Greg Norman: All Business
It's a steamy summer morning and Greg Norman is itching to play golf. After back pain forced him to withdraw from the PGA Championship in mid-August, Norman is eager to walk 18 holes at the Medalist Golf Club near his Jupiter Island (Fla.) home to see if he has sufficiently recovered to compete in the Jeld-Wen Tradition Champions Tour tournament in Aloha, Ore., the next week.
But the round is full of interruptions -- the kind any golf-playing CEO would appreciate. As Norman approaches the 12th hole, his cell phone rings with a call from Reebok International CEO Paul Fireman. Norman retreats to the shade and spends 20 minutes discussing Adidas-Salomon's pending buyout of Reebok -- specifically, how it might affect the Greg Norman clothing line Reebok produces. On the next hole, Bart Collins -- who oversees the day-to-day affairs of Norman's myriad business ventures -- zooms up in a cart and pulls his boss aside for an impromptu meeting.
After he putts out on No. 18, Norman can banish any thoughts of hitting a few more balls on the range. Instead, he heads directly to the clubhouse dining room, where a wine company executive is waiting to give him a final tasting of the new line of Greg Norman California wines that will hit retail shelves in the fall. After Norman murmurs his approval of the five varietals he's given to taste, he dashes off to dinner with the ghostwriter of a Simon & Schuster book he's working on for release next June. A golf instruction guide? That was the old Norman. In this book, Norman plans to offer management tips based on his experiences as a pro golfer and entrepreneur.
Despite winning 86 tournaments over his 29-year pro golf career, Norman might never shake the images of his collapse in the 1996 Masters, where he blew a six-stroke lead and lost to Nick Faldo by five strokes, or his failure to win more majors than his two British Opens. But in the business arena, Norman has achieved a level of success matched by few other golfers. As head of Great White Shark Enterprises Inc., Norman presides over a sprawling empire that spans everything from golf course design to winemaking to turf grass.
More Hits Than Misses
His apparel line, the Greg Norman Collection, rings up nearly $200 million in annual retail sales, making it one of the most popular clothing lines endorsed by any athlete. His Greg Norman Estates, a six-year-old joint venture with Foster's Wine Estates, now sells 230,000 cases of Australian wine a year -- a strong performance that has inspired Foster's to launch California wines under the Norman label as well. Medallist Developments, a joint venture between Norman and Macquarie Bank Ltd. of Australia, currently has more than 10,000 golf course homes under construction in the U.S., Mexico, and Australia, and is mulling an expansion to other parts of the globe. Setbacks -- such as a Greg Norman-themed restaurant and a Paul Newman-like line of foods -- have been relatively rare.
Norman's payoff has been huge: Claiming he was "virtually broke" early in his playing career, Norman, 50, now oversees a business empire generating more than $300 million in annual revenues. Although he's more than a decade past his playing prime, Norman still exudes a magnetism that appeals even to consumers who have never picked up a golf club. "Norman has done what few athletes are able to do, to transcend his sport," says Eldon Ham, an adjunct professor of sports and law at the Chicago-Kent College of Law. "There's a little Crocodile Dundee in him, and in marketing, attitude is one of the traits you're selling."
It has been quite an odyssey for Norman, who as a young tour pro showed little interest in business matters. In Shark: The Biography of Greg Norman, author Lauren St. John writes that a younger Norman sometimes fell asleep in meetings with prospective business partners -- "bored rigid by the plotting and planning he paid others to do." He only took interest after a couple of deals went awry. (Norman takes issue with this characterization.) As he began to win tournaments, he admits he paid a price for not paying closer attention to how other people handled his affairs. "Typical athlete, I got f---ed over by my agent and found myself in trouble with the Australian taxation office," he says. "But I learned an important lesson: Take control over your own money, your own destiny."
Even after signing with über-agency IMG in the 1980s, Norman grew dissatisfied with the hefty fees -- 10% of winnings and 25% of merchandising income -- and what he felt was IMG's fast-buck mentality. "They don't take the long view because they're only working on a three- or five-year contract, and there's always another star right behind you," he says. "I didn't want to be playing golf beyond 65 because I had to." Tensions came to a head in 1993 after IMG demanded a cut of the $44 million Norman reaped as an early investor in clubmaker Cobra Golf after its sale to American Brands -- a deal that Norman insists he'd negotiated himself.
Going It Alone
So in the early 1990s, Norman, his popularity soaring, chose not to renew his contract with IMG and began managing his own affairs. Known for being hard on caddies, swing coaches, and disruptive galleries, he proved to be just as tough as a businessman: Biographer St John notes that Norman could be stinting with his praise and once didn't speak with his former top executive, Frank Williams, for three months during a tiff. (Collins says Norman has mellowed.) Some business partners say Norman can be just as exacting with them. "He's incredibly demanding," says Fireman. "He demands great product and innovation." But the Reebok CEO gives him credit for thrusting himself deeper into decision-making than most athletes -- everything from approving potential clothing designs to long-term strategy. "He truly wants to build his brand for the long term, and that's a big difference from most athletes," Fireman says.
Over time, Norman says he made a point to study -- and learn from -- the mistakes of other pro golfers-turned-businessmen. For example, Norman believes Arnold Palmer might have cheapened his image by being too indiscriminate with his endorsements. "I could have endorsed car washes and underwear, but things like that don't build up your brand," he says. After studying Jack Nicklaus' well-publicized problems -- a soured real estate venture left Nicklaus financially overextended in the mid-1980s -- Norman decided to sharply limit how much of his own money he put into deals. "Jack was a strong enough brand that he did not need to put his own neck on the line," he says. In both his real-estate venture with Macquarie Bank and his winemaking partnership with Foster's, Norman put up not a cent -- and received a 30% equity stake in each just for lending his name and image. Late last year, MacGregor Golf sweetened its deal for Norman to promote its new Mactec driver and other golf clubs by giving the Shark stock options on top of his endorsement fee, says MacGregor CEO Barry Schneider.
Still, not all of Norman's ventures have panned out. In Australia, he scrapped plans to introduce a line of pasta sauces and other foods after the products generated mixed results in test markets. Collins says the food line was designed to be nothing more than a charitable venture à la Paul Newman, but "the message that it was cause-related never got through."
After joining with restaurateur Todd English to create six Greg Norman's Australian Grille restaurants, only one -- the original in North Myrtle Beach, S.C. -- has opened. Collins acknowledges that Norman chose the wrong partner for the restaurant, which bled red ink from the beginning. But under a new management team, the restaurant has managed to turn a profit in each of the past two years, and Collins says Great White Shark Enterprises is planning to seek a major restaurant chain to expand the Australian Grille concept to other markets.
While the demand for Norman's golf course design service remains strong, critics contend his record as a course architect is mixed. Despite charging a relatively hefty $1.25 million design fee, Norman says he currently has about three dozen courses in some phase of development -- a strong showing at a time when many other architects are scratching for business. To his credit, Golf Digest named his Doonbeg Golf Club, located on Ireland's rugged western coast, the "Best New International Course" in 2002. In the U.S., Golf Digest has put at least three Norman designs -- Shark's Tooth in Lake Powell, Fla., TPC at Sugarloaf in Atlanta, and the Reserve in Pawleys Island, S.C. -- on its best new course lists over the past decade.
But Norman has also seen two courses he built reworked or bulldozed by developers who deemed his layouts too challenging for average golfers. That was the case in Scottsdale, Ariz., where he designed a resort course known as Stonehaven for Lehman Brothers Inc. After Lehman sold the development to Discovery Land Co. of San Francisco -- which immediately converted it to a private club -- Discovery determined that the design was too demanding for members. "We saw the course as not being playable enough so we tore it up and started from scratch," says Discovery partner Steve Adelson. While the Norman layout had a mere 42 acres of fairway -- meaning most wayward shots ended up in the desert -- architect Tom Fazio created a much more forgiving 90-acre tract.
Such setbacks have been the exception throughout Norman's career as a businessman. He says his ultimate goal is to emulate the success of René Lacoste, a tennis star-turned-clothing designer from the 1930s whose legacy is the ubiquitous alligator logo. "Not many people know him for what he was -- a good tennis player, not a great tennis player," says Norman. "But he created a brand that lives on. That's what you want to do, to leave a legacy, a trust in perpetuity for your children." Norman hopes that will be his final conquest.
By Dean Foust