The Money Behind Winning The Masters
A Masters win is worth millions in off-course earnings.
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Hey Golfers —
Jon Rahm won $3,240,000 for his Masters victory — pushing his season earnings to $13,288,540.
In just eleven events this season — he is averaging $1,208,049 per event and $332,000 per round.
To add some context to Rahm’s season earnings. Scottie Scheffler led the money list last year with $14,046,910. And two golfers have already made over ten million this year — the same amount as last year.
What is the financial impact of winning the Masters?
We will break down the Masters win impact into two earnings buckets.
On-course earnings
Off-course earnings
Let’s look at the on-course earnings impact on a Masters win. Several bonuses are positively impacted by winning the Masters.
PIP Bonus
FedEx Cup Bonus
Comcast Business Tour Top 10 Bonus
The PIP Bonus has a total pool of $100 million in 2023, paying out 20 places. The winner receives $15 million, and 20th place receives $2 million. Social media exposure and internet searches play a role in determining the rankings.
The Masters winner will receive a huge boost in the PIP rankings. Jon Rahm was 5th in the PIP Bonus in 2022 and won $6 million. His Masters win will provide him a bump from last year.
A Masters victory will earn a player 600 FedEx Cup points. Winning 600 FedEx Cup points guarantees a spot in the FedEx Cup Playoffs. Last season — 600 FedEx Cup points were good for 81st. A guaranteed bonus of $140,000.
The Comcast Business Tour Top 10 Bonus is a $20 million bonus pool that pays the top ten players in the FedEx Cup standings at the end of the regular season. Sungjae Im finished 10th last year with 1,733 points and earned $1 million. A Masters win gets a player over 30% of the way to tenth.
A Masters win will certainly result in more than the $3,240,000 first-place prize. And for Jon Rahm, it will be seven figures.
Let’s look at the off-course earnings impact on a Masters win.
Professional golfers have an incredible upside in off-course earnings. Sportico released a report for the Top 100 highest-paid athletes in 2022 — four were golfers. Rory McIlroy made $28 million in off-course earnings, while Jordan Spieth made $22 million.
Off-course money typically comes in three different ways.
Performance bonuses
Sponsors and endorsements
Equipment contracts
Performance bonuses are incredibly interesting. I wrote a piece on this last fall if you want to dive deeper into it.
Sponsors will write a specific outcome in a golfer’s contract. Here is a hypothetical example — Mercedes will pay Jon Rahm $2 million for winning the Masters.
The most public example of this is from the 2011 Open Championship. Dunlop paid Darren Clarke $3 million for his win — double the amount for winning the tournament.
Most sponsors will insure these outcomes with an underwriter. One of those is Black Swan Sports. I spoke with David Lyons from Black Swan Sports about their exposure to the Masters.
Black Swan had several policies written for the Masters with player sponsors, including three policies that were seven figures. David mentioned that they don’t necessarily see more policies written for the Masters versus the other major events.
And in another conversation with an agent representing several golfers on the PGA Tour and LPGA Tour — they expected that almost every player in the field had a performance bonus. If a player is not ranked inside the top ten OWGR, the win bonus would likely be around $100,000 from a sponsor.
The agent mentioned they prefer to secure performance bonuses with every sponsor. So if a player has six sponsors — and a $100,000 win bonus from each sponsor, it would be $600,000.
Off-course money from sponsors and equipment companies will trickle in over time.
The agent I spoke with said they preferred to sign their players to two-year contracts. And a Masters win adds incredible value when up for a contract renewal.
Lifetime exemption — creating a long-term guarantee for sponsors.
TV viewership is more than double the next-closest major.
The Masters is arguably the most storied event in golf.
A Masters win would likely see a golfer’s sponsor earnings grow by 2 — 3 times when their contract is up for renewal. And the most value is for front-of-hat sponsors.
As for equipment companies — the money will come from performance bonuses. The contract will likely increase when it is up for renewal, but it may not double.
Of course, there are outliers. Rory McIlroy signed a ten-year deal with TaylorMade for $100 million in 2017.
Jon Rahm signed a multi-year contract with Callaway in January 2021 — before he won the U.S. Open in 2021. The details of the contract were not disclosed, but we can imagine it is worth seven figures annually.
Conversely, a player ranked 40th in the world will have an equipment contract typically worth between $150,000 — $250,000 per year.
Here is a look at three Masters winners’ off-course earnings a year after winning the tournament.
Adam Scott — $9 million
Angel Cabrera — $7.5 million
Charl Schwartzel — $3 million
A Masters win dominates off-course earnings.
Rahm lists eight sponsors on his website and has four on his clothing.
Mercedes
Callaway
Blue Yonder
TravisMathew
Combine the performance bonuses from sponsors and the future off-course earnings in contracts. Jon Rahm’s Masters win will be worth millions annually in off-course earnings.
Have yourself a great Monday. Talk to you next week!
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