Originally created 04/09/00

Endorsements lucrative for pro golfers



This year's winner of the Masters Tournament will earn $750,000, a hefty sum by any standard but a drop in the bucket compared to what companies will pay him to wear their hat.

Prize money isn't the name of the game. It hasn't been for years.

It's about lucrative corporate sponsorships and affiliations. It's about having a "look," an image that companies can market to consumers.

"At every management company, the No. 1 focus is corporate marketing. Absolutely," said Mike Biggs, communications director for Dallas-based Gaylord Sports Management, which represents golfers such as Phil Mickelson and Bob Estes.

Most people might not realize it, but the multibillion-dollar sports marketing industry was built on professional golf.

Golfing greats such as Arnold Palmer, Gary Player and Jack Nicklaus were pitching everything from Pennzoil to Rolex watches decades before football and baseball stars shouted "Less filling! Tastes great!"

Duffers were wearing golf shirts with Amana logos years before basketball stars such as Michael Jordan became poster boys for Nike.

Contemporary golf historians trace modern sports commercialism back to Mark McCormack, a lawyer and college friend of Mr. Palmer's who negotiated the golf legend's first endorsement deals in the late 1950s.

In the early days, the deals were with clothing companies and golf equipment manufacturers. Mr. McCormack soon changed that.

"Mark just recognized that golf was a sport that corporate executives enjoyed," longtime Palmer publicist Doc Griffen said in a recent Athlon Sports article.

Today, Mr. McCormack's Cleveland-based sports marketing firm, International Management Group, negotiates multimillion-dollar contracts for some of the world's most bankable professional athletes and personalities, including Joe Montana, Wayne Gretzky, Andre Agassi, Greg Norman and Tiger Woods.

The two golfers in that list are in the top half of Forbes magazine's 1999 "Top 40 Athletes" list. Athletes on the list earned $641 million in 1998, 43 percent of which came from endorsements.

Mr. Norman, whose sponsors include General Motors and Boeing, has his own line of clothing, instructional videos and a wine label. Mr. Woods has long-term endorsement contracts with Titleist, American Express and Nike estimated at $20 million, $30 million and $40 million, respectively, making him the world's best-paid golfer.

Mr. McCormack has become wealthy right along with his clients, more so in fact. His net worth of $700 million lands him at No. 358 on Forbes' "400 Richest People in America" list.

Mr. Palmer and Mr. Nicklaus are not big earners on the PGA Tour anymore but are continually on the Forbes money list because they have parlayed their legendary names into full-fledged licensing corporations.

IN CASE YOU HAVEN'T noticed, there's no shortage of companies looking for pro golfers to hawk their products on TV and wear their logos on the fairway.

Many corporate sponsors have nothing to do with the game, or even sports in general. One of Larry Mize's sponsors, Air Products Inc., is a Pennsylvania-based producer of bottled oxygen and nitrogen for hospitals and industrial customers.

It doesn't matter. Exposure is exposure. Golf tournaments are watched by millions every year.

When the TV camera focuses on Jeff Sluman, what viewers see is his white hat with a big logo that says "PAYCHEX."

Paychex Inc., a Rochester, N.Y.-based company that handles payroll processing for small and medium-size businesses, has sponsored Mr. Sluman since 1986.

"Paychex participates in golf sports marketing because we believe it provides us excellent brand recognition and a good cross-section of American demographics," said Gene Polisseni, Paychex senior vice president for marketing.

Most golf fans are upper-income consumers, the kind of people that big-name golf sponsors such as IBM, Kemper Funds and Buick are trying to reach.

"The golf demographic has always fit real well with corporate America," said Dave Lancer, PGA Tour communications director. "The people who play golf and watch the tournaments are the same people who buy many of these services."

Mr. Lancer knows all about corporate America's growing fascination with golf. The PGA Tour's number of marketing partners, such as Delta Air Lines ("The Official Airline of the PGA Tour") and HealthSouth ("The Official Health Care Provider of the PGA Tour") has increased from 15 to 25 in five years.

About 60 companies, 20 of which are international, have retail licensing agreements with the PGA Tour's 35 gift shops.

"Five years ago, that didn't exist," Mr. Lancer said.

GOLF'S GROWING APPEAL is why corporations are investing heavily in the sport. Hip young golfers such as Mr. Woods, David Duval and Ernie Els have helped ignite interest in youngsters who would otherwise be playing a pickup game of basketball. The result is another demographic that companies can target.

Sports apparel giant Nike, whose core business has always been shoe sales in youthful sports such as basketball, had almost zero presence in golf apparel until it signed Mr. Woods -- a bona fide celebrity even before he became the youngest Masters Tournament champion in 1997.

"He's making golf cool. That's the easiest way to explain it," says Nike spokesman Mike Kelly. "With apparel, we haven't been serious until three or four years ago. Tiger sort of drove that."

Sales of Nike's golf apparel, once endorsed by Curtis Strange and Peter Jacobsen, more than doubled once Mr. Woods started wearing the trademark swoosh.

Lately, the sports marketing industry's biggest boost has come from fledgling high-tech companies hoping to build crucial brand recognition.

Brad Buffoni, a marketing agent with Minneapolis-based Signature Sports Group, which represents pro golfers such as Mr. Mize, Tom Lehman and Rosie Jones, said New Economy companies are becoming big players in the business.

IN FACT, MANY high-tech companies already have affiliations with his clients, including Scot Simpson, Alison Nicholas, Kellee Booth (Golf.com), Tim Herron (UUNET) and Charles Raulerson (TeeMaster.com).

"In the last year alone, our firm has seen a tremendous increase in the number of dot.coms wanting to get involved with this great game," Mr. Buffoni said. "Whether it is involvement with an event or a tour player, golf is helping these companies gain valuable exposure and increased credibility."

Exposure was so valuable to online retailer buy.com that last year it decided to take over the Nike Tour. The "buy.com Tour," as it will be called, ensures the start-up company gets regular mention on sports pages for the next five years.

"The old Nike Tour got an enormous amount of media mentions and publicities," said Greg Hawkins, buy.com's chief executive officer. "Our association with the tour gives us the same opportunity to build the buy.com brand."

The past decade has shown that just about any sports-corporate amalgam is possible. After all, Jay Don Blake once endorsed Playboy by sporting the trademark bunny logo on his bag.

If LiFizz Effervescent Vitamins can become the "Official Vitamin and Mineral Supplement of the PGA Tour," is it possible Viagra could become the tour's official anti-impotency pill?

"That probably wouldn't fly," Mr. Lancer said.

Reach Damon Cline at (706) 823-3486.