The Money Behind The Masters

The Masters' tagline has been "a tradition unlike any other" for years. The validity of this claim aside, the first major championship of the year at Augusta National Golf Club is unique to the rest of major sports and golf as a whole for the simple fact that it does not pursue the most money possible.

Augusta keeps many of its financial dealings under wraps, but the Masters reportedly generated revenues of roughly $115 million in 2015, according to a Golf Digest report. The club also leaves millions of dollars on the table when you consider the relatively cheap ticket prices, insanely inexpensive food, and absence of online merchandise.

So where does the money come from and where does all of it go?

Augusta

The most basic revenue breakdown is as follows: merchandise ($47.5 million); tickets ($34.75 million); international TV rights ($25 million); and concessions ($7.75 million).

Augusta pours millions and millions of dollars into the course every year. Another large chunk of the money goes directly to the players. The Masters will shell out a total of $11million in prize money this year, which is the second-highest on tour.

Masters tickets, one of the largest revenue generators despite their relatively low costs, are usually won and purchased through a lottery system. But tickets always end up on secondary markets. Four day badges for the Masters had been selling for about $6,500 right up until the start of Thursday's first-round, on various ticket sites.

One of the most obvious ways that Augusta leaves money on the greens is through its now iconically-cheap food and drink offerings.

Once again, the amazing concession prices at the Masters. Important Note: Today's badge alone is going to cost you about $1,750. pic.twitter.com/DGhfsy4gJN

— Darren Rovell (@darrenrovell) April 5, 2018

Television

CBS (NYSE:CBS) will broadcast weekend coverage of the Masters for the 63^rd year in a row. The network and Augusta have worked on one-year deals pretty much the entire time, and look as if they will continue this relationship in perpetuity.

Interestingly, neither CBS nor Augusta reportedly make money from their relationship. This breakeven partnership is based on mutual prestige, which seems hardly enough when looking at the massive 12-year, $1.1 billion deal Fox (NASDAQ:FOXA) and the USGA signed in 2013.  

The 2018 Masters also marks roughly 10 years since ESPN took over Thursday and Friday coverage. Details about the deal aren't clear, but ESPN certainly dedicates a lot of resources to its nearly around-the-clock coverage.

Fans can also watch nearly all of the coverage on Masters.com, which shows far more total hours than ESPN and CBS.

Sponsors

Delta (NYSE:DAL) became the newest official sponsor of the Masters last October. The airline's addition brought the overall total to six. UPS (NYSE:UPS), AT&T (NYSE:T), IBM (NYSE:IBM), Mercedes-Benz, and Rolex all spend between $6 and $8 million a year, but have zero signage in view on the property.

This investment grants the Masters' partners the rights to split four minutes of ads per broadcast hour, which is far less time than most other sporting events. 

Three of the biggest sportswear giants, Nike (NYSE:NKE), Adidas (OTC:ADDYY), and Under Armour (NYSE:UAA) will also all be on full display during the four-day tournament. Lastly, many of the players themselves will have a slew of corporate logos, from KPMG and other financial firms to golf companies such as Callaway (NYSE:ELY), all over their bodies.

Ratings

Of all the mystique surrounding the Masters, one thing that seems all too clear is that both CBS and ESPN hope this year's tournament grabs better ratings.

The Masters suffered it lowest TV ratings in 13 years in 2017. But this year's event promises to be different because the sport's biggest star, Tiger Woods, is back at Augusta—and this time he looks healthy.

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