The Tiger Tax
The Victorian Government has decided that Tiger Woods is a worthy investment. The world’s number 1 golfer will be appearing at the Australian Masters in November this year – but at a price. For the tournament, Tiger will receive an appearance fee of $3 million, or roughly US$2 million. Outside of the US PGA Tour, appearance fees are common, so whats makes this different? Half of the appearance will be funded by taxpayers. The other half will be made up by sponsors. A rough estimate would be that just under $1 from every taxpayer will be going to Tiger.
Much debate has occurred throughout the past week over whether this is a good move [Tiger Woods’ fee queried in Australia]. Premier John Brumby believes that Tiger’s presence at the tournament will net an estimated 19 million dollars to the Victorian economy. The tournament may now attract visitors from both interstate and New Zealand to catch a glimpse of Tiger. Ernst and Young have released a report estimating an increase in 10,000-20,000 more visitors, and at 50 bucks a pop that could end up at around 1 million.
Some people argue where this magical number of $19 million came from, as the event does not have a major television or sponsorship deal; if anything these two companies will benefit by snapping up a bargain deal early. The only way the money will be made up is by tourists spending money elsewhere, which is a high possibility.
Some welfare groups have criticized the fact that taxpayers money is being spent on sport when, with the global financial crisis, many families are struggling.
Tiger hasn’t played in Australia since the 90’s, as the prize money is that of some Nationwide events- hardly appealing for most international players. Some fear a similar disaster like that of when Woods was paid $4 million to play the New Zealand Open a few years ago. The event was washed out and the tournament lost millions.
Whether the presence of Woods in the Australian masters attracts international players remains to be seen; as I previously said, the money isn’t that appealing. Also, instead of spending $3 million on one player, would money be better spent across say 8 players? Why not attract a high quality field rather than just a marquee player? I feel this would increase the standard of the tournament.
Either way, Tiger’s got my money and I’ll certainly be attending at least one day. I just hope the rain stays away.