It’s the second Sunday of April, the grass is starting to shine, the Azaleas are in full bloom, and the Masters will crown the first major championship winner of the year. The jacket, only being worn by the best of the best, is an embodiment not only representing victory of the tournament, but a status symbol around golf and sports as a whole. Golfers all over the world would give anything to get ahold of the green jacket and to leave their mark on the tournament, but more importantly, the game of golf forever. The Masters tournament is one of the most exclusive events in sports. It is not only significant to players but to spectators, merchandise sales, and media rights. Yet, when it comes to sponsorship, the relationship between the Masters and its sponsor must fit as perfectly as the iconic Brooks Brothers green jacket fits its victor.
A philosophy has never held true or epitomized a sporting event more than the “Less is More” approach does with the Masters. With roughly three global sponsors, each allegedly holding one-year agreements, (Currently: AT&T, IBM, Mercedes Benz) minimalism and a gentleman’s handshake are the essential components to making each work. From commercial time, to event signage, to withholding all financial information from the public, the majority of information is on a need to know basis.
In conjunction, with the lack of financial data released about the negotiations between any of the respective sponsors, there are only estimates of their value. “It’s all shrouded in mystery,” says Jim Andrews, vice president for content strategy at sponsorship consultant IEG. Andrew’s doesn’t have a firsthand encounter, but through working in the industry, he hears that the contract negotiations go something like this every summer when they get together and agree on a deal.
“[CBS] says we need $15 to $20 million to cover our costs and maybe make a little bit of a profit.” Augusta then acts as a broker, arranging for the tournament’s three official sponsors—IBM, AT&T, and Mercedes Benz, to cover those costs. I’ve seen a ballpark that each of the sponsors are paying $5 to $6 million.”
“The Masters is the Super Bowl for UHNWI [Ultra-High Net Worth Individual],” said Chris Ramey, president of Affluent Insights, Miami, FL. “The environment is sophisticated and understated. It’s not over commercialized. Your presence is an indication you’ve been anointed – not bought your way in.”
In return for a sponsor’s anointing, they’re given four minutes of ads per hour, about half of the norm for a golf tournament, the right to activate at a small chalet stand hidden behind 10th fairway, and an exclusive association with the most prestigious golf event in the country. If that’s not good enough, the Masters holds every right to find another sponsor, just like the 300 plus people on the waiting list to become a member of Augusta National Golf Club.
Instead of maximizing how much money the Masters could generate for Augusta National Golf Club, their focus is on the “brands to which they associate,” Andrews said. “The Masters is the most sought-after association in sports; perhaps the world. Money doesn’t drive the Masters. Affluence is so abundant that commercialism is considered crass.” This is the key characteristic that the Masters capitalizes on which distinguishes them from other sport venues within the sponsorship realm.
This blog post was written by Samford University student Drew Jackson. He is a Finance major at Samford University.
Sources
Golf.Com. “Everything You Need To Know About Being A Member of Augusta National.” Retrieved from: http://www.golf.com/tour-and-news/augusta-national-golf-club-membership
Boudway, I. “The Masters: A Sponsorship Tradition Unlike Any Other.” Retrieved from http://www.bloomberg.com/bw/articles/2013-04-12/the-masters-a-sponsorship-tradition-unlike-any-other [Available to subscribers only]
The Motley Fool. “The Money Behind The Masters.” Retrieved from http://www.fool.com/investing/general/2014/04/11/the-money-behind-the-masters.aspx
Luxury Daily. “Mercedes-Benz, Rolex gear up for Masters Tournament with sponsorships.” Retrieved from http://www.luxurydaily.com/mercedes-benz-rolex-gear-up-for-masters-with-sponsorships/
