Apr 12, 2013 at 03:46 PM
written by Adam Grossman

The Masters: A Business Unlike Any Other

Guan Tianlang has been the talk of the 2013 Masters Golf Tournament. The 14 year-old from China shot a 1-over-par 73 in his first round playing the Augusta National Golf Club. For many people, the fact that an eighth grader can shoot under 80 at this difficult course is unbelievable.

What may be more surprising, however, is how Tianlang qualified for the Masters. The tournament allows only 93 competitors – mostly highly ranked professional golfers. Yet, Tianlang earned his way into the tournament by winning the Asia-Pacific Amateur Championship (APGC). Why would the Masters, a tournament so heavily invested in tradition, allow the winner of an amateur tournament that was started in 2009 to play in the event?

Because the Masters is a Founding Partner of the APGC, and the winner of the APGC automatically qualifies for the Masters. The Asia-Pacific Amateur Championship is another example of the Augusta National Golf Club’s unique efforts to grow its business. In 2009, the Masters tournament partnered with the Asia Pacific Golf Confederation and the R&A (which operates the British Open) to host the first Asian Amateur Championship (the tournament later changed its name to the Asian-Pacific Amateur Championship). This relationship is one of the few examples of a golf tournament lending its brand as a partner to help promote another golf tournament. The Masters brand and relationships with international distributers is one of the reasons why the APGC received television broadcasts in over 150 countries. In addition, the APGC has major corporate sponsors that include IBM, ExxonMobil, and AT&T. A 14-year-old qualifying for the Masters was never part of Augusta National Chairman Billy Payne’s plan for increasing brand awareness for the APGC. Having IBM, ExxonMobil, and AT&T as either Scoring Partners or Proud Partners of the APGC was part of the plan. The Masters has relatively few global and international partners, including IBM, ExxonMobil, and AT&T – demonstrated by the three logos that pop up when one visits the Masters’ official web or mobile sites. While the Masters has global television distribution, Augusta National “only allows four minutes of commercials each hour and limits the amount of branding on the course.” It is difficult to think of another sports property that appears to limit sponsorship activation as much as the Masters. In fact, many other sports organizations, and particularly golf tournaments, take the opposite approach and allow sponsors to maximize activation.

That is what makes the APGC an increasingly valuable property for Augusta National. It allows the Masters’ Global Partners to actually maximize the number and quality of their global activations. More specifically, The APGC allows these companies to market to new consumers in emerging markets with a rapidly expanding middle class. This means that AT&T, IBM, and ExxonMobil gain exposure to far more potential customers in a part of the world where there is a tremendous need for wireless technology, business / IT services, and oil consumption. It also means that activation does not have to occur solely around the Masters in early April. Because the APGC occurs in November, the Masters’ Global Partners can more easily space out their sponsorship activation elements throughout the year.

The APGC is not the only way that Augusta National is trying to balance the number of sponsorship activation elements with meeting sponsor needs. The 2013 tournament is the official launch of Berckmans Place. Chair of Augusta National Golf Club Billy Payne described the new hospitability center where corporate partners can stay during tournament as, “a response to decades, decades, of requests by companies with whom we have been affiliated...for an upgraded level of hospitality. They were going elsewhere to get it ... so to accommodate the wishes of those companies.” It would be unthinkable that Augusta National would even consider creating these types of accommodations in the past. Building Berckmans Place is another example that the Masters has become more partner-friendly than it ever has in the past.

The Masters still has some ways to go to being a model sports property. Even as the club welcomed its first two female members, August National did not allow Virginia Rometty to become a club member for months after she took over as IBM CEO even though IBM spends millions to sponsor the Masters for months after she received the job. (Augusta National generally does not have the same policy with male CEOs.) Some companies will probably never become Masters partners because of Augusta National’s seeming reluctance to exhibit gender equality with its members.

Yet, The Masters shows that even a tournament whose brand is synonymous with tradition can and should make changes to its business – particularly when it comes to sponsorship activation. The success of Tianlang and the APGC shows what can happen when sports organizations make changes to their business model. By leveraging its brand to increase its revenue and reach in the Asia Markets, the Masters has become a better global partner to its sponsors.