The Money In The Masters

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Hey Golfers —

In 1943 — Augusta National shut down due to World War II.

The golf course wasn’t strong from a financial standpoint. To maintain ownership of the land, each member was asked to make an annual gift of $100 ($1,800 adjusted for inflation).

Augusta was even turned into a working farm — they purchased 200 steers, 1,000 turkeys, and harvested pecans.

Augusta had to get creative to survive the War. They eventually reopened in early 1946.

Almost every successful entity has had an inflection point of near failure. While Augusta National is one of the best golf courses in the world and plays host to one of golf’s best tournaments. They were not exempt from that inflection point.

The Masters has since proved to be a vital component of the Augusta, Georgia, economy.

Let’s start with the basics — the Masters is wildly affordable to attend if you win tickets through the lottery. But it isn’t easy to win tickets in the lottery. A study was completed — stating that half a percent win single-day tickets — 1 out of 200. 

Here are the 2023 ticket prices.

• Practice round — $100

• Tournament round — $140

To provide some overall context on ticket prices, the U.S. Open charges around $75 for a practice round, and tournament rounds range from $175 to $235.

Masters prices are a stark contrast in the secondary market. Tickets selling on SeatGeek are more than ten times the face value.

• Wednesday — $2,500

• Thursday — $2,100

• Friday — $2,200

• Saturday — $1,700

• Sunday — $1,500

Augusta National provides free parking to patrons. And once you get through the gates — concession prices bring you back decades. Last year, a Pimento Cheese and Egg Salad sandwich was $1.50. A bottle of water was $2, and a beer was $5.

You can feasibly attend a tournament round at Augusta for under $200 as long as you don’t enter the merchandise pavilion.

It’s been reported that the Masters generates around $70 million in merchandise revenue during the week—which is $10 million per day.

Augusta doesn’t release attendance numbers — but it is believed that around 40,000 patrons attend each tournament round. Let’s use 250,000 as an estimate for the number of weekly patrons. That would mean each patron spends $280 on merchandise. But the number is likely higher — since patrons attend multiple rounds.

The Masters has an estimated annual economic impact on the local community of around $120 million. Economic impact studies can have quite a bit of variance, and I believe that number is low.

Augusta has a population of 202,000 — the 116th largest in the United States —and an annual city budget of $1.2 billion. The tournament is significant to the local area.

Around 4,000 homes will be rented during the week in the area. Richmond County School System schedules spring break the week of the Masters, allowing families to make money by renting their homes. Some rentals will pay for the annual mortgage. 

Many restaurants and businesses in the hospitality industry will do 10% of their annual revenue during the week of the Masters. And around 4,000 jobs will be created.

Hotel prices skyrocket the week of the Masters. A room at the Holiday Inn will cost around $700. A month from now, that room will cost $110. Richmond County will see $1.4 million in hotel tax in April — four times the average amount.

Augusta Regional Airport explodes for a ten-day stretch during Masters week. On a typical day, a plane takes off or lands every 30 minutes. During tournament week, a plane will take off or land every five minutes.

The airport typically has four direct commercial flights. But during the Masters, they add routes to six additional cities.

The airport also sees so much private air traffic that it closes one of the runways to park the planes. The airport will see around 1,500 private planes land during the week. For context — the Super Bowl in Las Vegas had around 1,000 private planes for the football game.

Augusta Regional Airport hires an additional 100 employees to accommodate the visitors.

While the Masters is important for the local community — they are leaving tens of millions on the table. 

The Masters could charge double in concessions and wouldn’t see a drop in demand. And seeing what people are willing to pay on the secondary market for tickets, they could increase the prices substantially.

Augusta also doesn’t have a media deal for the Masters, per se. They have six partners that cover the cost of broadcasting the tournament.

• IBM

• UPS

• AT&T

• Delta

• Rolex

• Mercedes

The U.S. Open’s domestic media deal is worth nearly $100 million annually. And Augusta sees nearly double the television ratings that the U.S. Open does. Augusta could command a domestic media deal north of $100 million per year.

Augusta knows they are leaving money on the table. But they want the patrons and fans watching on television to have the best experience possible.

And they continue to deliver.

Have yourself a great Monday. Talk to you next week!

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