A £100million sponsorship plan for The Race to Dubai was thrown into doubt last night with the government takeover of the Middle East firm behind the ambitious five-year deal.
No expense was spared two years ago when The Race was launched in a seven-star hotel in Dubai as part of the $150million five-year sponsorship deal for the European Tour. All may not now be as it seemed, however, with the restructuring as there are concerns about the financial security of Leisurecorp, now that is has been restructured, and its chief executive has been ousted.
Leisurecorp specialises in developments and investments in the sports and leisure sector. In November 2007, it announced it was putting up $10million (now about £6.6million) annually for the European Tour Order of Merit to be renamed The Race to Dubai, and also said that it would sponsor the Dubai World Championship, the world's richest tournament, at a cost of $20million annually.
In addition, it would give the European Tour a generous war chest, part of which has been used to sponsor the European Open, to be played at The London Club in Kent in a fortnight, and part to build a Middle East headquarters for the European Tour at Jumeirah Golf Estates, the Leisurecorp property that will stage the Dubai World Championship in November.
Six months after this announcement Leisurecorp made another one, this time saying it had bought the Turnberry hotel and golf courses in Scotland for £55m, adding the venue for this year's Open, to the Pearl Valley Golf Estates it already owned in South Africa.
The global economic situation, however, has depressed the property market in Dubai and meant that most of the villas at Jumeirah Golf Estate, which were to be sold to raise money for Leisurecorp, remain unsold. David Spencer, the Australian chief executive officer (golf) of Leisurecorp, has been removed and is on medical leave and Leisurecorp itself has been taken over by Nakheel, a state-owned company in Dubai.
George O'Grady, the chief executive of the European Tour, insisted yesterday that the sponsorship deal was secure. “This thing is, one, about marketing Dubai and, two, about marketing Jumeirah Golf Estates - and if you are not selling lots of houses there has got to be a possibly temporary issue. Our five-year contract with Leisurecorp is safe, as we speak today. It is unaffected. We are not renegotiating it. They might have moved it from Leisurecorp to Nakheel, but the bones of the contract remain the same. We are financially sound and secure.”
Source:The times
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