The business of golf is ever changing, with one of the major transitions happening inside the ropes.
During the past five years or so, sponsorship and endorsement deals by golf equipment companies have not dried up but have changed the amount of money that touring pros receive. If a player is not in the top 30 of the Official World Golf Ranking, his earning power through endorsements by equipment companies is limited, at best.
A decade or so ago, an equipment-endorsement deal would cover a player’s expenses – $100,000 and up, before caddie fees – for the year, making all earnings on the course gravy.
Now many players are forced to look elsewhere for endorsements and go outside of the usual golf-sponsorship avenues. Many companies are not seeing the same value in player endorsements as they had in the past, according to players and agents.
"I think the top‑30 golfers in the world, you kind of sit at a dinner table with a $600 bottle of wine and say, ‘Hey, let's talk,’ ” James Hahn, a two-time Tour winner who is No. 105 in the world, said of negotiating with equipment companies. “And they can negotiate big figures and move the market.”
Hahn and Chesson Hadley, a one-time Tour winner and former rookie of the year who is No. 70 in the world, lack the endorsement appeal of the game’s elite performers. So, they decided to look in a more unorthodox direction: NASCAR. Or more specifically, toward one of its drivers: Kevin Harvick and his KHI Management.
© GOLFFILE/EOIN CLARKE
James Hahn has lined up some sponsorship deals in a non-traditional manner via stock-car driver Kevin Harvick’s KHI Management.
“I was looking for something outside of the golfing world,” Hahn said. “I feel like competition between agencies is very fierce, with basically agencies talking to the same sponsors about their particular players. It's really hard to get a corporate logo out here for your chest, sleeve, bag, and I'm sure every resource has been tapped out by the big agencies, because that's what they do. So, what turned me on with KHI was that they were outside of golf.”
Upon signing with KHI, Hahn immediately saw benefits from a variety of sponsors. Some, such as Michelob Ultra and E-Z-Go, already were close to the golf world. Others, such as Fields, a sports-facilities general contractor, and Morton Builders, were not. But all were sponsors of Harvick’s stock-car racing team.
Hadley liked the family atmosphere that Harvick had built, but he also recognized the money in NASCAR and how he might get a small piece of a very large pie.
Harvick confirmed that it costs $18 million-$20 million to run one stock car for a year, and that’s mainly done by sponsorship. That realization ratified the reasoning for Hahn and Hadley to join KHI.
PHOTO COURTESY OF KHI MANAGEMENT
Kevin Harvick uses his stock-car knowledge to build a sports-management business that has included PGA Tour players.
“I don't know if this is true or not, but 20 million [dollars] in order just to put a car on the road – and I'm sure there are millions and millions of dollars of other expenses that they have to have – so obviously they have to raise that money from sponsors,” Hadley said. “If you have a sponsor that's paying 5 million, hey, for an extra 200 grand or whatever, you can also sponsor James Hahn and Chesson Hadley and Jason Gore,” Hadley said of his strategy regarding Tour players. “So, what's 200 grand, 250 grand, if you're already spending 5 million and you go into a couple different markets?”
In 2010, after selling his race team that included 140 employees and other cars, Harvick returned to his roots, driving his own race car and maintaining his personal sponsors while looking for the next idea to hit.
It came at the infield at the Texas Motor Speedway when Tapout, a casual-clothing brand, brought a group of fighters from the Ultimate Fighting Championship to the Fort Worth track. That’s where Harvick met Donald “Cowboy” Cerrone.
After Harvick attended some of Cerrone’s fights, Cerrone called Harvick to see whether he would be interested in representing the fighter.
“Never really thought about that, but it's something for us to where you have the overhead of employees, you have sponsors that we had had for years, and really it created a more diverse atmosphere for us to have other clients,” Harvick said of the idea behind KHI. “Not everybody likes NASCAR; not everybody likes UFC; not everybody likes PGA Tour golf. So as we went down the line with Donald for a couple years, we signed [UFC bantamweight] Miesha Tate as well, and she retired about a little over a year ago on the UFC side and so we started doing Jason Gore's stuff on the PGA [Tour] side of things.
“For us, it's a very unique fit because of the fact that whoever the client is has to kind of buy into the thought process of being part of really a sponsorship family and an agency who is not a baby sitter, who is not going to be the guy that shows up to make sure you have your rental cars and hotel rooms. It takes a unique mindset from the client standpoint to let us help from a distance, but also from a sponsorship side, to buy into the diverse-thinking thought process that we have as far as putting the sponsors in a bunch of different unique spots.
“It's worked out well for us, and we have tried to find great fits along the way. James and Chesson both fit into the current group of people that we had, and they bought into the process and liked how we approached things, and here we are.”
Harvick said he is not actively looking for other professional golfers, but it is clear that if someone comes and fits into the family, he would be willing to look at an addition.
“Most everything that we have done is always by a chance conversation, and the circumstances always work themselves out right,” Harvick said. “If somebody's at the end of their contract and you pick up the phone one day and you call and it's a good fit, then we sit down as a group and talk about it.”
Alex Miceli is the founder and publisher of Morning Read. Email: email@example.com; Twitter: @AlexMiceli