By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
(Golf Digest's decision to publish a series of articles critical of Beman wound up underscoring the commissioner's power. The magazine ran two Senior PGA tournaments itself. After the unflattering stories were published, the Tour decided to cancel one of the tournaments and reschedule the other for a date that would doom it. The magazine had to fight vigorously to keep its tournaments.)
Bad press, though, was not the Tour's biggest worry in 1994. The Federal Trade Commission was investigating the Tour for unfair methods of competition. Specifically, federal investigators were looking at the Tour's stranglehold on players. After four years of inquiry, the FTC staff recommended that the Tour be prohibited from continuing to force players to seek Tour permission to play in non-PGA events or appear on television in non-sanctioned events.
The recommendations threatened to erode the Tour's control over its most valuable asset--the players. But the FTC never adopted the staff recommendations, and in 1995 its probe was dropped. According to a 1995 Los Angeles Times article, the FTC was flooded with letters defending the Tour. Among those writing on the Tour's behalf were 26 members of Congress, including Bob Dole, Trent Lott, and Dick Armey.
By the time the FTC probe was dropped, Beman had stepped down as PGA commissioner. Beman's replacement was his top deputy, Timothy Finchem. Before joining the Tour in 1989, Finchem had been a Washington insider, serving as an assistant advisor on economic affairs to President Jimmy Carter, and as finance director for the campaigns of both Carter and Walter Mondale. Finchem's ascendancy promised to continue the lucrative times that began with Beman.
By 1995, the new commissioner was already well known to Frank Mitchell. To this day, Mitchell is trying in his lawsuits to show that Finchem was part and parcel of the Tour's effort to bankrupt Sportsband and steal Mitchell's idea. (The Observer's efforts to reach Finchem resulted in return phone calls from Tour public relations man John Morris.)
At first, Frank Mitchell recalls, the Tour seemed happy to welcome Sportsband into the family. Mitchell and Rice pitched their idea to the Tour in 1986, and quickly won permission to conduct a limited test of their on-course radio idea.
Mitchell and Rice formally incorporated Sportsband and began pouring their own money into the company. The company had to secure licenses from the Federal Communications Commission, and that meant hiring lawyers who knew their way through the federal regulatory maze. Equipment had to be tested and refined and announcers found to call the play-by-play.
In December 1996, Sportsband conducted its first test run at the J.C. Penney Classic in Tampa. Few spectators probably even knew it was happening. Mitchell and a few others wandered the course listening to little radios, checking out how Sportsband's signal would carry across the rolling terrain of a golf course.
The trial run seemed to impress everyone. The Tour and Sportsband entered into negotiations over a contract that would grant the company radio rights at PGA events for the next 10 years.
But in summer 1987, the Tour decided it wanted to see more tests. Mitchell says some of the players on the Tour's policy board were unsettled by the notion of scores of fans listening to little radios. Noise from the radios might distract players, or radio-equipped fans at one hole might react to something happening elsewhere on the course by erupting into noise at an inopportune time.
Sportsband agreed to conduct three trial broadcasts in 1987 at the Southern Open, the Tucson Open, and again at the Penney Classic. Mitchell says he and Rice had to dig up the money to pay for the tests, since there was no income yet from advertisers or sponsors. "We loaded up for bear," Mitchell says.
For the three 1987 tests, Sportsband brought in 10,000 little radios and tried to produce a full-blown version of the broadcasts it envisioned. Fans were given radios and asked to evaluate the broadcasts. Everyone seemed to love the idea, and the Tour's policy board agreed to resume negotiating Sportsband's exclusive contract. The Tour and Sportsband ultimately signed a five-year deal in July 1988.
"I thought it was a quality broadcast. I thought it was well done," PGA Commissioner Tim Finchem would later testify in a deposition.
Under the contract, Sportsband agreed to pay the Tour a minimum of $120,000 a year to broadcast at up to 12 tournaments, and $10,000 more for each additional tournament. The Tour would receive a cut of the profits, and the Tour's take would go up after Sportsband had recovered its start-up costs.
"We treated Frank right from the beginning," a Tour official would later say in a deposition. "We decided we'd treat him like part of the family, like we treat any of our other corporate partners.
"I think we have a reputation of bringing people into the family and making them feel like part of the family, and going the extra nine yards to make it work, and that was exactly what we did here."
Well, not exactly, as Mitchell sees it now.
The real money to be made off of Sportsband's idea would not come from renting out little radios. Sponsorships and advertising were the potential pots of gold. Mitchell and Rice had originally figured that they would go out and sell the advertising, but Mitchell says the Tour decided it wanted in on the action.