PGA Event in Walton County In The Rough After TDC Meeting

Another Example? Myrtle Beach

Hamrick pointed out to the commission that Myrtle Beach raised annual revenues through their PGA Tour with a profit margin of $15 million.

He claimed Myrtle Beach met with wild success: hoteliers claimed they booked approximately 9400 lodging room nights during the week-long event.

Hamrick concluded his presentation by saying, “This [the PGA Tour in Walton County] has been at the top of our [PGA’s] list for a long time. Walton County checks a lot of boxes,” he added, “I will do everything to keep proving that.  I know that if I could fast forward five years from now, you would be thinking this was a ‘no brainer.’  We just need to get it started.”

First Stroke – The PGA Event Lands on the Fairway

As soon as Hamrick wrapped up, the commissioners had plenty to say. Especially since all five were present for this lower-level county meeting. Donna Johns (Miramar Beach) spoke with enthusiasm for the benefits of involving the entire County.  She said, “I personally think it’s a fantastic idea. Yes, I realize it is a lot of money, but I think the return on investment is really good as well.”

Commissioners Tony Anderson (Santa Rosa Beach) and Dan Curry (Freeport) both voiced their support for hosting a PGA Tour Event in Walton County – and cited the financial implications.

Curry wanted to know where the PGA would host the tournament and intimated that the actual course that hosts the proposed Tour [not determined at this time] might also take on some financial responsibility and “have some skin in the game.”

Second Stroke – The Sand Trap

While Hamrick could be forgiven for believing he had it in the bag initially, his outlook probably changed once Danny Glidewell and Brad Drake got their turn at the mic.

Neither commissioner liked the financial obligations or the proposed contract length the PGA requested from the County.

Commissioner Danny Glidewell (East DeFuniak Springs) voiced his hesistation “The one thing that gives me pause is that $6 million per year for five years, plus a kicker. So what’s that going to cost us somewhere else? What is the opportunity cost(s) that this [the County] is going to incur? Do we lose a beach access or something along those lines? So, while I’m intrigued, the devil is in the details.  Plus, I want to know where the money is going to come from.”

In response to Commissioner Glidewell, Commissioner Anderson gave supporting information to suggest that the time of the tournament and the income made from this event will costs. Potentially be great with a “tremendous return on investment.”

Commissioner Drake, who is also the Chair of the TDC, offered a metaphor of comparison where an individual goes to purchase a new car and agrees to pay the ‘sticker price’ without negotiating for a better deal. 

Currently, the PGA is requesting a 5-year contract with Walton County for $6 million per year, totaling $ 30 million. 

After much discussion with the PGA representative regarding the length of the contract (3-5 years) and an effort to determine if the annual rate was negotiable, Mr. Hamrick responded that he was confident the PGA Tour would not negotiate the “sticker price” of $6 million per year.  However, there seemed to be a possibility that the contract length (number of years) might be negotiable. (moving from a five-year contract down to four years or even less.)

Commissioner Drake stressed that it would be advantageous to find “other sponsors” who are willing to ‘share in the risk’ and he suggested that if the government [Walton County] is willing to ‘bear the burden’ of financial responsibility and risks, then why would there be any reason for others (additional sponsors) to participate in this potential investment by contributing and have some “skin in the game.”  He continued by pointing to the Myrtle Beach location currently on the PGA Tour and Drake said, “Myrtle Beach is a golf course community.  People go to Myrtle Beach to play golf. People come to South Walton to go to the beach. We have to recognize what our tourism objective is in this exercise.  Is it to rebrand Walton County as a golf destination?  If we do, there is a lot of risks in doing that because we are beaches and we are sun. We are good at both of those.  We know what we are doing by offering them [our visitors] a quality product.  They come here and stay at nice hotels and go to nice restaurants.”  

Drake continued his counter with: “If we are the most desired commodity, if we are the destination most desired [for the PGA Tour], they are going to work with us.  If we are number five, [and] if we are competing with Biloxi, Las Vegas, or somewhere in Central Florida…and they [those other locations] are the desired commodity, then they might not be willing to work with us. But it looks like we are close at the top in desirability for location. We need to negotiate this significantly.  We need to find out the value of the contract,” he argued, “This is a significant deal.  This is a $30 million obligation of which is going to tie up 90% of our marketing resources to the golf industry and that is not what puts heads in beds down here eleven, twelve months out of the year.  It is white sands and beaches [that bring the tourists].  That is for your [the BCCs] consideration. My vote at the TDC level was to put that decision up here. My vote was not an endorsement of bringing the PGA here – it was signifying that it should be at this level [BCC] where all five of us get to make the decision.”

The PGA representative discussed the possibility of considering a co-sponsor or multiple co-sponsors to help with the overall expense.  Commissioner Curry asked about different ways to manage the financial burden for the County and addressed the possibility of negotiating fewer years in a possible contract with the PGA Tour.

Mr. Hamrick stated that a five-year commitment is preferred because the PGA Tour seeks a longer presence, and a one- or two-year commitment would not be preferred due to the potential loss of long-term success.  

Regarding price or the annual cost, Hamrick said that “$6 million [per year] is the number.  We know what it takes to be successful in the long term. So, that is the number that we will not be able to move from.”

Commissioner Drake made a strong statement regarding the impact of this commitment, saying, “I wish that as a board, collectively, we wouldn’t be so excited about saying, ‘Yes, we are going to pay your ‘sticker price’ [$6 million/year] and [instead] find out what the buy-in from the other side is.  If we walk away from this deal today, somebody is going to [say], ‘By God, that is too big of an opportunity – we can’t let it go away.  We are going to do something about it.  We are all going to chip in and all do something. But not if we’re [the County is] ready to ‘stroke the check.'”  (meaning to write the check for the full amount.)  Drake continued,  If we just give you [the PGA] what you want, then what do we get out of it?”

Drake said the bottom line is that “Walton County needs to be able to walk away from the deal if the PGA is not willing to budge on the ‘fixed terms’ set by the PGA. Interim County Attorney Clay Atkinson clarified for the BCC that the County Commissioners need to know what they are willing to spend.  The conversation continued with questions for Matt Algarin regarding research and an “in-house economic impact study” that had already been completed, including projected income for the County over five years.  Additionally, Mr. Algarin will continue his efforts to speak with potential co-sponsors for the proposed PGA Tour in Walton County.  He will report back to the BCC later in June regarding potential co-sponsors.

Mr. Hamrick also committed to returning to the BCC with a written proposal outlining the options available from the PGA Tour regarding the options available to Walton County for contract years. (three, four and or five years).