Augusta National masters art of minimal sponsorship

Reuters News
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Posted: Apr 06, 2016 10:50 AM

By Rick Horrow

AUGUSTA, Georgia (Reuters) - Sports sponsorship deals, even multi-million dollar ones, follow a pretty basic process. This applies nearly everywhere, but not at the Masters golf tournament.

In most corners of the world, a property and a brand get together in a conference room. The property tells the brand how much money it will require to attach the brand's name to a team, building or event.

Negotiations follow concerning the deal's duration and payment schedule, before marketing agency reps and lawyers handle the fine print. Hands are shaken and an announcement is made.

But at Augusta National Golf Club, the permanent home of the Masters, business is conducted quite differently – and almost all of it is shrouded in secrecy.

For Masters chairman Billy Payne and Augusta National's leadership, less has always been more when it comes to attaching sponsors to one of one sport's prestige properties.

At virtually every other golf tournament on the planet, an abundance of sponsors is considered a positive – there is always room for another logo somewhere on the course.

At the Masters, which this week celebrates its 80th edition, sponsors are limited to five: global sponsors AT&T, IBM, and Mercedes-Benz, and international partners UPS and Rolex.

All five are estimated to pay upwards of $6 million annually to have zero signage in view on property, share a combined four minutes of ads per broadcast hour, and follow extremely stringent, narrow rules about how their association with the world's most exclusive golf tournament can be promoted.

Take IBM, for example. The Rochester, New York computing stalwart is responsible for developing and maintaining the Masters official website, and handheld and iPad apps, as well as providing data services and analysis, courtesy of its "Watson" mega computing system, that broadcasters use on air.

A small IBM logo sits atop the top right hand corner of each digital display, but that is as heavy handed as the branding gets.

And IBM does not swap these technology services in exchange for a sponsorship platform. To the contrary, it pays millions of dollars each year for the privilege of providing them. Why?

As Forbes has noted, "the digital platforms provided to the Masters as part of IBM's robust sponsorship of the event serve to show potential business partners the capacity of the 21st century IBM" - not the bulky business computing of old.

TARGET DEMOGRAPHIC

The Masters and the U.S. Open, which it also sponsors, are the perfect events to reach IBM's target demographic: business owners.

In 2014, Mercedes-Benz upgraded its corporate involvement at the Masters by replacing ExxonMobil as one of the tournament's three global sponsors.

Mercedes had been a partner since 2008; ExxonMobil had been a Masters global sponsor since 2005 – and true to Augusta National form, was tightlipped about its reasons for dissolving the partnership thereafter.

While the German luxury automaker also sponsors the British Open and PGA Championship, it craved the exclusivity of the limited commercial space in Masters domestic telecasts.

"The Masters is the most prestigious golf tournament in the world. It is a great honor for Mercedes-Benz to now be associated with the Masters Tournament as one of the three global sponsors," Joachim Schmidt, the company's executive vice president of sales and marketing, said at the time.

Beyond TV ads, Mercedes has capitalized on its existing relationship with former Masters champion Adam Scott on social media, and its autos are also marketed at Augusta National

Right after last year's tournament concluded, AT&T did not waste any time capitalizing on the first Masters win by American young gun Jordan Spieth, the only player the telecom giant has backed since its short-lived relationship with Tiger Woods.

Although the terms of each sponsor's agreement are not disclosed, sponsorship analyst IEG has calculated the total annual global contribution to be near $18 million, and that was before international partners UPS and Rolex joined the party.

While chairman Payne has overseen an enormous expansion of the tournament's global broadcast and digital presence, Augusta National is leaving a lot of money on its well-appointed table, but Masters sponsors are still happy to pull up a chair.

(Editing by Mark Lamport-Stokes)