Women in green jackets aren’t the only change at Augusta National Golf Club as it prepares to host the Masters Tournament next week.
Along with its first female members, the 80-year-old private club in Augusta, Georgia, has its initial corporate- hospitality pavilion and a newly hired woman executive to help chairman Billy Payne expand the business of golf’s opening annual major championship. In the past seven years, Payne has forged new sponsorship and broadcast deals, licensed a Masters videogame, and built $13 million of facilities for corporate partners and club members to entertain clients.
Augusta National’s members include Berkshire Hathaway Inc. (BRK/A) Chairman Warren Buffett and Microsoft Inc. (MIC) co-founder Bill Gates. After decades of reflecting the genteel values of Bobby Jones, Augusta National co-founder and golf’s lone Grand Slam champion, this Who’s Who of American business is starting to run its signature tournament like a business.
“This is a natural progression of the recognition that the Masters is a commercial enterprise,” said Casey Alexander, a golf industry analyst and research director of New York-based Gilford Securities. “The world is not the same as when Mr. Jones ran the Masters. Things that do not evolve die.”
Jones and his successors charged patrons, as spectators are called, low prices and forbade sponsors’ logos on the grounds. The cost of a Masters ticket, or badge, for all four rounds starting April 11 is still $250, compared with $400 for this June’s U.S. Open. Corporate signs remain absent, and to 100 million global TV viewers who watch the tournament with few commercials, the Masters seems unchanged. Hidden from the cameras’ view are more than 100,000 square feet of new corporate-hospitality buildings.
While referring often to Jones, the 65-year-old Payne operates as he did when leading another tradition-laden sports event: the Olympics. The 1996 Games he oversaw in Atlanta were the most sponsor-intensive in history.
The Masters’ growth has trumped maintaining club tradition under Payne, in leading an institution that’s been slow to change. Augusta National admitted its first black member in 1990. The club staged the 2003 and 2004 Masters without sponsors, after the companies were pressed by a group of women’s organizations to support ending all-male membership.
Payne’s ability to leverage and accommodate sponsors may explain why he admitted former Secretary of State Condoleezza Rice and philanthropist Darla Moore as the club’s first female members, according to Marcia Chambers, who has studied Augusta National and written about golf-club discrimination. The August announcement of their membership came four months after a Masters-week controversy over the absence from the rolls of Ginni Rometty, chief executive officer of Masters sponsor International Business Machines Corp. (IBM), whose four male predecessors were all club members. Payne repeatedly refused to discuss membership policy at his pre-tournament news conference.
“They finally did the right thing, but they acted on corporate need,” said Chambers, author of “The Unplayable Lie: The Untold Story of Women and Discrimination in American Golf.” “Steps had to be taken to admit her.”
Steve Ethun, a spokesman for Augusta National; Ed Barbini, a spokesman for IBM; Mark Siegel, a spokesman for Masters sponsor AT&T Inc. (T); and Alan Jeffers, a spokesman for the tournament’s third U.S. sponsor, Exxon Mobil Corp. (XOM), declined to comment on the relationship between sponsorship and membership.
In contrast to the noisy debate of a year ago, the arrival last month of a high-ranking female executive at Augusta National occurred almost without notice. Casey Coffman, formerly of Madison Square Garden Co., (MSG) became the club’s senior director of business affairs, Payne’s lieutenant on Masters sponsorships and broadcast matters.
Coffman, whom an Augusta National spokesman declined to make available for an interview, was a senior vice president for corporate strategy and development at MSG and, prior to that, chief operating officer of Hicks Sports Group, parent of baseball’s Texas Rangers and hockey’s Dallas Stars. She joined recent Payne recruits including Mark Perrotta, the ex-chief of product development and design at Walt Disney World who heads Masters merchandising, and John Johnstone, a former international vice president for Ritz-Carlton Hotel Co. who’s director of club operations.
This new management team reflects Payne’s agenda, as does his elevation of an insider, Will Jones, to Augusta National’s executive director, the top staff position. The 46-year-old Jones, like Payne a former University of Georgia football player, was Coffman’s predecessor as business affairs head. An executive who made his name expanding the business of the Masters will in September succeed the retiring Jim Armstrong, 65, who’s held the job since 1979.
Until Payne’s arrival, lodging on the grounds, 10 white buildings known at the club only as cabins, was for the use of members, with each bearing the names of distinguished ones, such as the Eisenhower Cabin.
In 2007, Augusta National began building cabins for sponsors. The first three, near the 10th hole, were for IBM, Exxon Mobil and AT&T. Their average size is about 3,300 square feet, according to county tax assessor records, and they are valued at a total of $1.4 million.
In 2009, the club added facilities off the first fairway for two new international sponsors, Rolex and Mercedes-Benz, and its U.S. broadcaster since 1956, CBS. (CBS) They’re valued at a total of $2.7 million by the tax assessor and encompass 16,500 square feet.
The Masters, said sports business consultant Peter Stern, is “the Holy Grail of sponsorships, because of the prestige of the tournament and the limited supply of Masters badges.” A company’s ability to invite top customers to golf’s most legendary tournament -- which is also one of sport’s toughest tickets -- is a feat, according to Stern, president of Strategic, a New York-based sponsorship advisory company.
For years, sponsors griped about their limited ability to entertain customers on Augusta National’s grounds. Golf’s other majors, the U.S. Open, British Open and PGA Championship, allow sponsors to pitch giant hospitality tents at the tournament. Masters sponsors, for the most part, had to go off-campus.
An archipelago of corporate-hospitality centers has formed near the course. Masters sponsors pay an estimated $18 million a year for the affiliation, according to sponsorship research firm IEG. They didn’t like taking guests off the grounds, according to one person familiar with their thinking who didn’t want to be identified because the matter is private. Nor did Payne want so many corporate-entertainment dollars going to outside facilities, the person said.
Payne built the sponsor cabins to solve the problem and, in 2010, added a “members retreat” in the woods near fabled “Amen Corner“ -- the 11th to 13th holes. Club members could bring guests to the 2,906-square-foot facility, valued by the county assessor at $452,171, to dine in a mini-restaurant and watch play on flat-screen TVs. Ethun confirmed the assessor’s figures.
Sponsors and members wanted still more corporate- entertainment capacity, as Payne explained in announcing the facility he built to accommodate them.
“In response to repeated requests from our members and companies with whom we have done business, in many cases for decades, we built Berckmans Place,” he said at last year’s pre- tournament press conference. “It offers the enhanced level of hospitality requested and allows us to provide the Masters experience for a greater number of golf fans.”
That week, Jack Nicklaus, winner of a record 18 golf majors, and Lynn Swann, an inductee of the Pro Football Hall of Fame, helped present the partially completed, 90,000-square- foot, column-fronted complex, with multiple dining options inside and putting greens outside, to sponsors and fellow members. All 400 weekly passes, costing $6,000 each and providing Masters badges and Berckmans Place access, were sold.
The addition of Berckmans Place has given the Masters-week economy in Augusta a boost, according to Diane Starr, whose Corporate Quarters Inc. rents area homes and condominiums for prices ranging from $3,000 to $30,000. Berckmans increased the supply of Masters badges for up-market patrons, in turn helping boost rental prices this year by as much as 15 percent, she said.
“It increased the market for the larger executive homes,” said Starr, who’s been in the Masters rental business for more than 30 years. “It’s a seller’s market again because of the demand.”
Payne has said the tournament’s new business initiatives will fund the club’s goal of helping golf grow. The club created the Masters Tournament Foundation in 2011 to fund programs expanding the sport.
“Berckmans Place will be a very substantial contributor,” Payne said.
In a January 2011 announcement that the club, in conjunction with EA Sports, had created a Masters video game, Payne said all licensing fees collected by Augusta National would go to the foundation.
Augusta National contributed $2.9 million to that foundation in 2011, the first year for which it filed federal financial reports. The foundation received $6.8 million of contributions in 2011 and bestowed $1.7 million to golf-growth programs.
The $13 million of corporate-hospitality facilities represents only a portion of the $18 million worth of construction on Payne’s watch, versus $2.6 million during predecessor Hootie Johnson’s eight-year tenure, according to tax assessor records. The club has also added offices, shops and other structures.
The next major developments may be off-campus. Augusta National has spent more than $50 million buying properties in a bordering neighborhood, according to tax assessor records compiled by a longtime resident, William Hatcher. The club has razed the purchased homes and uses the assembled 118 acres for Masters parking.
Hatcher, a 66-year-old semi-retired contractor and one of the last holdout homeowners, opined in a December interview that something bigger may be in the works, saying, “My lot is off the third fairway of the club’s next nine holes.”
He sold his 1,800-square-foot house to Augusta National for $950,000 later that month and has ceased speculating about the club’s plans. When contacted this week, Hatcher said silence was a condition of the sale.
To contact the editor responsible for this story: Michael Sillup at email@example.com