Golf's Dirty Little Secret
The recent flap over appearance fees obscures the fact that these deals are rampant in the game
The dispute over whether or not Greenbrier owner Jim Justice paid Tiger Woods and Phil Mickelson seven-figure fees to play in his PGA Tour event in violation of tour rules is almost as silly as determining home-field advantage in the World Series by who wins the All Star Game.
Appearance fees are the dirty little secret of the PGA Tour, and a poorly kept one at that. They have existed pretty much since Spalding paid Harry Vardon a hefty sum to tour the United Sates playing its Vardon Flyer golf ball at the beginning of the last century in what was likely the game's first endorsement deal.
While much is made of the money thrown at top players by sponsors on other tours to get them to play tournaments outside the United States, the moral high ground taken by the PGA Tour is shaky at best. There are more ways to get around the ban on appearance fees than there are agents in the William Morris Agency.
Woods is a perfect example. He was won -- not played in, but won -- 29 tournaments sponsored by companies with which he had business relationships, including Buick, American Express, AT&T and Accenture, as well as Deutsche Bank, the European Tour stop in Dubai and the Arnold Palmer Invitational, which is run by his former management company, IMG.
OK, so Tiger gets -- or in all of these cases, used to get -- $5 million to $8 million a year from those companies as an endorsement partner and then plays in their tournament. Is that not an appearance fee? If it looks like a duck, well, quack.
And these kinds of business relationship have grown during the Tiger Woods Era as non-golf companies -- financial services firms, insurance companies, pharmaceuticals and other high-end multinationals -- have come to realize the enormous value of professional golfers.
Think of what golfers bring to the table as business partners. There is a reason why more golfers have endorsement deals than any other type of athlete. Really, how many major league baseball players do you see walking around wearing corporate logos?
Golf is as close to a risk-free investment as you can find in sports marketing. First off, there are no strikes or lockouts in golf. If you pay, there will be play. And there are no uniforms in golf so players become walking billboards. Slap your logo here.
For the most part -- with the notable exception of the scandal that cost Woods tens of millions and, to a lesser extent, John Daly -- there are no bad headlines in golf. The image of the players is as close to squeaky clean as you can get in sports.
Also, golfers can be used in corporate marketing in a way no other athletes can. You can play golf with Luke Donald at a corporate outing or in a pro-am, but you are not going to put on the pads and toss the old pigskin around with Peyton Manning.
As this message has sunk in, the corporate world has responded. The Royal Bank of Canada, for example, has a bunch of players under contract -- Donald, Jim Furyk, Matt Kuchar and Ernie Els among them -- and sponsors two stops on the PGA Tour. Are those appearance fees?
And in addition to these direct financial relationships with players, there are other ways to get around the appearance fee ban. It is not illegal for a sponsor to offer a player $100,000 to do a 30-minute walk-through at a cocktail party the Tuesday before the tournament. And gee, if he happens to stay and play the event, well that's just a lucky coincidence.
Or what if a corporation makes a hefty donation to a player's foundation? Might not the player then feel some sort of obligation to play in that firm's PGA Tour event? Happens. Is that an appearance fee?