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The Masters: Tiger's Money Game


By Rick Horrow and Karla Swatek

April 4, 2012

Over the last decade and a half, for serious golf enthusiasts and casual fans of the game alike, nothing

gets the blood pumping more the roar of a Tiger. Since his first Major victory in 1997, at the Masters, the cadence of Tiger Woods’ near-perfect swing has become the heartbeat of the entire golf industry, bringing thousands of novice golfers to the sport, turning his fellow PGA Tour pros into wealthy men through the generous prize money his participation cemented over time (purses were $280 million in 2011, about $200 million more than when Woods joined the Tour), and escalating rights fees for televised golf events rivaled only – percentage increase-wise at least – by NFL games or the NCAA men’s basketball tournament.

With the first official Masters tournament round set to begin on Thursday, April 5, the focus will be on Woods and whether he can win his first Major in close to four years – or whether rivals nipping at his heels such as Rory McIlroy (returning to the scene of his Sunday back nine meltdown last year), the suddenly hot Hunter Mahan (who won in Houston on Sunday), defending champion Charl Schwartzel, or another can best him. The economic back story of Wood’s resurgence is much clearer – he has already generated significant last minute demand in Masters secondary market badges and hospitality, and if he remains in contention over the weekend, we’ll see Easter Sunday Masters TV ratings unlike any other.

 

Channeling Television

According to Nielsen, the 1997 Masters, Woods’ first victory in Augusta, had the highest TV rating (14.1) of any final round of a golf tournament, up there with Jack Nicklaus’ final win in 1986. “Being with [son] Jackie, coming off the 18th green, winning…really when I was too old to win the Masters…and you know, it was a great thrill just having him with me. That was by far the most important thing to me,” Nicklaus shares in a Bloomberg TV “Sportfolio” interview this week.

Woods’ 2001 Masters win was the second highest rated golf tournament round of all time (13.0). Based on those numbers, and what we saw at the Arnold Palmer Invitational final round last week (4.8, Bay Hill’s best Sunday finish in three years), this year’s 76th iteration of the Masters could blow earlier ratings out of Rae’s Creek.

While Masters’ TV ratings numbers are not of the same significance to broadcast partners ESPN and CBS as is virtually the rest of their programming, since Augusta National controls the advertisers allowed to show commercials during the tournament and the rates they pay for the privilege, they are of high importance to such stakeholders as PGA Tour Commissioner Tim Finchem, who last year renegotiated the lengthiest TV rights deals in the Tour’s history, nine year deals with NBC and CBS (financial terms of the agreements were not disclosed).

“In the past, we’ve had to do things looking ahead four years, five years, or at the most six years, because everything was tied to the TV contracts and our current sponsor agreements,” Finchem told the Wall Street Journal in January. “Now, with most of the big stuff set, we have a much longer runway to think about the next environment.”

CBS Sports Chairman Sean McManus, however, hinted to Daily Variety that Woods’ long drought lowered the amount that network was willing to pay for golf coverage. "In the most recent PGA tour deal we did,” McManus said, “we did not assume that Tiger was going to be as dominant as he has been in the past. We did a very conservative projection on ratings. If Tiger finds his groove and plays a number of PGA tour events, that’s all upside for us.”


Augusta: Extra Hospitable this Year

Emanating from Augusta, the Tiger roar takes on the sound of ringing cash registers. Traffic to online ticket reseller StubHub picked up considerably following Woods’ Bay Hill win. While prices for secondary market Masters badges didn’t increase – as of Monday, a Thursday badge was going for $772, a Thursday-Sunday badge package for $2,925 – rather, the inventory of available tickets dropped noticeably over the 48 hours following Woods’ victory.

Also seeing an uptick in the area is corporate hospitality. Owned and operated by Intersport, the Double Eagle Club is the original corporate hospitality facility in Augusta for Masters Week, founded in 1992. According to Intersport President and CEO Charlie Besser, the Double Eagle Club’s business has grown 27 percent this year, due to two factors.
“First, the U.S. economy has improved and businesses are starting to invest again in their most important asset, their business relationships,” Besser says. “The Masters is the most effective investment in sports entertainment because it creates a coveted, high quality experience with clients, without interruptions.
“Second, the excitement leading up to the tournament itself has caused growth this year. Rory, Bubba [Watson], Phil [Mickelson], and Luke [Donald] got the kettle boiling, and then Tiger won and the kettle exploded!”




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Beyond the Scoreboard
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
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Beyond the Scoreboard eBook
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
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Beyond the Scoreboard: Chapter 1. The Mega-Master Super Series XLXL eBook chapter
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