Golf Digest editors picks
The Golf Digest 50

Cashing In

How Henrik Stenson won almost $20 million and why winning a major is worth WAY more than a million

February 2014

The formula devised by Mark McCormack for Arnold Palmer in 1960 and extended to Jack Nicklaus and Gary Player at McCormack's IMG agency was called the 90/10 rule: 90 percent of a star athlete's earnings came from off-course business deals, and 10 percent came from winnings. Once you establish star power on the playing field, you convert that into cash off the playing field.

That formula has held for decades in golf, and even with the massive amounts Tiger Woods has won on the golf course—more than $155 million, according to this 11th annual Golf Digest 50 money list—it reflects less than 12 percent of his more than $1.3 billion in career earnings.

But this year's ranking has several examples that the formula is beginning to change, none more glaring than Henrik Stenson, the Swedish player who lost a small fortune when he and others were swindled in the $7 billion Stanford Financial Group Ponzi scheme. Stenson won an astonishing $18,594,670 in 2013—sweeping the Race to Dubai on the European Tour and the PGA Tour's FedEx Cup with its $10 million bonus—to finish No. 5 on the GD 50.

That means that almost 87 percent of Stenson's $21-million-plus in earnings last year came with a golf club in his hand—the opposite of Woods, who has topped the GD 50 all 11 years, and No. 2 Phil Mickelson, both of whom earned more than 85 percent of their money off the course.

As for Palmer, the man for whom the model was created? He had his best year ever at the age of 84, earning $40 million, all of it off the course, thanks in part to a strong year licensing his name on products in Asia. Forty years after his last PGA Tour victory, Palmer is No. 3 on this year's list.

Consider this: Palmer won 62 PGA Tour events, including seven major championships, earning $1,861,857 in career prize money. That would have been No. 39 on just the past year's tour money list. Things have changed. No. 4 on this year's GD 50 is Jack Nicklaus, who earned $9,625 on the course and $26 million off it.

The impact of the prize-money explosion has been significant. There is so much to be won, some players are actually turning down endorsement opportunities, valuing time off more than the added cash and several days' work that the deals require each year. Also, as the PGA Tour has added stops in Malaysia and China, which increased prize money, the amount paid by some tournaments to attract big names—and not-so-big-names—has dipped. The purses, not outrageous appearance fees, now lure players to Asia, where co-sanctioned events still allow appearance fees. "Before that, Jason Dufner would have gotten a $400,000 appearance fee in China after winning the PGA. Now it's more likely $200,000," says one agent who did not want to be quoted by name because he does not represent Dufner. "In Malaysia, it would have been $500,000, and now it's more like $100,000." But in Australia, Matt Kuchar, No. 13 on the GD 50, made $500,000 in appearance fees for two events.

Also hurting some appearance-fee markets is the continued sluggishness of the European economy and its effect on that tour. "The weakness of the European economy cannot be overstated," says Clarke Jones, senior vice president and managing director of the Americas for IMG Golf. "Multinational sponsors are looking to the growing economies in Latin America and are less interested in hanging their hats on individuals. They want to get away from the vagaries of representing human beings. They're looking at multinational investing in a broad range, with organizations and governing bodies and events."

MAJOR VALUE FOR MAJOR WINS
There remains, however, a dependable way to cash in off the golf course: win one of the four men's majors. Though winning a women's major also has an impact, the harsh economic reality is that the vast difference in prize money and TV exposure makes it nearly impossible for LPGA players to make the GD 50 list. This year, only Paula Creamer, the 2010 U.S. Women's Open champion, made the list, at No. 48.

Being a major-championship winner is a gift that keeps on giving. "For the rest of her career, Cristie [Kerr] will be introduced on the first tee as a U.S. Open winner," agent Erik Stevens says of his wife, who won the 2007 U.S. Women's Open. "It's like going from being Elton John to Sir Elton John. The title never goes away."

Executive earnings

Adam Scott

Adam Scott earns $7.6 million a year in off-course income.
Photo: Walter Iooss Jr.

Thirty years ago, with much smaller purses on tour, a major winner might chase appearance fees and outings, often to the detriment of his game, in the hopes of turning the win into a million-dollar bonanza. Two days after winning the 2013 U.S. Open at Merion, Justin Rose was on the "Late Show with David Letterman" delivering the popular Top Ten list. The clip became an Internet sensation, and Rose had successfully extended his brand recognition.

According to one agent who spoke on the condition of anonymity, Rose's $1.2 million TaylorMade deal doubled in value after his Open victory. The same agent says Mickelson got a $1 million bonus from Callaway for winning the British Open. A second agent says Rose and Masters winner Adam Scott will earn an extra $3 million to $5 million annually for winning a major.

"Right out of the gate you're going to get an extra deal or two for winning a major," adds another agent, Andrew Witlieb of the Legacy Agency, whose client Jim Furyk won the 2003 U.S. Open.

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