Deals that come together this fast are as rare as three-hour rounds in majors.
The agreement between the PGA Tour and Fortinet, one of the world’s leading cyber-security companies, took less than two months to complete. It created the Fortinet Championship, being played this week at the Silverado Resort in Napa, California, and, over the past year, spurred an acceleration of that company’s commitment to golf. It is the story of two sides eager to come together, of a tech company that saw a golf tournament as much larger than just a sporting event and, in the end, of perfect timing.
“It took 58 days, start to finish,” said Jay Voelker, the tour’s senior vice president of development. “The main contact at Fortinet, Jim Overbeck, and I never met face to face until the signing. That’s really unusual.”
First contact was January 2021. The deal was signed in March.
“There was another company that was already involved,” said Voelker. “But to Fortinet’s credit, they kind of put the pedal down and quickly caught and passed them.”
The tour asked for a seven-year term, and the two parties settled on six. Fortinet says it spends about $10 million a year on the sponsorship.
“It’s not just the length of the deal,” said Voelker. “It’s what we’ve seen them do since. They have gone deep into golf. To see a company go so deep so quickly is rare. And they are tracking everything they do, and it’s working.”
“At the point that we found out about this opportunity, we had no budget. We were thinking of golf but only that maybe we could get our name on somebody’s shirt.” – Jim Overbeck
Since Fortinet assumed the sponsorship of what previously was the Safeway Open, it has also acquired an event on PGA Tour Canada, the Fortinet Cup Championship; has sponsored four brand ambassadors on the LPGA Tour; has become official cyber-security partner of the DP World Tour; has become the sponsor of the Fortinet Australian PGA Championship and has signed David Lipsky and Max Homa, who won this event in 2021, as brand ambassadors on the PGA Tour. (Maybe they were grateful to Homa. He edged Maverick McNealy, who represents Cisco, one of Fortinet’s major competitors, by one shot the first year they titled the event.)
Overbeck calls what Fortinet has done in golf over the past year “doubling down” on an investment that is not primarily about branding, but closer to B-to-B. As a company that is No. 1 in market share in 68 countries, but No. 3 here in the United States, branding has value, but sales is what this deal is about.
“I’m a numbers guy,” Overbeck said. “The great part of what we’re doing is that it has a tangible ROI. The branding is harder to prove, but this is tangible.”
Voelker says that ROI was Fortinet’s focus from day one.
“I got one e-mail from Jim that said, ‘We have looked at your partners. The number of PGA Tour partners that are our customers is 48, with a spend of 253 million. There are open opportunities with 47 other partners in the pipeline representing a potential spend of 157 million,’” said Voelker. “He said, ‘We’ve got the best sales people in the world, and if you can get us in front of these companies, we can make the sale.’ And we said, ‘If your sales people are as good as you say, we can give you the at-bats. It’s up to you to hit the home runs.’ And they have.”
Overbeck, who came up on the sales side, also had to do some selling on the inside.
“At the point that we found out about this opportunity, we had no budget,” he said. “We were thinking of golf but only that maybe we could get our name on somebody’s shirt.”
But Fortinet’s co-founder and CEO, Ken Xie, is a fan of the game, so it was a “natural” to suggest the company might go further. The pitch Overbeck made was not based on the “fuzzy” element of branding – his word – but on building business. He envisioned an event within an event: a cyber-security summit to take place in Napa alongside the event, with Fortinet’s partners presenting and its best customers, some of them PGA Tour partners, attending.
“I said, ‘What if there was this summit where we brought in 300 million worth of business clients and we could move the needle five or six points? That could be 18 million, which would cover the 10.8 we were paying for the tournament. ‘What if the whole thing paid for itself?’ They said, ‘You think you can make this self-sufficient?’”
It was all to happen in seven months.
Did they think he was crazy?
“Oh, they know I’m crazy,” Overbeck said with a laugh. “But I have a reputation for delivering on big promises.”
It has been delivery on that promise that has convinced Fortinet to deepen its investment in golf.
“The summit is the signature piece of the whole thing,” said Voelker.
Over a week Fortinet brings in two groups of 100 clients for presentations by cyber-security experts from around the world. Though about 20 percent of attendees – clients or potential clients – are international, the vast majority are from the domestic market Fortinet is trying to expand. In 2021, attendees represented $600 million in business or potential business – double the hypothetical estimate – and in 2022 it will surpass $800 million.
Fortinet uses the FortiExpress, shown in video above, at events around the country to educate customers and potential customers.
It works, said Overbeck, because the summit is not about Fortinet promoting its products: “We’re not the ones presenting. We’re bringing in the top security experts in the world.” Not only do clients and potential clients gain expertise, but “they see us as thought leaders, and they associate our name with quality,” Overbeck said. At the 2021 summit, 18 percent of the attendees were C level. This year that will be 35 percent. “We had 172 executive meetings on site during that week last year,” Overbeck said.
Fortinet’s software generally gets higher reviews than its competitors. Those face-to-face meetings, however, provide opportunities to expand and extend service contracts, with such services representing 60 percent of the company’s business.
Fortinet sees the summit as the first of four pillars of involvement with the Tour and with golf. Introduction to PGA Tour partners is second. “You look that their family of partners, it’s a list of blue-chip companies,” Overbeck said. A new relationship with Tour partner Chevron is one result he points to.
The third pillar is branding, the “soft and fuzzy” part that’s harder to prove, he says, but of real value in the United States.
And the last is the impact on Fortinet’s business partners, including security providers such as AT&T, reselling partners such as CDW and tech companies integrated with Fortinet, such as Intel. “They come together, experience this incredible event, and that tightens our relationship with them,” Overbeck said.
Though the summit is limited to one week at the championship, Fortinet’s “education” of customers and potential customers continues throughout the year at tour stops across the country by means of a van promoting its service and technology. It’s known as the FortiExpress, “express” being a pretty apt descriptor for Fortinet’s move into golf.
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