Chief Future Officer: Kathy Milthorpe, LPGA

In a decade of disruption for the business of sports, one game has seen a significant.

Upsling During COVID, golf exploded on a.

Course, at the driving range, at indoor simulators and entertainment venues. Record numbers of Americans played golf last year, and a growing portion of those were women. More than six million women and girls played the game on a US course in twenty twenty two, again of fourteen percent over twenty nineteen.

You look at the number of women that want to learn the game, young girls that are joining on the tea. Really an exciting time for all of us to really capitalize on this moment.

It's a moment of peak opportunity for the Ladies Professional Golf Association. Founded in nineteen fifty as a playing tour, the LPGA is now a nonprofit organization supporting women's golf at every level.

I think that the LPGA's the land of opportunity. They were the originals. Like when you think about women's sport and the idea of women founding and building sports on their own, I think LPGA.

LPGA tournaments featured the world's best players competing for millions of dollars, while LPGA programs build a grassroots involvement that creates a passionate audience for the product.

Golf is one of those rare sports that adults actually love to watch, but then they can actually go play nice.

Oh that's the best of the day.

Holy cow.

Molly Marcousseman was named LPGA Commissioner in twenty twenty one. That was amazing, bringing credentials as a college athletics administrator and a longtime sports facilities executive, smoothing her transition to this new challenge seasoned CFO Kathy Milthorp, who started her career at the LPGA over thirty years ago.

Kathy's you know, wealth of knowledge for the golf industry was really really important for me to be able to learn the business.

We're going to do a little finance one on one for the player for the new player director she was talking about.

She's definitely not the CFO that sits in the office and.

Crunches the numbers that we tell her to crunch.

As we're talking about strategy, we can just ask her sitting in the room, Okay, what are the levers we.

Can pull to to really implement that strategy in competition.

Golf is the ultimate individual sport. But for the LPGA to sustain its momentum as a driving force for women's golf, it takes a team effort.

She has this tremendous knowledge, but she also you know, she's committed to the business. She's passionate about it. She really doesn't just think this is what I'm told to do.

She thinks about how we can actually grow the organization every day.

So it's been a godsend to me.

She loves the LPGA, loves the organization, and I think in that leadership role, you really have to have a passion for the mission. She's also got great business acumen. She's interesting because she really does like the numbers. So as a CFO, that's great for me.

She's asking about the numbers all the time.

She's asking about the numbers. She likes the numbers. I think if she dies and comes back, she's going to be an accountant one day.

With our growth strategy, the idea is to get to yes.

I mean, we're really investing in top line growth and so we want her to say yes as much as she can possibly say yes.

You always often think of accountants as the no people or the people of why we've got to work within a structure or save money or cost control, and sure we do that. We try to make sure that we're good stewards of the association's resources. But I think where we've tried to be more effective is to make sure that we're helping our departments, our colleagues, our members drive success. And so that's finding the ways to a yes instead of finding the ways to a no.

To understand Kathy Milthorpe's rule. As CFO, it's essential to understand the LPGA's business model.

The best CFOs and not for profits and sports are great at growth, great innovation, great at scale, and then really excellent as strategic thinkers about where should we be spending.

Our focus is on mission and so that's really taking the revenues that we generate and redriving that back into providing member opportunities. So as a finance team, you know, our goal is to really help shepherd those resources to make sure that we're driving and fueling growth.

Before COVID, the lpg's annual revenue fluctuated within a consistent range. The last two years have seen those numbers jump.

We've experienced tremendous growth.

You know, from pre pandemic to now, I think in every one of our major revenue categories we're up over fifty percent, which is which is tremendous.

What are the metrics that matter the most to you right now?

Prize money for the players, that's the way they make a living. The ability to be able to compete at the highest level and earn purses that are commensurate with their male counterparts is a mission that we're driving towards every day.

The annual prize money pool in LPGA tournaments has grown fifty percent since twenty nineteen. In twenty twenty three, it topped one hundred million dollars, but the prize fund still likes far behind what men compete for on the PGA Tour. The inequality hits hardest at the lower end of the money list.

Clearly, we want the top players to continue to make a great living playing.

These are the very best in the world. But we also then dig in and.

Say, Okay, what's the fiftieth best player in the world making, and what did you make last year? What did the one hundred best player in the world make, and what did you make the year before? I've asked Kathy to run numbers many times to say, Okay, tell me where we are exactly during the middle of the season.

At the end of the season, that one hundredth player, our goal would be to obviously have that player make considerable amount of prize winnings, and we're going to work really hard to do that. Having said that, we do need to continue to focus on ways to provide opportunities so that one hundred best player can cover those costs that it takes for them to be out here on the golf course. That's hiring a caddy, that's travel, that

To meet these objectives, LPGA leadership collaborates creatively with sponsors.

We've worked with some of our corporate partners to say, help us solve a problem. You help us create a fund that will allow our players to get to the first team ready to reach peak performance.

And more partners are stepping up. According to Intelligence platform sponsor United sponsorships in women's sports leagues grew twenty percent. In twenty twenty two, the LPGA led the way, with brand deals increasing thirty percent versus twenty twenty one. Underpinning the boom a shift in thinking.

It was only a few years ago we were saying, oh, you should for women's sports because it's nice. We don't have to say anymore.

Brands are understanding that it's not a pity party anymore. They're not investing in women's sports because it's the right thing to do, but they are seeing actual great ROI.

When you look at women who are making most of the purchasing decisions in households, whether that's cars, or that is home or financial services, and who are going to drive the wealth of the future, it's women.

If you talk to our top sponsors, they'll say, listen, this is a double value. We get the value of the commercial, you know, sort of just exposure that we get in the brand building, but we also get to talk to our clients, to our employees and really show the commitment that we have to women.

The beautiful thing is brands are not realizing there's huge demand for women's sports, but even more importantly, women's sports fans are fiercely loyal they'll spend.

Not playing if it releases.

The LPGA's TV viewership also rows in twenty twenty two, another promising sign for its financial future.

Media rights is really probably the single largest driver. In addition to corporate partners that drive the association's revenues.

The LPGA and the PGA Tour have a joint agreement for domestic media rights that runs through twenty thirty. In the rest of the world, the LPGA controls its own media rights. Its content can be seen in over five hundred million households in one hundred and seventy five countries around the world.

Twenty five years ago, was primarily a US based organization. Now more than forty percent of our revenues come from outside the US.

Media rights deals outside the US are a driver of revenue growth, but building a global media brand takes time and money on side.

For je Chin, someone sitting in Soeul, Korea has a very different perspective than maybe someone that's sitting in Toledo, Ohio, and so the ability to really create a global telecast is something that we've got to continue to invest in.

Developing and upgrading technology has been a key priority for the LPGA and will be for years to come.

Technology is going to drive the future.

One seven shot continued.

Sports are all about data these days.

People want to know how well are women performing at various parts of the game, and also it helps with the equity conversation. By having more advanced stats and more data, we can tell the stories of the very best players in the world and how they compare to other women on the tour, but also how they compare to men.

Shot level data for betting is also important.

We know that betting really gets people connected to the game. If you have a stake in what people are doing, you get to know the players more, you get you follow them more closely or more connected as a fan. Our website and having two way communication with our fan fans is critical.

I think that data is very important to any league that is looking to connect with their fans on a deeper level, because women's sports is an opt in experience where you actually are seeking out where can I watch this match? Where can I watch this game? How can I watch this tournament. The more that that league or team can talk to their fans, I think that's.

Really tremendous. What does your investment spend on technology look like right now.

We're trying to figure that out, and I will tell you we're going to need partners to be able to do that, because I'm sure you know tech is not cheap. We're in the process of kind of outlining our roadmap. We're also looking at how we can create operational efficiencies molding all the various databases and various solutions that we have Internally. We probably have thirty plus different solutions that

The year that Kathy Milthorpe came to work for the LPGA Hall of Femer, Pat Bradley was the tour's top money winner. She earned just under five hundred thousand dollars. That was in nineteen eighty six.

I worked for Price water House Coopers at the time Cooper's and librand when I went into public accounting and they were a client. The LPGA tournament was a client of mine, got recruited and came to work for the association when we were based in Texas, and then helped as part of the relocation when the business moved to Florida.

She's had three separate tours of duty at the LPGA, stepping away twice to pursue other opportunities in sports. What did you bring back to the LPGA from those experiences?

While it was challenging to leave, it was probably the best thing I could have ever done for my career because I got a chance to see one, for instance, on the golf side, really what it takes to put a golf tourent on. On the public affairs side, really seeing what it takes to secure sponsors, to build marketing plans, to look at new ways of financing. And I think that has served me well to allow me to look at things in a different light than just crunching numbers.

Kathy Milthorpe's range of experience helps her see the big picture and also master the details. Both capabilities come into play as she oversees the LPGA's primary revenue source the tour.

Every week we play in different markets around the country, and it's somewhere between a five to fifteen million dollar operation that's taking place. We're bringing in staff, vendors, caterers, building really a little city within a tournament infrastructure.

In twenty twenty three, the LPGA will hold tournaments across Asia and Europe and in eleven US states. Geography is just one measure of its complexity.

When we go to a tournament site, that's like a upper business also, and each tournament that we work with has a different financial model.

We'll operate about four of our thirty plus tournaments this year, and then the rest of them are operated by other individuals, other promoters, other operating companies that help bring what we call the traveling circus to town each week.

Across all the different venues and operational conditions, Milthorpe and her colleagues have to make sure that the customer experience consistently achieves a high standard.

I think the fan when they come to a sporting event today. While the competition is certainly the key, they want an experience. So they want great food, they want something where their family, whether maybe they're not a patron of the sport, or their kids can do something they want, really an outdoor experience and also be able to watch great athletes compete.

Fans also attend tournaments to interact with their heroes on a more personal level. For an organization with a mission to promote the sport and build engagement, every event is an opportunity to create bonds between the women who play and the audience that supports them.

The tournaments are a great foundation. The stars of the show are those athletes, and I do think there's an opportunity right now to better connect the LPJ superstars with the growing fandom of women's sports, especially if we look ahead and we look at gen Z. It's a generation that cares about purpose, They care about connection.

How close can they get, how much engagement is there? Interaction is there between the fans and the players themselves.

You know, golf is probably one of the few sports where the fan can really get up and close and personal with the athlete. But the great thing about the players are is they'll stop during the competition, they'll sign autographs,

Really get it.

They recognize at the end of the day that the fans are what make the difference.

As CFO, of course, your job is to maximize revenue, to bring in revenue, So how do you determine the value of that level of fan player engagement?

Yeah, I mean, certainly driving ticket sales is important to the overall bottom line for an event. Each week, it's essential that we create something that's profitable, so either we can reinvest back into the prize money or provide money for charity in the local community, which is also equally an important component to what we're doing.

Some of the headwinds facing all global businesses continue to weigh on the LPGA Tour. A tournament in Shanghai early in twenty twenty three was canceled due to COVID complications. Inflation has driven up travel and hospitality costs, among other expenses that vary dramatically from continent to continent. What do the financials of a tournament that's held an Asia look like versus the tournament that's held in the US.

It's interesting when you play overseas, it's a lot more expensive to conduct an event for a couple of reasons. One, you don't have the large volunteer base in typically in Asia, most of those support individuals are paid. Also, just infrastructures more expensive in some of those In some of those areas, we might play in more remote areas where there's not a lot of competition, so building the infrastructure skyboxes, tents

There's also geopolitics to consider. One sensitive issue that's playing out across the golf world centers on Saudi Arabia. The Kingdom's Sovereign Wealth Fund finances the men's Live Tour, which competes directly with the PGA. On the women's side, The Kingdom's oil company, Saudi Ramcop sponsors a series of tournaments that attract the world's top players with substantial prize money. The LPGA's approach to Saudi investment in women's golf accentuates the positives.

They're providing additional playing opportunities for the women on the Ladies' European Tour, which you know, they're much needed opportunities. As far as the LPGA is concerned, I mean, I think, as you know, we're really bullish on our growth and so we're really focused on the growth that we're sort of a trying to achieve, and you know, it's our responsibility to always listen to and to see other people coming into the game and to see what.

Opportunities could be.

Our job again is to focus on you know, elevator, elevating our brand and elevating our footprint, and that's really what we're doing. And I think as we've seen the opportunity is there.

In twenty twenty three and beyond, the LPGA is poised to capitalize on two very favorable trends. An increase in the number of women who play golf and a surge of support for women's sports from corporate sponsors and partners. The organization has a expanded its global employee headcount by ten percent since twenty twenty one and plans to continue staffing up.

Mostly, I would think we're investing in our sales team because we think the market is really big and it's ready for us. So we're also investing in some partnerships with some third party partners that can go out and help us, you know, kind of canvass the world more. We need more people to be out there talking to those brands across the globe that we're interested in helping us grow.

How critical is Kathy going to be in looking through those opportunities.

Well, I mean again, she has to first let us know how much money we have to invest in that top line growth. So we need to go to her and say, listen, we need to we need to build people that can manage our current partnerships, and we need to build the staff that can go out and find new partnerships. Again, she's right right next to me on this to say it's time to bet on ourselves and to be able to really scale more quickly.

Scaling up its infrastructure is one task ahead for the LPGA. Another pillar of the organization. A strategic plan is scaling up societal impact by increasing diversity. One of the goals that Molly has made a priority is to change the face of the game, bringing more diversity into the sport at all levels. As CFO, I'm wondering, what can you do to move the needle on that. Is there something you can do well?

I think there is, because we've dedicated resources to do that. We've actually staffed up, you know, the LPGA Foundation, which was really primarily operating the girl's golf program. I think probably ten years ago we had less than four employees. Now we have probably close to twenty. So they're focused on programming, they're focused on fundraising, leadership academies, bringing golf

And as CFO of the LPGA, Kathy Mildorp makes sure that resources go where they can do the most good for women's golf, whether it's empowering beginners through grassroots programs or increasing earning power and pay equity for professionals. I wanted to know what she sees when she looks into the future. What is the opportunity for the LPGA in the next five years that really gets the most excited.

It's still those athletes.

The talent, the energy they bring, the extraordinary performance both on and off the golf course is what makes it special. And I think that we're just at this moment in time where the world is really going to see how incredible these athletes are and that's super exciting to be a part of.

On the flip side, what's the challenge that keeps you up at night that you see as something really kind of hanging over over the next five years.

You know, I probably it's navigating through all the opportunity.

There's a lot.

We're in a very competitive sports landscape. We're really competing not only in sports, but in entertainment, and what do we spend our time on how do we do things well. I'm a big believer on doing things, you know, two or three things really well instead of one hundred things. Okay, So I think making sure that we stay laser focused on the things that are going to move the needle for our members and provide that next generation of golfer that's behind them is something that's really important.

What is the skill set or area of knowledge that you think is going to be most useful to you as CFO in five years time.

I still think you have to be very strategic. It's not just the numbers, but it's how do you make the numbers get to the yes and what you're trying to accomplish. And I think thinking strategically about what makes the business move and what will be meaningful for our membership is something that's going to be that we're laser focused on. That I'm laser focused on.

Let's just say you get a call from a friend who says, hey, guess what I was named CFO. What's one piece of advice you would give to someone who is about to become a CFO.

It's an interesting question because I think about my own career journey and it is probably my answer would be is it's not about how to say no. It's about how to say yes, how to figure out how to support the business around you to get them to the place where they need to be sure. You know you want to deliver results and you want to create processes, but don't let processes keep you away from achieving results.

I'm Scarlet Foo. This is Bloomberg.