The Masters Tournament At Augusta Is Leaving $269 Million On The Putting Green

The Masters is the most prestigious tournament on the PGA Tour, garnering a lot of attention from folks who typically don’t follow golf, but when it comes to earning money, the Masters comes in a distant second to the U.S. Open. This year the Masters will generate $142 million in revenue, versus $160 million for the U.S. Open based on my calculations.

The breakdown of the Masters’ $141 million includes revenue from merchandise ($69 million), badges ($39 million), international television rights ($25 million), and concessions ($8 million). Notably missing from Augusta’s revenue are domestic tv rights and sponsorship revenue. In contrast, the U.S. Open gets $93 million for its domestic tv rights and north of $15 million from sponsors.

The Masters revenue shortfall is deliberate. Says Peter Laatz, the Global Managing Director of IEG, “Augusta National wants to keep the mystique and uniqueness surrounding the tournament in place, including keeping the course itself as pristine as possible. The four majors are different from all other PGA Tour events, and within that the Masters is completely different from the other three majors.” Thus, the lack of on-course signage.

Augusta has just six sponsors – AT&T, Delta, IBM, Mercedes Benz, Rolex, and UPS – which split a minimalistic four minutes of commercial time per hour of event coverage. Most of the sponsorship money goes directly to Augusta’s media partners, CBS and ESPN, to cover the cost of production, with the rest going to pay to host hospitality events for VIP patrons. Given the U.S. Open generates at least $15 million per year in sponsorship revenue, it is safe to assume that the Masters could pull in at least $20 million, thanks to its much higher tv viewership.

The Masters generates no domestic tv revenue because its agreements with CBS and ESPN allow Augusta complete control of the broadcast in exchange for no compensation. In comparison, the USGA receives $93 million per year from NBC to air the U.S. Open. Lee Berke, who runs his own consulting firm LHB Sports, Entertainment, and Media said that Augusta could command $100 million or more if the club were ever to fully commercialize and auction their domestic media rights.

Badges and concessions are also severely underpriced. Augusta sells practice round badges for $75, single-day competitive round badges for $115, and four-day competitive round badges for $375 – under $100 per day of competition. Augusta is the only verified seller of Masters’ badges, but badges are available on the secondary market. On websites like StubHub and SeatGeek, practice round badges start at $600, single-day badges average $1,700, and four-day badges about $6,000. Being conservative, if Augusta were to charge half of what secondary market prices are, its badge revenue would jump to $185 million.

As far as concessions at Augusta, patrons can buy any beer offered for just $5, less than what most venues get for a hot dog. Sandwiches ($1.50-$3), soft drinks ($2), and various snacks (all $1.50) are a bargain. This works out to a per cap of about $25. These prices could easily be brought up to a per cap of about $40, increasing concessions revenue to $12 million.

Add it all up and the Masters is leaving $269 million on the putting green, 35% more than it was seven years ago. Being the elite brand in golf comes with a hefty price tag.