Recently, 20 year old Rory McIlroy became the youngest PGA Tour winner since Tiger Woods in 1996 as he won the Quail Hollow Championship in Charlotte, N.C. This came just days after Woods failed to make the cut for only the sixth time in his career. One may think that the tour stop sponsor, Wells Fargo, was thrilled with coverage of the event, which neared that of the four annual major tournaments. The most remarkable story of the tournament, however, might be the company paying $7 million in sponsorship dues yet keeping its sponsorship quiet.
Wells Fargo inherited the sponsorship in its 2008 acquisition of Wachovia Corp, which was based in the Charlotte area. Under the sponsorship deal, Wells Fargo will continue to sponsor the event, which moved to Charlotte in 2003, until 2014.
The bank removed its name from the event in 2009 amid public outcry regarding the suspected use of TARP funds to sponsor a sporting event. The furor first hit California-based Northern Trust, which held extravagant parties in connection to the tournament it sponsored. Similar outcry was voiced at stadium sponsorships including the New York Mets’ Citi Field and the Carolina Panthers’ Bank of America Stadium. Amid this backdrop, Wells Fargo’s decision does not appear to be unreasonable. In a statement, David Carroll, head of Wells Fargo’s Wealth Management, Brokerage, and Retirement Services group, said, “In the current environment, we also believe that promoting this event with our brand could send mixed signals about our priorities to many of our stakeholders. Also, as a result, our company will not host any client entertainment events in connection with the Championship.”
In 2010, Wells Fargo again decided to name the tournament Quail Hollow Championship. This came even after the bank repaid its $25B in TARP funds to the government in December 2009. However, the bank was more aggressive with its sponsorship in 2010. Francie Gottsegen, Wells Fargo senior vice president of sponsorships, speaking to the Charlotte Business Journal, said, “We definitely took a big step back last year. This year, we are much more aggressively leveraging the sponsorship.” Wells Fargo and Wachovia corporate logos were back on-site on ATM machines and corporate hospitality tents. In addition, the bank used all 8 of its contractual TV commercial spots per day, a year after donating four to Teach for America and the United Negro College Fund. Charlotte Business Journal estimated that Wells Fargo hosted 2,000 current and prospective clients, and the bank hosted its traditional post-tournament golf outing on the course.
Similar to the relationship between Wells Fargo and Quail Hollow, Morgan Stanley sponsors the Memorial tournament hosted by Jack Nicklaus. In 2009, Morgan Stanley bowed to public criticism and removed its name from the tournament. In 2010, however, the bank returned its name to the tournament, “the Memorial Tournament presented by Morgan Stanley.” Another example of bank sponsorship of golf amid the TARP program came in October 2009 when Citi signed a deal to sponsor the next 4 President’s Cup events.
In 2010, perhaps a compromise could have been naming the tournament the “Quail Hollow Championship presented by Wells Fargo.” But to continue to pay millions of dollars for little benefit is irresponsible to the bank’s shareholders. The bank must rename the tournament in 2011, especially as it rebrands former Wachovia operations on the East Coast to the Wells Fargo brand. In fact, Quail Hollow Club president Johnnie Harris acknowledged that the club expects the bank to enter into conversations regarding re-naming the tournament this summer.
