that we are the biggest international bank in Asia and this is the biggest golf tournament in Asia, was a very logical business partnership to make. While it required a significant investment, we do believe it paid off.

Q: Is that what your measurement of the sponsorship is showing?

A: The measurement for the first WGC, as a rudimentary rule of thumb, is that we’ve pretty much doubled everything that we set out to achieve in terms of spectators, international media coverage and so on. We're still waiting for data from our business, which you'd expect because that takes longer to come through, but on the more traditional sponsorship metrics that companies use to evaluate success there has been a huge shift in all of those areas, particularly around the TV, both locally and internationally, the local media coverage as well as spectators coming along.

There's also the field, which as everyone knows was an astonishing field. To have the world’s number one and number two walking down the fairway in the final group on the final day really was the icing on the cake.

Q: Your sponsorships haven't been completely untouched by the economic downturn though. The prize money of the HSBC Women's Champions is down. Would you say it has been downgraded or does it still stand as the best women’s event in Asia?

A: We believe it is the best. As you've heard with some of the recent announcements of the players who will be competing, I think we're going to see a field that is virtually identical to 2009 with the additional bonus of having Michelle Wie playing, which is great for women's golf and particularly for women's golf in Asia. I think she'll be a source of inspiration to a lot of women who aspire to watching or playing the game. I think the tournament investment mirrors the economy that we are in right now. We did need to have a long, hard look at the return on investment. Women's golf is a fantastic product but doesn't enjoy quite the same level of international exposure and therefore we had to realign the investment, but it's still a very significant investment that we make within the sport. I think the event in the last week of February will be as special, if not more so, than the previous two events.

Q: So you don't think the reputation of the tournament has been affected?

A: No. The fact that we have been able to attract possibly an even better field this year is a recognition in the sport that it needed to realign and refocus its sights during what have been horrifically difficult trading conditions around the world. I'm sure the sport and women's golf is grateful to have a partnership with someone like HSBC and will look to use that as a foundation to start growing their model as the world's economies hopefully improve.

Our level of investment for the tournament, outside prize money, is the same. So there will be the same look and feel and the same quality for the spectators and TV viewers. We've reduced the prize fund, but we're still investing to give our customers and potential customers the experience that we believe women's golf can provide.

Q: Effectively the value of LPGA events went down dramatically last year because they were unlucky enough to find themselves more exposed than most to the downturn than any of the other tours. But the other tours are going to find out how the value of their events has changed as contracts come up for renewal in the next year or so, aren't they?

A: Golf is an expensive sport to sponsor and companies will have to cut back. We've certainly had to be prudent. There isn't a sport in the world that hasn't been affected by it. What is encouraging when you see the Asian spring swing coming up with our event and the Honda event is that there are still some fantastic LPGA events and there is still strength in their calendar. I have no doubt that in the next two or three years, as the world bounces back from economic meltdown, that their product is strong enough; they've got some wonderful, wonderful golfers and some wonderful talent. It'll pick up, I have no doubt, and that's why we didn't want to pull out.

Q: Do you think that the LPGA is leaner, more effective and more attractive to potential sponsors because they took so much of their punishment in one go?

A: One of the benefits of downturn and tough economic times, and this is true in life, is that people dramatically reevaluate what is important. It gets people to really focus. And I think the LPGA will be a better and stronger organization because of what they went through in 2009. They've been fantastic to deal with over the last eight or nine months. They've been incredibly understanding and that's helped us continue our partnership. It's that kind of forward thinking that will really help them and I think their partners too going forward.

Q: What are your thoughts for your other golf sponsorships in 2010?

A: I'm looking forward to 2010 very much. We've got the HSBC Women's Champions coming up and the investments in Singapore around that. The first WGC-HSBC Champions really was a great success for us and I think there's an enormous appetite from people in the golf community in and around Shanghai to see the next tournament. I was speaking to some of the players in Abu Dhabi (at the European Tour's Abu Dhabi Championship in January) and they've been saying what a magnificent tournament it was and how much they're looking forward to coming again in 2010.

One of the other exciting things is the energy and excitement that Olympic status for golf has created, particularly in China. I'm really looking forward to seeing how the HSBC China Junior Golf Program evolves this year and in the next few years. So yes, I think the future is rosy for us in our golf portfolio and in Asia.

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