The Masters: The Business Behind Golf’s Most-Watched Major

Augusta National Golf Club is one of the most iconic venues in sports.  The entryway, named Magnolia Lane, is exactly 330 yards long and includes 61 pristine magnolia trees on each side of the road. The clubhouse is nearly 170 years old, and US presidents have routinely flown to Georgia to play the world-class course.  

This level of detail and luxury is most apparent at the annual Masters Tournament.  A grounds crew of more than 100 people cut the fairways to precisely 3/8” every morning. The walkways have heated SubAir systems underneath them so no one slips and falls. And the merchandise shop does $1 million in revenue every single hour.  

But those numbers only scratch the surface when it comes to the money and business behind golf’s most famous tournament. That’s because The Masters is a complicated machine that doesn’t play by the traditional rules. They do what they want, when they want, and they have created one of the most exclusive events in sports history.

Here’s everything you need to know about the business behind The Masters. 

The Masters is an annual golf tournament held at Augusta National Golf Club in Augusta, Georgia. The first tournament was held in 1934 — this is the 87th edition of the tournament — and it’s one of the four major golf championships each year.  Roughly 100 players are invited to the tournament each year. This year’s field will compete for a $15 million purse, with the winner getting $2.7 million and each person after that gradually getting less until the last-place finisher gets a check for $37,800.  

2023 Masters Top 5 Payouts:  

• $2,700,000  

• $1,620,000  

• $1,020,000  

• $720,000  

• $600,000  

2023 Masters Bottom 5 Payouts:  

• $46,500  

• $43,500  

• $41,100  

• $39,000  

• $37,800  

The winner of each Masters Tournament is also handed an iconic Green Jacket. The player is allowed to take the jacket home for a year to celebrate, but then they need to return it to their locker at Augusta National, and it can’t ever leave the property again. 

Fun Fact: In 1994, someone found a Green Jacket at a thrift store in Toronto, Canada, and purchased it for $5. Then they listed it at auction last year, selling it for $140,000. Not bad. 

If there was one word to describe The Masters tournament, it would be secrecy.  Unlike most golf clubs operating as non-profits, Augusta National is registered as a for-profit corporation. This means they don’t get to claim tax-exempt status on their earnings, but it also means they don’t need to disclose the club’s income, holdings, membership list, renovation plans, ticket sales, or anything else.  This offers the club extreme privacy — but more importantly, it gives them control.  

For example, The Masters Tournament reportedly brought in $141 million in revenue last year. About 75% of that came from merchandise and ticket sales, and the remaining 25% came from international TV rights and concession sales.  

The Masters Revenue Breakdown for 2022 (% of total)

• Merchandise: $69 million (49%)  

• Tickets: $39 million (28%)  

• International TV rights: $25 million (18%)  

• Concessions: $8 million (5%)  

But here’s the most interesting part: Despite generating nearly $150 million in revenue during a single week each year, Augusta National and The Masters Tournament intentionally leave hundreds of millions of dollars on the table.  

Let’s run through each category, and I’ll explain what I’m talking about. 

Augustas Merchandise Business

The Masters has perfected its merchandise business. They are one of the only large-scale sporting events to limit merchandise sales strictly to in-person attendees only, and that feeling of exclusivity generates about $70 million in sales each year.  For context, if the store is open 10 hours a day, that means Augusta National is selling $10 million of merchandise a day, $1 million of merchandise an hour, $16,000 worth of merchandise every minute, and $277 worth of merchandise every second.  

Don’t believe me? Check out the line at the pro shop during Monday’s practice round. 

And this merchandise is so exclusive that some people are willing to pay ridiculously high markups on the secondary market when they can’t attend the event themselves.  Take the Garden Gnomes, for example. The Masters started selling garden gnomes in 2016. It’s a different design each year, and they only cost $50. But you can only buy one per customer, and the eBay resale prices can shoot up to 850% price markups. But still, there are millions of people watching the tournament at home that would probably love to buy merchandise online and The Masters is undoubtedly leaving millions of dollars on the table by limiting sales to in-person attendees only. 

Masters Tickets: The Odds Aren’t In Your Favor

The Masters has one of the most unique ticketing policies in sports. The tickets are known as “badges,” and rather than just selling them to the highest bidder on the open market, Augusta National selects attendees each year through a lottery system.  Fans enter their information on The Masters website and have a 0.55% chance of winning a single-day tournament ticket. But if they do win, the tickets are much cheaper than other high-profile events like the Super Bowl or World Series.  Of course, those numbers get significantly higher when you try to buy them on the secondary market, despite Augusta National's no-resale policy. In total, more than 200,000 people attend The Masters every year. And while the lottery winners certainly aren’t complaining about $100 to $150 daily tickets, it’s estimated that Augusta National would make an additional $145 million in annual revenue if they ended up charging just 50% of what the secondary market charges.  

Remember, Augusta doesn’t currently see any revenue from secondary sales. 

Inflation? The Concession Stand Didn’t Get The Memo

Life has three certainties: Death, taxes, and cheap concessions at the Masters.  Augusta National has become famous for its cheap concession prices. A sandwich and beer will only cost you $6.50, and you can buy every item on the menu for $66.  For context, the average NFL stadium charges about $10 for a 16-ounce beer. The Masters has kept these prices low (and relatively consistent) over the last few decades to ensure that fans have a good experience while on the grounds.  “We have to remember, the total cost of event attendance includes travel and transaction costs, the cost of the ticket itself, as well as any parking, concessions, and souvenirs purchased,” sports economist Steve Salaga told FOX Business.  “So one way to make the overall experience more appealing to the consumer is to keep the price of these complementary products like concessions low,” Salaga said. “Not that Augusta has an issue with this, but I think the affordable concession pricing is an appealing aspect of the consumer experience.”  And when you adjust for inflation, the food has actually gotten cheaper over time. 

For an annual golf tournament with astronomically high secondary market ticket prices, nearly $70 million in merchandise sales, and $1.50 sandwiches, one revenue component is still more interesting than the rest — I’m talking about media rights.  

Augusta Prioritizes Control Over Media & Sponsorship Money

The Masters Tournament doesn’t currently make any money from domestic TV rights.  Instead, Augusta National allows ESPN and CBS to broadcast the tournament for free each year in exchange for full and complete control of TV production.  The Masters also only has six sponsors: AT&T, Delta, IBM, Mercedes Benz, Rolex, and UPS. But Augusta National has no on-course sponsor signage. And as part of their sponsorship deals, the six sponsors agree to collectively share just 4 minutes of TV commercial time per hour of The Masters broadcast.  The Masters then uses the money they collect from the TV sponsors to cover production costs for ESPN and CBS. The remaining money covers hospitality expenses for VIP guests, and it means Augusta makes $0 from domestic TV rights.  And when you add up the money they are leaving behind in TV rights, corporate sponsorships, merchandise sales, concession sales, tickets, and more, it’s estimated that The Masters Tournament is leaving more than $250 million on the table.  

But that’s the price they are willing to pay for privacy, exclusivity, and control. 

A Few Interesting Facts

• The real winners this week are homeowners in Augusta, Georiga. They can rent out their 4-5 bedroom homes for a weekly rate of $30,000+, and the IRS implemented “The Augusta Rule” years ago, enabling homeowners to rent out their home for 14 days per year without requiring them to report the rental income on their individual tax return.  

• The Crow’s Nest is one of the best traditions at Augusta National. The 30-by-40-ft living space is situated on the 3rd floor of Augusta's clubhouse, and each of the 7 amateurs at this year’s tournament will stay one night in the room, joining previous legends like Tiger Woods, Jack Nicklaus, and Phil Mickelson.  

Is Augusta Expanding? 

Since 1999, Augusta National has spent $200 million on real estate (100+ properties and 270 acres in total) around its golf club. They have bulldozed homes to create additional parking and even purchased a shopping center with a Wendy’s, Steinmart, and Publix for $26 million. Only time will tell their actual plan, but many speculate that expansion is coming.  

And there you have it — that’s how Augusta National has turned the Masters Tournament into one of the world’s most exclusive (and lucrative) sporting events.