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Masters Prestige Seen as Reason IBM Stays While CEO Excluded

April 5 (Bloomberg) -- Those watching the Masters Tournament are the reason why International Business Machines Corp. isn’t speaking out about its new chief executive officer possibly breaking the gender barrier at the Augusta National Golf Club. Bloomberg's Scott Soshnick reports on Bloomberg Television's "InBusiness With Margaret Brennan." (Source: Bloomberg)

Those watching the Masters Tournament are the reason why International Business Machines Corp. (IBM) isn’t speaking out about its new chief executive officer possibly breaking the gender barrier at the Augusta National Golf Club.

The tournament draws an audience that includes “every CEO in America,” said Scott O’Neil, president of Madison Square Garden (MSG) Sports, who added IBM won’t jeopardize its much-desired sponsorship in a battle over membership for Virginia “Ginni” Rometty, the company’s chief since January.

IBM, Exxon Mobil Corp. and AT&T (T) Inc. are sponsors for the Masters, which began today at Georgia’s Augusta National, where no woman has been offered membership since its founding eight decades ago. Historically, the club has offered a membership to the CEO of IBM, allowing him to don the club’s green member blazer.

The status, visibility and reach of sponsoring the highest- rated golf major is too valuable for IBM to criticize the all- male membership -- or anything else -- at Augusta National, which limits television commercials to four minutes an hour, about half of most tournaments, and allocating all of that time to sponsors, according to sports and marketing executives.

Photographer: Andrew Harrer/Bloomberg

Virginia "Ginni" Rometty, chief executive officer of International Business Machines Corp., left, talks to Ron Kirk, U.S. trade representative, at the U.S.-China Business Roundtable at the Chamber of Commerce in Washington, D.C., U.S., on Tuesday, Feb. 14, 2012. Close

Virginia "Ginni" Rometty, chief executive officer of International Business Machines... Read More

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Photographer: Andrew Harrer/Bloomberg

Virginia "Ginni" Rometty, chief executive officer of International Business Machines Corp., left, talks to Ron Kirk, U.S. trade representative, at the U.S.-China Business Roundtable at the Chamber of Commerce in Washington, D.C., U.S., on Tuesday, Feb. 14, 2012.

“There aren’t many events that pause the crazy world we live in -- and this does,” O’Neil, who runs basketball’s New York Knicks and hockey’s New York Rangers, said in an e-mail. “History and heritage matter.”

Steve Ethun, a Masters Tournament spokesman, declined to provide details of its agreements with sponsors.

Sponsorship Estimate

Rick Burton, a former chief marketing officer for the U.S. Olympic Committee and now a professor of sport management at Syracuse University, said a Masters sponsorship probably costs at least $10 million annually.

Daimler (DAI) AG’s Mercedes unit and Rolex are the tournament’s global sponsors.

Augusta National is building a multistory hospitality venue, which is scheduled to be completed by the 2013 tournament. It won’t be open to the public, and, according to Ethun, only companies approached by the club will be able to use what the Augusta Chronicle said would be an almost 90,000 square-foot facility.

The Masters is televised by Walt Disney (DIS) Co.’s ESPN and CBS, which under a guideline that’s unique to marquee sports broadcast contracts cannot cross-promote programming during the event. In addition, there are no affiliate breaks and no local commercials, former CBS Sports President Neal Pilson said in a telephone interview.

Photographer: Streeter Lecka/Getty Images

Augusta National Golf Club chairman William Porter Payne, right, with honorary starter Arnold Palmer after his tee shot on the first hole during the start of first round of the 2012 Masters Tournament at Augusta National Golf Club on April 5, 2012 in Georgia. Close

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Photographer: Streeter Lecka/Getty Images

Augusta National Golf Club chairman William Porter Payne, right, with honorary starter Arnold Palmer after his tee shot on the first hole during the start of first round of the 2012 Masters Tournament at Augusta National Golf Club on April 5, 2012 in Georgia.

‘Prestigious Association’

“It’s a very prestigious association for the sponsors,” said Pilson, who is now a television industry consultant. “You have the opportunity in an uncluttered format to present your message to an audience that is large, is committed to golf and normally is very excited about the competition and the programming.”

The final round of last year’s Masters, won by Charl Schwartzel, drew a 9.5 rating, about the same as the average for last year’s World Series between the Texas Rangers and St. Louis Cardinals.

According to IBM, Rometty plays golf, though not frequently. She inherited the sponsorship from predecessor Sam Palmisano.

Billy Payne, Augusta National’s chairman, at his annual pre-Masters press conference yesterday said the issue of who gets invited to join is “subject to the private deliberations of the members.”

Augusta wouldn’t provide a membership list. A 2010 partial list obtained by Bloomberg News and 2004 documents published by the Augusta Chronicle and USA Today show the last four IBM CEOs were members, beginning with John R. Opel, who ran the company from 1981 to 1985 and died last year.

IBM’s Sponsorship

IBM is featured in the tournament’s television commercials and runs its website, mobile-phone applications and media technology. Palmisano, 60, serves on Augusta’s technology tournament committee. He remains IBM’s chairman, a role Rometty, 54, probably will assume upon his retirement.

Augusta sets its own rules as a private club and has resisted calls for change. In 2002, when activist Martha Burk demanded that the club add female members, Augusta opted for no commercials because it didn’t want sponsors embroiled in the controversy. Augusta didn’t have a black member until 1990, when it extended an invitation to Gannett Co. television President Ron Townsend, who still belongs.

“The history behind this tournament just makes it so special,” four-time Masters winner Tiger Woods said during his pre-tournament media conference two days ago.

Edward Barbini, a spokesman for Armonk, New York-based IBM; Kimberly Brasington, a spokeswoman for Exxon (XOM); and Brad Burns, an AT&T spokesman, all declined to comment on the sponsorships.

‘Measure of Exclusivity’

“Golf targets their consumers,” said Burton, referring to the three companies. “There’s a measure of exclusivity and it isn’t over-commercialized. You have a much better chance of standing out.”

Michael Lynch, the former head of global sponsorship for Visa (V) Inc., which sponsors the Olympics and soccer’s World Cup, said via telephone that a Masters affiliation is among the most sought in sports for one reason.

“The decision-makers who do the deals in each of the sponsor categories watch,” he said. “It’s as coveted an event as is out there.”

To contact the reporter on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

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