Contract Negotiation Corporate Sponsors Endorsements Golf

Product diversity rules the minds of PGA Tour player agents

Scott Hamilton of Golfweek noted in a column this spring that “the exposure a professional golfer can provide a company and its products isn’t priceless, but it sometimes seems that way. At the very least, the cost of the marketing Tour players provide is on the rise.” Which makes the recent American Express-Tiger Woods divorce all the more perplexing to many in the golf industry (historically, it’s been estimated by various PGA tournament directors Tiger’s presence alone adds between $250,000-$500,000 in ticket sales to any four-day event, and events where Tiger is at the top of leaderboard have seen its television ratings jump as much as 125% from prior years).

Because golf agents (or “player managers” as many in the business prefer to be called) do not receive a percentage of their clients’ on-course earnings, they must make their income by negotiating sponsorship, equipment and other deals including appearances at corporate gatherings and outings. According to Brian Balsbaugh, a former professional golf agent for Imani Sports in Minnesota (where he negotiated deals for the liks of Casey Martin, Natalie Gulbis and Ben Crane) and now CEO of Poker Royalty, LLC in Las Vegas, the key to success in representing professional golfers is “knowing what companies are spending money and developing relationships with them. If you can sell and bring in sponsorship revenue for your clients, you will succeed.” And as Imani president Chris Murray once related, “if you can’t sell [your client], this business isn’t for you.” Recounting his own experiences, Balsbaugh said that in terms of commissions, “the industry standard in golf is 20%, [although] some companies only take 10% of a club deal.”

At least for the most talented, higher-ranked and thus more marketable players (the better you play, the more television time you receive in a given telecast, and thus the more exposure your various sponsors receive), the amount of revenue that is realized through endorsements far surpasses on-the-course tournament earnings. Jim Furyk, for example, is currently ranked second in the world rankings and is represented by Andrew Witlieb, the former Vice President of Golf Management at SFX, and one of the founders of Goal Marketing, LLC, a “full-service sports marketing company specializing in the marketing and management of high-profile personalities and brands.”

Witlieb has done an exceptional job aligning Furyk with a variety of corporate sponsors, while concurrently creating lasting relationships that have paid dividends for his 36-year old client. In 2006, for example, Furyk’s PGA Tour earnings exceeded $7.2 million. However, according to Witlieb, Furyk’s off-course income this year will be between $10-11 million, a figure that includes appearance fees (according to Hamilton, “PGA Tour players may play in four non-PGA Tour events per year that offer financial incentives—as much as $750,000 each”). However, the lion’s share of Furyk’s off-the-course pot will result from deals negotiated by Witlieb. The most lucrative one is a contract with golf equipment maker Srixon, which is paying him roughly $25 million over five years to use its products and be a primary company spokesman. Witlieb has also arranged long-term deals with companies such as Exelon (an electric utility company), Marquis Jet, Johnny Walker Collection, Ahead Hats and Chiliwear Apparel (which manufactures the “Jim Furyk collection”). Finally, Hamilton notes that Furyk has arrangements with Aleve (headache medicine), Golf Magazine and Electronic Arts—sponsors that “don’t have logo space with Furyk, but have rights to use his “likeness” in advertising. Hamilton writes that Witlieb “hopes to add an automaker and watch company to Furyk’s portfolio.” Says Witlieb: “[Furyk’s] very well known by the average golf fan, but we want to move him to where he’s more well known by casual sports fans in the U.S. I think we’re getting there, though. Sometimes going with nontraditional companies is the way to go.”

One point to ponder: One, while Witlieb’s vision for Furyk is exemplary, there is always a concern relating to the issue of a player’s time management. This is something that Woods’ agent, Mark Steinberg of IMG, alluded to in reference to his client’s falling out with American Express. Simply put, a player’s agent/manager must always be mindful about not over-booking his client, not monopolizing his time with off-the-course commitments, and about respecting and listening to his client’s desires. Hamilton writes that Furyk is involved in six television commercials, for example. Overkill? Is Furyk possibly spending too much time and energy off the course? It’s a question of balance that many players and their managers struggle with, and one that quickly plagued this year’s Masters champion, Zach Johnson, and specifically his SFX agent Brad Buffoni. Since his victory in April, Johnson has received generous offers to play in Germany, England, China, South Korea and Japan, according to Buffoni, although he’s turned them all down. Why? “I don’t need much to keep me happy,” Johnson said.

This may be well and good, but Johnson and Buffoni may not want to completely miss out on the marketing and other corporate opportunities now afforded to world-class golfers. Major wins like Augusta, as with the economic environment that allows corporations to splurge on spokesmen like Furyk in the first place, can be fleeting.

–Jason G. Wulterkens

6 replies on “Product diversity rules the minds of PGA Tour player agents”

Jason, you bring up a very interesting point with respect to the balance between devoting enough time to the sport and outside the game with endorsements. While it’s a tough balance, as an agent, you have to love this problem. All this means is that your client is playing very well. Any competent agent will take advantage of this type of situation for his or her client and maximize these opportunities to the fullest extent without exceeding his client’s wishes.

It seemed that Amex and Tiger are headed two different directions, Amex wants more experiental connections with their Athletes and cardholders and Tiger seems to not want to allow this “peek” into his private life. With this opening in his schedule don’t be surprised to see more golf course design contracts emerge. Course visits during design and construction phases can be made on his schedule and in an anonymous fashion, something it seems Tiger craves these days.

On the note of compensation, how do you think players are going to comepensate their staffs (particularly caddies)with their deferred Fedex Cup bonus money and do you think exposure during the Fedex Cup events will raise the bar with their ability to earn endorsement money?

Good questions Jody. I’ll delve into the FedEx deferred compensation problem soon. What kind of added exposure it gives remains to be seen. Personally I’m very skeptical how well the new “playoff” system will be received by the fans. If it’s not a hit with the fans, I can’t see it translating into much more endorsement money for the eventual winner. Round 1 is this weekend with the Barclays, but Tiger is skipping the event. So right off the bat the “playoffs” will not capture the casual fan.

As per golf course design for Tiger, I think you’ve nailed it. He’s got two very distinct projects at the moment (one in Dubai, the other in North Carolina). I think in time, Tiger will excel at this in ways that Nicklaus, Palmer and Norman did not. And indeed, perhaps Woods is more than happy to lose various sponsors if it means more anonymity and free time to pursue other business endeavors.

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