2003 Ad

Golf Digest, Feb, 2004 by Ron Sirak

THE MEN IN THE MAJOR TEAM SPORTS--BASEBALL, basketball and football--may have the mind-boggling salaries, and a few, such as NBA teen sensation LeBron James, garner impressive sneaker contracts, but no athletes do as well top to bottom off the playing field as professional golfers. The first Golf Digest 50--an all-encompassing world earnings list compiled through interviews with dozens of players, agents, analysts, golf industry executives and marketing experts for major corporations--found that the top-50 players earned nearly $390 million in 2003, and that nine grossed more than $10 million. No one, of course, is in a league with Tiger Woods, whose $83.7 million is the most ever earned by an athlete in one year. But the enduring earning power of Arnold Palmer and Jack Nicklaus, the emergence of Sergio Garcia and the marketability of Annika Sorenstam demonstrate the broad appeal of golfers to the corporate world and the unique revenue streams open to professional golfers.

What makes golfers so valuable? Image, accessibility and dependability, for starters.

IMAGE: Though team-sport players may reach a larger audience than golfers, they come with greater risks for the company putting up the money. Golf, almost without exception, has been free from the kind of negative headlines generated in other sports by drug arrests, domestic violence, reports of steroid use or situations like the Kobe Bryant trial. According to the 2003 League Report Card produced by SportsBusiness Journal, when sponsors were asked to rate their overall satisfaction with their sports advertising, the PGA Tour was ranked first, followed by the LPGA. NASCAR was third, followed by Major League Baseball and NCAA football and basketball.

ACCESSIBILITY: Professional golfers are walking billboards. Because the players do not wear team uniforms, companies can purchase pieces of them as advertising space. The front of the hat is the most desirable spot because it gets the most TV time and is in all the photographs. (Ever notice how players never take off those hats during interviews? That deal could be worth $250,000 a year--or in unusual cases, 10 times that amount.) When Sorenstam added Kraft to her sponsor list last year, her hat, shirt front and sleeve were already taken by other sponsors. All that was left was the shirt collar, but that spot also gets prime exposure, earning Sorenstam an extra $400,000 a year. The fact that clients can play with golfers in pro-ams or corporate outings also enhances the players' value. No other sport offers that accessibility and market value.

DEPENDABILITY: There is a stability to golfers. First, they are not tied to a team, so a sponsor does not have to fear a trade or a relocation because of free agency. Also, the fortunes of a player are not affected by the fortunes of a team, as in the case of Alex Rodriguez, who is the highest paid player in baseball but since signing his 10-year, $252 million contract with the Texas Rangers has seen his team finish last every year. Forbes magazine reported that Rodriguez made $26 million in 2003, but only $900,000 of that was off the field. U.S. Open champ Jim Furyk made five times that in off-course money last year. Also, advertisers attaching themselves to a golfer do not have to worry about strikes or lockouts sidelining their investment. And then there's the longevity of golfers. After the creation of the Champions Tour, golfers never really retire. Arnold Palmer, 74, is still second among golfers in off-course earnings. Sam Snead was still under contract to Wilson when he died at the age of 89.

COMPETITION: What makes golfers unique among athletes in terms of revenue streams? The corporate outing is something not really available to any other athlete. A golfer of even modest reputation can pull in $50,000 for a one-day event in which he plays 18 holes, puts on an exhibition and maybe has a few drinks with important customers. In recent years, Hale Irwin was doing 15 to 20 outings a year. There is also the pro-am, where players can make valuable contacts. Vijay Singh first met investor Ted Forstmann when they played together in the 1994 AT&T Pebble Beach National Pro-Am. Singh now wears a Fortsmann Little & Co. logo on his shirt and earns seven figures a year from partial ownership in several companies with which Forstmann is involved.

Another way to cash in is appearance fees. Though appearance fees are forbidden on the PGA Tour, they are commonplace everywhere else in the world. Fees just for showing up at a tournament can range from low five figures to $1 million for Ernie Els and $3 million for Woods.

CONSTRUCTION: A very lucrative area of income unique to golfers is course design. It is unlikely Derek Jeter will ever design a baseball stadium or Shaquille O'Neal a basketball arena. But Greg Norman and Jack Nicklaus, for example, have created their own design companies. Gary Player Design worked on 23 courses in 2003 at $1 million a pop. One of the value-added incentives International Management Group offers clients is its design division. Sorenstam and David Duval, IMG clients, both opened courses in China last year for high six-figure fees. Most of the work on these projects is done by men in bulldozers and engineers in front of computer screens. The commitment from the player usually amounts to turning over the first shovel of dirt and hitting the opening shot with perhaps a site visit in between.