Lucy Basden-Smith, experiential business director at HSE Cake, explains the brand control mentality behind The Masters.
It’s peculiar how often the price of sandwiches comes up when ‘sportsbiz’ people talk about The Masters.
They are notably cheap (the sandwiches, not the sportsbiz people). This week an egg salad sandwich bought on the grounds of the Augusta National will cost you $1.50. An American-brewed beer to go with it will set you back $4.
These prices certainly bear comparison to other events of a similar status. I defy any visitor to a world-famous sports event this year to come home without a tale of feeling ripped off at the concession stands. Ticket prices are also great value at less than $400 for a week badge that gains access to the four competitive rounds. You can pay 10 times that for a Super Bowl ticket.
These prices get us to the broader question of why… Why don’t they charge more? Can’t they make more money? That’s how things work, isn’t it? Well, yes and no.
The Masters makes plenty of money. In all, the Masters will generate about $115m (€108m) in revenue this year, according to Golf Digest, more than a five-fold increase from the $22m the magazine estimated in 1997 for the previous year’s Masters. These numbers translate to a probable profit of almost $30m, up from $7m in the 1997 report.
But the price of the sandwiches has come to frame the debate on the event experience, which is universally praised as one of the best in sport.
The answer to how The Masters maintains its reputation for excellence lies in that most elusive marketing quality: control. Put simply, The Masters is sports best example of brand control; the Apple of the event sector.
One key to this control lies in the ownership of the club, which remains very much a members-only affair. This affords the luxury of being able to take a long-term view, because there is no stakeholder pressure to grow at an unsustainable rate by squeezing those concession or ticket prices.
Instead, The Masters makes enormous amounts of money by an almost religious devotion to maintaining control of the product and the brand. And like Apple, the value of the brand lies in the products it doesn’t sell.
From its famous one-year broadcast renewals through to the limit on commercial partners, The Masters has maintained a fierce control over the way the event is seen, experienced and talked about. This extends to the corporate hospitality market, where price of entry goes up considerably. Access to Berckmans Place has become one of Corporate America’s hottest tickets. A spectacular 100,000-square-foot entertainment facility next to the fifth fairway. This has five restaurants, a huge merchandise store and caters for around 2,000 guests, who tend toward the VVIP end of the market and want to mingle with Augusta members such as Bill Gates, Condoleezza Rice (one of only three women members) and Warren Buffett.
Berckmans Place was opened in 2013, part of a long-term building programme overseen by Billy Payne, the chairman of Augusta National Golf Club, which saw the club spend $50m on land surrounding the club over the past decade.
This year, many of the golf journalists at Augusta have been filling the pre-event news vacuum with photos of the new media centre, which is vast and new and shiny. Sports writers are not used to being treated so well and each excited tweet carried the message that it is business as usual at Augusta. And that’s exactly how they like it.
This article features in SportBusiness International’s 2018 Fan XP report. Browse the sections of the report or download the full PDF document here.