The Masters: A Marketing Anomaly

As someone who plays subpar golf (pun intended), the Masters is always a time of year where I see the occasional incredible hole-in-one highlight or T.V. ad that can only compare to the Biltmore. This year, there was a lot of press coverage down to the wire on if Tiger would actually compete, and he did not look like Tiger Woods pre-scandal and injury. I wanted to explore what makes the Masters so special: its brand.

The Masters is a marketing anomaly; in a world driven by commercialization and profit, the Masters remain true to tradition. To understand the business and Augusta National, it is best to frame it like this: The Masters brings in sizable amounts of money, leaves perhaps even more on the table, spends a lot of money to make its tournament better and gives away a lot to help grow the game. The Masters began in 1934 under Bob Jones and Clifford Roberts. The tournament has always been rooted in providing the best experience possible for the players and spectators. Without corporate logos and signage all over the course and limiting the number of spectators, the emphasis of the tournament is solely on the game. In 2006, Billy Payne transitioned into the role of chairman, where he found ways to incorporate strategic partnerships in a way that felt authentic to the Masters. In doing so, he remained true to the original focus, ideas and brand of the tournament while improving the sport and revenue.

There are many ways the Masters could monetize the tournament to decrease the amount of money left on the table, such as ticket prices, concessions, naming rights and media deals. Ticket prices could be raised dramatically, and they would still sell out, but considering the event’s prestige, the tickets are a bargain compared to other professional sporting events. Ticket revenue was $34.75 million in 2015. Revenue streams from concessions during the tournament are likely only to produce $7.75 million. It seems silly to picture Augusta National covered with signs or even think about adapting the course based on sponsorship deals. “The Masters presented by American Express” or the “Mercedes-Benz Masters” goes against what the original intent for the tournament was, and the “State Farm fairway” or the “Toyota green” sounds like the Masters needs the money more than it cares about its reputation.

The place where the Masters misses out on the most revenue is in T.V. and media deals. The Masters is breaking even for domestic television and bringing in $25 million in revenue for international T.V. Rather than letting various T.V. providers bid for the rights, CBS, which has been the home of the Masters in terms of broadcasting since 1956, makes annual one-year contracts with the tournament. Following the event, CBS sends an invoice to Augusta National, and they have their corporate partners cover production costs. The costs are estimated at somewhere around $6-8 million for each sponsor. The tournament only allows for three global sponsors: AT&T, IBM and Mercedes-Benz; then, two international partners, UPS and Rolex. It is incredible to think that these five brands are willing to pay $8 million annually to have zero signage or logos on the property for in-person or broadcast viewing, share a combined four minutes of ads per broadcast hour and follow stringent rules about how their association with the prestigious golf event can be promoted. However, these companies have enough capital to do something like this and know there is immense value in being among the elite few who get the opportunity to be a part of the Masters.

To really put the value of these kinds of sporting events into perspective, here are the revenue details for a few other significant sports tournaments and championships:

The U.S. Open generates $165 million in revenue annually, accounting for about 75% of the USGA’s total revenue. It costs $95 million to put on a show like the U.S. Open. Additionally, there is a $12.5 million purse for the winner. The rest of the money, roughly $70 million, is invested back into golf in the form of other championships and initiatives. Another example is the PGA Tour which has a projected 2022 revenue of $1.522 billion. If it is difficult to conceptualize in terms of other golf events, the U.S. Open earned nearly $300 million in revenue, according to the USTA’s 2018 financial disclosure. Impression and sponsorship-wise, I personally think the Masters would be able to compete with Super Bowl level deals if they opened the branding flood gates. While the NFL does not release specific numbers on its partnerships, the consulting firm IEG estimated that they were worth $1.8 billion, according to SportsPro.

I admire the Masters for sticking to tradition and preserving the spirit of sport without commercialization. In a world where ROI in sponsorships is still very much a guessing game, it makes sense for the Masters to lean against marketing. “It has become more quantified recently as the ability to track impressions has increased, but the value of the impressions is still a guessing game. Linking the sales of a product and increased brand equity to an event is so laden with assumptions that it’s probably more art than science still,” explains Mike Lewis, an Emory University sports marketing professor. Whether they are players or fans, those in the golf community agree with this anti-branding approach, and people will support the tournament because of what it stands for. “It is bold the way they do it since everywhere else in golf is so smothered in logos and banners. In a fun way, it reminds us of a simpler time which I think is the intent,” Rick Burton, former chief marketing officer for the U.S. Olympic Committee and currently a professor of sports management at Syracuse University, added. Golf’s largest showcase only showcases the sport; there is something truly magical about Augusta.