Hong Kong Open

Hong Kong Open organisers wait on HK$1.6m fee

Local governing body could be left penniless in worst-case scenario if its share of tournament's sanctioning charge is not forthcoming

PUBLISHED : Thursday, 15 November, 2012, 12:00am
UPDATED : Thursday, 15 November, 2012, 3:26am

The Hong Kong Golf Association is on tenterhooks as a HK$1.6 million sanction fee for hosting the UBS Hong Kong Open - the local game's lifeblood - has still not been confirmed.

A worst-case scenario could see the HKGA left penniless from the US$2 million showpiece come Sunday, which would be a "tremendous blow" to the game's governing body, said chief executive Iain Valentine.

"Our sanction fee, which is usually 10 per cent of the prize money, has still not been agreed on. I hope there will be a sanction fee coming our way at the end of the tournament, but for now we have all agreed to wait and see where we end up financially," Valentine said.

The Hong Kong Open, which is celebrating its 54th anniversary, is jointly sanctioned by the European Tour and the Asian Tour, while the HKGA also gets a sanction fee. But due to the difficulties this year in finding a title sponsor - Swiss bankers UBS agreed to come back at the last minute at a reduced fee - and other ancillary backers, all three partners have decided to wait until Sunday to divide any surplus kitty, if one exists.

"It will be a tremendous blow to local golf if we don't get any money from a sanction fee," Valentine said. "But right now all our efforts have been focused on making this event a success."

Last year the HKGA received about US$275,000 as a sanction fee (the prize money was US$2.75 million) which translated into just over HK$2 million. The money was used by the association for everything from junior development to paying staff salaries.

Asian Tour chief executive Mike Kerr said all three parties had taken the view that the tournament came first, and was hopeful there would be a financial gain for everyone.

"We need to see where we end up financially. We are all partners in the event and we don't want to encumber the event unnecessarily," Kerr said. "For any tournament, sponsorship is the main revenue generator and once we have paid off all the operating costs, we can look at sanction fees. But for now, that has been put on hold."

Although the government has provided a record HK$16 million from its Mega Events Fund, this money cannot be used to pay sanction fees, as it is only for promotional activities, which include paying appearance fees for the top players.

The government official in charge of the fund's assessment committee, Vincent Fung Hao-yin, revealed that more than half the money had gone towards acquiring players such as Rory McIlroy and fellow Ryder Cup stars Paul Lawrie and Matt Kuchar.

Organisers have been forced to scramble for sponsors, but it is understood the biggest blow was the failure of the Hong Kong Open to sign up Omega as title sponsor. A source revealed Omega had been willing to come in for between US$3 million to US$3.5 million, but organisers - not the HKGA - had wanted US$5 million. Omega later changed its mind, leaving the tournament without a title sponsor until UBS came in at the 11th hour but for a reduced cost, slashing the prize money to US$2 million.

"Our fingers are crossed. The main thing is the event is going ahead, everything else doesn't matter," Valentine said. "We are thankful for the government and hope all our efforts to get other sponsors will pay off and there will be some residue to allow a small sanction fee at the end of the day."