JOHN MCHENRY: European Tour taking a big risk with Rolex Series strategy

In launching the Rolex Series, the European Tour needs to be very careful not to arouse the commercial juggernaut that is the PGA Tour, writes John McHenry.

The commencement of the Dubai Duty Free Irish Open at the beautiful Portstewart Golf Club this morning marks yet another significant milestone for the European Tour’s Chief Executive Keith Pelley.

As someone whose core philosophy is that, first and foremost, the European Tour is a golf entertainment content company, Pelley has not been shy to experiment in a world where time generally passes slowly by.

With the European Tour as his platform, he has already been credited for introducing some new short format golf and digital content initiatives in the hope that it could do for golf what Twenty20 has done for cricket’s popularity (broadening golf’s reach to a new generation) while also trying to stay true to the Tour’s overriding ambition, that of increasing its profile and competitiveness — all in an effort to support greater initiatives from corporate sponsors, keen to see the world’s best players playing more regularly on the European Tour.

Late last year Pelley made an ambitious statement with the formation of a tournament schedule of seven events called “The Rolex Series”. This week’s Dubai Duty Free Irish Open is one, along with the recently played BMW PGA Championship, next week’s Scottish Open, the Italian Open as well as the three Final Series events — the Turkish Airlines Open, the Nedbank Golf Challenge and the season-ending DP World Tour Championship. Each purse has a very competitive (PGA Tour) minimum prize fund of $7 million (€6.17m).

As brilliant as this European Tour initiative sounds - the fact that many of these tournaments will have to be subsidised by an organisation that made a £7.8m (€8.8m) loss in its last submitted accounts in 2015 (and is forecasting further losses in 2016 and 2017), it represents a huge gamble for a Tour with limited reserves. And for one of its oldest and most influential sponsors Rolex.

At a time when the vastly wealthier PGA Tour is already flexing its muscles worldwide, it begs the question as to whether it is wise for the European Tour to take such a colossal commercial punt on so few events? By categorising tournaments and creating a platform that generates more money at the elite level, doesn’t the Tour run the risk of alienating other long-term sponsors who are not the beneficiaries of third-party subsidies? Shouldn’t the Tour be supporting the broader European Tour as a whole? And what cast-iron commitments has Pelley received from his star players in terms of continued support and participation in a Rolex Series that has no overall narrative or grand prize to knit the tournaments together?

How long can the European Tour prioritise and subsidise financial inducements (tournament purses) to leading players for participation, when they are already aware that the market values of the Rolex tournaments in question aren’t as high as the purse they aspire to achieve. Looking further down the road, declining viewership numbers and use of pay-per-view services worldwide are most likely going to have a profoundly negative impact on the revenues the European Tour is capable of generating from future broadcasting rights?

Should the European Tour not be spending its reserves more wisely — by exploring younger alternative forms of consumption such as Twitter or Facebook live streams so that they can better understand how their commercial circumstances are changing and actively set about addressing the problem going forward?

In launching the Rolex Series, the European Tour needs to be very careful not to arouse the commercial juggernaut that is the PGA Tour. With an office already opened in London, courting media rights and sponsorship and their proposal to relocate the USPGA Championship back to a May date, the PGA have already shown that they will not readily accept the European Tour compromising their ambitions or profitability.

This week, it is hard to gauge the level of influence that the “Rolex Series” tag has had on the Dubai Duty Free Irish Open but no one can argue with the prize fund or the pedigree of the field. We can credit the Tour for the date change which allows the players to play links golf right through the Open Championship, but no one should underestimate Rory McIlroy’s influence in attracting the best players to Ireland.

The great success of the Irish Open in recent years, quite apart from Rory’s Foundation and the wonderful support from Dubai Duty Free, has been as much about the participating players as it is about the local community fully supporting the event. I have no doubt that anyone coming to support the event will witness great golf and the very best of Northern Irish hospitality.

From a participation perspective, the Irish have an awful lot to play for. With leading lights like Pádraig Harrington, Darren Clarke and Paul McGinley very much in the twilight of their careers, there is the motivation of a home crowd to spur them on to one last great performance. For Graeme McDowell and Shane Lowry, there is the opportunity to finally start stringing some consistent performances together in what is the most lucrative tournament stretch of the year.

Paul Dunne, after his brilliant finish in France last week, will view this week’s Irish Open as a great chance to win his first professional tournament or at the very worst to further establish his credentials in an already impressive professional career. But for the host and defending champion Rory McIlroy, this week represents the opportunity to demonstrate his competitiveness, as he needs a major step-up in form if he is to challenge for further major championship honours over the coming weeks.

With a strong international field and a great golf course, nothing competitively will be easy for the players this week. A victory earned is the way it should be for one of the most prestigious titles on the European Tour.

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