Money Clip: Logo Lotto
What pro golfers earn from their endorsements
How much do you think he makes for wearing that hat? Nearly every time I watch golf on TV in a clubhouse or bar, it seems somebody wants an answer to that one.
This season, with Jim Furyk suddenly sprouting logos for 5-hour Energy drink, it seems curiosity about sponsorships got an additional, um, boost.
Endorsement deals for most players are confidential, though my colleague Ron Sirak makes educated guesses in his annual feature on Golf's 50 Top Earners. Nos. 1 and 2 last year, Tiger Woods and Phil Mickelson, "are on another planet entirely," as Nashville sports agent Alan Bullington puts it. Sirak pegs their 2011 off-course earnings at $62 million and $38 million, respectively. Guys like Furyk or Davis Love III make about $7 million a year beyond prize money. A younger player like Brandt Snedeker, with three tour wins but no majors or Ryder Cup exposure (yet), is closer to $1.5 million.
Furyk's agent, Andrew Witlieb, with the Legacy Agency, declined to say how much his client is making from 5-hour Energy. I spoke with a pair of golf-industry members who estimated the deal is worth $1.2 million to $1.5 million a year. Witlieb describes the jostling among golfers for 5-hour Energy's business as "a real dogfight," with agents for several top players "pitching really, really hard" to win the contract. The drink "dominated NASCAR [sponsorships] and went from $7.5 million in sales to more than $1 billion," he says. "One area they felt they needed to grow was the 30- to 45-year-old businessman, and that's why they turned to golf."
Furyk wears the company's logo on the front of his hat and the left side of his chest, known as the most valuable real estate on a golfer's body. These might go for $250,000 to $2 million annually for a regular tour member, $125,000 to $500,000 on an LPGA or Champions Tour player, and $25,000 to $50,000 for a Web.com Tour player, agents say. A logo on the side of the hat or collar could be worth $5,000 on the low end to $200,000 for PGA Tour players.
Nike is the unusual sponsor in that it demands logo exclusivity from its players. Whether it's Tiger Woods or Jhonattan Vegas, you'll see only the famous swoosh logo on their bodies when they play. TaylorMade is also known for keeping outside brands to a minimum on its players. These companies pay extra for that--about what the golfers could make selling the space to other sponsors, agents say.
It's worth noting that golfers are not getting paid purely for wearing logos when they compete. A portion of their endorsement income comes from personal appearances at golf outings and other events, plus the use of their image in advertising. A typical player with three or four endorsements will need to make somewhere between six and 15 full-day appearances each year, agents say. A general rule is the better the player, the more he or she makes in endorsements. Outgoing, colorful players like Bubba Watson and Boo Weekley tend to do better than quieter golfers like Webb Simpson and Jason Dufner, all other things being equal. Younger players generally make more than older players of comparable skill, says Mac Barnhardt, CEO of Crown Sports Management, which represents Love and 20 other pros.
It's not unusual for an endorsement fee to triple or even quadruple when a player starts winning tournaments or makes the Ryder Cup team. "I think that's the way it should always be," Barnhardt says. The "carrot" of an incentive clause is "good motivation to go practice more."
To hear some agents tell it, though, those kinds of deals have declined in the past couple of years. Companies looking to control costs need to know exactly how much they're spending.
There's no question corporate sponsors are taking a harder look at their expenses, in terms of amounts and what they get for it. "You have to show return on investment," says Alastair Johnston, vice-chairman of sports agency IMG. "It may have been much more cloudy 10 or 15 years ago--you might have integrated some tangible and intangible benefits and called it a deal--but not today."
In other words, Furyk had better move that energy drink among 30- to 45-year-olds or...oh, let's not kid ourselves. The man won $10 million in the 2010 FedEx Cup. He'll be just fine.
LESS WAS MOORE
It's a measure of how pervasive sponsorships have become that, in 2009, Ryan Moore generated a ton of media coverage for not wearing any logos. He wasn't trying to make a statement, says his brother and agent, Jeremy Moore. He was simply "recalibrating" after a couple of years with sponsors, letting him "focus on forming partnerships with some start-ups and equity deals." Ryan, 29, has since signed with True Linkswear, a shoe company he co-founded, financial services firm Shift4 and Adams Golf. Which is nice for him, but kind of a shame for fans who liked seeing one player who wasn't a walking billboard.