Terry Leiweke doesn’t want his World Series of Golf franchise to end up in the cemetery of Las Vegas-based sports teams and golfing events.
It’s not that he couldn’t handle the failure. It’s that he couldn’t handle the humiliation in the eyes of his brothers.
From arenas to teams, the four Leiweke brothers have become synonymous with success in the sports business. Terry Leiweke believes the Las Vegas-based World Series of Golf, which just completed its second season, is well on its way to similar accolades.
The made-for-television event, a unique format that combines the skill of golf with the wagering savvy of high-stakes poker, allows an amateur golfer the opportunity to win a top prize of $250,000. The tournament will be expanded next year to add two more events, including one where the top prize will be more than $1 million. Plans call for the concept to be eventually tried in Europe.
Leiweke, 58, said he didn’t expect the World Series of Golf to make money in its first two years, and it hasn’t. However, he was up-front about those prospects with his initial investors and he firmly believes 2009 will be the tipping point.
“The graveyard is full of headstones of ideas, especially TV golf ideas,” Leiweke said. “We have a clear business model. Of course, there has never been a business with this particular model. We know what we need to do to grow this business.”
The World Series of Golf, which took place over three days in May at the Paiute Golf Resort, allows amateur golfers to pony up $10,000 each as an entry fee. Players wager on each tee, then bet the others in their foursome on whether or not they can make their subsequent shots. Rather than shooting the lowest golf score, the object of the game is to claim the money pot on each hole, eventually eliminating opponents by winning all the chips.
Leiweke said he and several partners were presented the idea three years ago. They played a round of golf using the format. By the ninth hole, they were hooked.
“My family has been in the sports business for 30-plus years,” Leiweke said. “We knew this was a cool format.”
The timing also turned out to be fortuitous. The PGA Tour has changed the name of its annual event in Akron, Ohio, to the World Golf Championship, leaving the familiar-sounding World Series of Golf moniker on the open market. Leiweke swooped in and claimed the name, which has since been trademarked.
In February, the World Series of Golf went public as an Over-the-Counter Bulletin Board stock. The 21.6 million shares have traded as high as $4.50 and closed at $1.10, down 10 cents, or 8 percent, on Friday. The company has a market capitalization of almost $25 million.
“We’re a content company and you’re investing in management,” Leiweke said. “We have a history of being able to execute.”
Unlike a casino in high-stakes poker, which takes a 6 percent to 8 percent cut of each prize pool, the World Series of Golf pays 100 percent of the prize pool to the players. Leiweke said the business makes its money in sponsorships and other areas. This year, major sponsors included FullTiltPoker.net, an online gambling Web site, and The Mirage, which served as the host hotel-casino.
“In two years, we’ve paid out more than we’ve taken in,” Leiweke said, saying golfing events are expensive to operate. The World Series of Golf also pays for the players’ hotel rooms. He said the company paid $50,000 alone to train “croupiers” who act as scorers and keep track of the wagers.
The growth market, Leiweke said, is additional events. Next year, a $200,000 buy-in event with the same format as the $10,000 buy-in model will be added, along with a Ryder Cup-style team event.
Also, the World Series of Golf plans on launching a Web site where online golfers, for a fee, sign up to play a digital version of the tournament. The concept, Leiweke believes, could match the once lucrative online poker phenomenon.
The Leiweke brothers’ track record is impressive.
Terry Leiweke was involved with the World Hockey Association in the 1980s and was responsible for the early development of indoor soccer, including an ownership interest in the Kansas City Comets, one of the sport’s one-time premier franchises.
Older brother Tracey Leiweke sits on the World Series of Golf’s board of directors.
Younger brother Tim Leiweke is CEO of Anschultz Entertainment Group, which operates the Los Angeles Kings and the Los Angeles Galaxy.
Younger brother Tod Leiweke is the CEO of Vulcan Sports and Entertainment, the company that manages the Seattle Seahawks and the Portland Trailblazers.
After the World Series of Golf was completed, the brothers got together. Terry Leiweke said his brothers believe the franchise will be successful.
“It’s a tedious job to do a start-up,” Leiweke said. “But we think this idea is global. It could be every bit as big as the World Series of Poker.”
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871.WORLD SERIES OF GOLF ON TV THIS WEEKEND
The World Series of Golf will be televised this weekend nationally by CBS (locally on KLAS-TV, Channel 8, 11 a.m. both today and Sunday).
This year’s event, which took place at the Paiute Golf Resort, had 80 players and was won by Andrew Johnson, a 36-year-old car salesman from Davison, Mich. Comedian Ray Romano and some well-known poker players, including Phil Gordon and Phil Ivey, took part in the tournament.
More than 500 hours of golfing, player interviews, parties and poker games were filmed and were paired down into two one-hour telecasts.