The Biz: Can sponsor-free Masters survive?

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for the second consecutive year, the world's most prestigious golf tournament will go without sponsors. But the decision to again televise The Masters commercial-free next month has raised more questions than answers about the future of this arrangement.

Questions like: How long can Augusta National Golf Club, where the 68th annual Masters will be held April 8-11, bear the financial brunt of going sponsor-less? How long will Viacom's CBS, which will televise the event for the 48th consecutive year, agree to air the tournament without having a chance to sell advertising? How long will the three sponsors that are being told for a second consecutive year to stay behind the ropes-Coca-Cola Co., IBM Corp. and Citicorp-stick around?

The decision to go without sponsors this year came from Augusta National Golf Club Chairman William "Hootie" Johnson. Last year, Johnson decided to cast aside the marketers so the three companies would not become involved in the Martha Burk controversy.

Burk, chairman of the National Council of Women's Organizations, protested Augusta National's all-male membership. The controversy has all but died as the 2004 Masters approaches, and Burk says she doesn't plan to be in Augusta to protest as she did in 2003.

But the event still will not have sponsors. Johnson says, "There were many aspects of last year's broadcast that were favorable. The response from our TV viewers about the ability to watch strictly golf was very positive."

In fact, the 2003 telecast of The Masters' final round drew 34.5 million viewers, the third-highest total in the history of the event.

`indefinitely'

Johnson says he will review his decision on a yearly basis, but that the club could go without sponsors "indefinitely." Perhaps that wouldn't be financially feasible for most golf clubs and tournaments, but The Masters is different.

Normally, the purse for a PGA Tour event comes largely from a presenting sponsor and the other marketers who advertise on and around the tournament. Augusta National Golf Club is practically self-sufficient. It keeps a roster of 300 exclusive members who pay an average of $35,000 a year. That's more than $10 million a year in dues alone and doesn't count what members spend in the dining rooms and clubhouse.

how long?

Most observers agree with Johnson: The club could most definitely host The Masters without sponsors.

But how long CBS will continue to agree to that arrangement remains to be seen. This year, executives close to the situation say the club will not only pick up the $2 million production costs-ironically, the exact amount Augusta National will make after having raised the price of the 40,000 tickets it sells by $50-but it has decreased the amount of rights fee money it asks from CBS. That figure was undisclosed.

CBS has always maintained that televising The Masters was a break-even or slightly better proposition since the club allowed only four minutes of advertising per hour. A Viacom executive confirmed that and said the two entities never operated on a traditional 30-second spot rate. CBS would calculate its production costs, while Augusta National would calculate its rights fees. The network and the club would then divide that number among the three sponsors. In 2002, that was roughly $6 million, or almost $2 million each. The cost of airing about nine commercials each over two days was included in the $2 million sponsorship figure.

Asked what the network's future plans were, CBS Sports spokeswoman Leslie Anne Wade says: "We're televising The Masters this April. I can't speak to anything beyond that."

It remains to be seen whether the marketers return if and when Johnson decides to bring back sponsors. Coca-Cola and Citicorp did not return phone calls. IBM spokesman Brian Doyle says, "We don't make a habit of speculating on things like that."

As for the potential of bringing in other sponsors in the future, Burk says this is where she believes she won the public relations battle. "Unless they're not concerned about their public image," she says, "I don't think any legitimate corporation would do it."

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