Sometimes you look at a sponsorship and scratch your head. The Sanderson Farms Championship? Really? Granted the company produces 13.65 million chickens per week and is listed on NASDAQ, but in what world does sponsoring a PGA Tour event make sense?
The value proposition for any professional golf event is twofold: First, you have television and digital-media coverage. If you’re running the marketing department at Zozo, a Japanese clothing company, people throughout the world who might google your name during coverage of the Zozo Championship. It increases your brand recognition and, possibly, retail sales.
The second component is client engagement. If you’re the Royal Bank of Canada, not only do you have brand association with your nation’s national championship at the RBC Canadian Open, you have a lot of onsite activation including top-flight hospitality, VIP tickets and an opportunity to engage with the athletes who wear your logo on their sleeves. That’s the reason RBC dropped Dustin Johnson so quickly – not that he joined LIV Golf (RBC is the bank that took Aramco public), but because he opted out of the RBC Canadian Open, which makes client engagement less valuable.
“The way ShopRite uses this tournament, it’s their number-one charity initiative. In each of the last two years, they’ve given $1.6 million to charity as a result of this event. They support local food banks and other charities in a big way.” – Leela Narang
At first glance, you have to ask yourself why this week’s ShopRite LPGA Classic, one of the longest-running events on the LPGA Tour, makes sense. What is the value equation for a regional U.S. grocery store to sponsor an internationally televised women’s golf event? It’s not as if LPGA fans in Singapore will buy avocados from a store in Atlantic City, New Jersey. Surely there are better regional options for the retailer’s marketing dollars.
But then you stand outside the Dolce Seaview Hotel in Galloway, New Jersey (a historic landmark hotel that has housed everybody from Warren Harding to Grace Kelly to Mick Jagger) and you see amateurs by the hundreds filing in and out of shuttles on their way to what is now recognized as the world’s largest pro-am, and it all makes sense.
“The way ShopRite uses this tournament, it’s their number-one charity initiative,” said Leela Narang, the tournament’s executive director. “In each of the last two years, they’ve given $1.6 million to charity as a result of this event. They support local food banks and other charities in a big way.
“In the Atlantic City area, the economic impact of the tournament really affects people’s lives. This is a blue-collar area, and the money the tournament brings in is huge. So from a charity perspective, this tournament is integral to raising those funds.”
The way they raise the funds is through the vendors who put products in the ShopRite stores, from P&G to Tyson Foods to Anheuser-Busch to General Mills. Part of the package ShopRite puts together to entice those vendors is a two-day pro-am held over three courses where Narang and her staff fly in more than 100 professionals who are not in the field. Some are former LPGA Tour pros who have moved on to other careers, and some are social-media influencers such as Paige Spiranac who have no tour affiliation but a large following.
“With other retail partners out there doing tournaments, like Walmart and Meijer, these vendors have to choose,” Narang said. “Sure, the other events do pro-ams, but I don’t think there is a pro-am in the country that rivals what goes on at ShopRite. It’s two days (over three golf courses), and it includes a much larger experience.
“It’s this almost-decadent Super Bowl of pro-am golf. For example, we have a pretty valuable closest-to-the-pin prize on every single hole. And we have an experience every few holes. There is grilling; there is music; there is sampling. We want this to be about the experience.”
A foursome runs between $10,000 and $18,000 depending on the level of engagement and number of days a group can play.
“We have almost zero attrition,” Narang said.
Most of the guests this year stayed at the Hard Rock Hotel & Casino in Atlantic City, where they attend two big VIP parties. And in the course of two days, the pro-am plays 1,200 rounds, some participants playing one day and some who play two.
“When you look at the financial model, the pro-am generates most of the funds to the tournament budget,” Narang said. “And if you’re talking about golf, I don’t think you’ll find a tournament out there that makes a larger charitable donation every year.”
She’s right. A lot of tournaments donate $100K to local charities, a not inconsequential number when you’re running a battered-women’s shelter or an after-school program for at-risk kids. But ShopRite gives 15 times that amount to charities in an area of the country that sorely needs it.
Now, suddenly, the economics make sense.
“The biggest value to ShopRite is not the brand elevation or the engagement: it’s the charitable contribution,” Narang said. “(Executives) tell us as operators every year, this money is extremely important to those charities. It doesn’t matter if they’re getting a thousand dollars or ten thousand dollars, these charities need this money to survive.
“This is what drives the tournament. It’s not a PR effort. This has nothing to do with that. On Tuesday of tournament week, we have a lunch, and many of the charities show up and get the checks presented. That is possibly the most emotional and heartfelt part of the week. We can see how this money affects people’s lives.
“That’s the business model for this event. That’s why it continues to be a success after all these years.”