Major Money

Thursday June 7th, 2007

How much is a Masters victory worth? Some numbers are easier to quantify than others. For his breakthrough victory, Zach Johnson earned $1.3 million in prize money. His stable of corporate sponsors received a combined $7.5 million in broadcast exposure time, according to the sponsorship evaluation firm Joyce Julius & Associates, as cited by CNBC.com. But these numbers only begin to tell the story. \n

\n "I don't know what it means from a revenue standpoint," says Pat Baird, the CEO of Aegon USA, Johnson' primary sponsor. "All I can tell you is that this has had more impact than anything we could have done as a company. People now identify our company with a major event. We literally have a new face." \n

\n Baird still remembers the phone call that started it all. It was late 2003 and on the other end of the line was Larry Gladson, the head pro of Elmcrest Country Club in Cedar Rapids, Iowa, where Aegon USA is based. Baird was a longtime member at Elmcrest, as was Johnson's family, and Gladson was wondering if Baird might be interested in doing a deal with a soon-to-be rookie on the PGA Tour. Ironically, in certain golf circles Baird was considered a grinch. After Aegon acquired Transamerica in 1999, it was Baird who pulled the plug on Transamerica's long-standing title sponsorship of a Senior tour event in Napa, Calif. "I really struggled with our costs versus the value to the company," he says. \n

\nBut Baird thought it might be helpful to have a Tour pro on the payroll for corporate outings, and he had known Zach since the future Masters champ was a pipsqueak running around Elmcrest. A one-year deal was hammered out, and after Johnson proved to be a hit with clients, Aegon re-upped for three more years, securing the prime real estate on the front of Johnson's cap as well as a Transamerica logo on his shirt. "We bet on the person more than the golfer," says Baird. "What has happened on the course has been over-the-top."\n

\n Aegon has 29,000 employees worldwide and is the fifth-largest insurance company in the U.S., as well as offering various other financial services. But at the outset of 2007 it was decided that the company needed to raise its profile in the domestic market, so $10 million was set aside for a branding campaign, of which Johnson was just one small component. \n

\n"That all went out the window Sunday night of the Masters," Baird said with a chuckle. "All the money was shifted to Zach, and we put two million dollars more into the pot." In the days after the Masters, Aegon took out splashy congratulatory ads in a variety of national magazines and big-city newspapers and almost instantly began filming the TV commercials that will debut during the U.S. Open. \n

\n Aegon's commitment to Johnson might seem risky given that this is the final year of their contract. (In fact, Johnson couldn't have picked a better year to win a green jacket, given that all of his deals expire at the end of this year, including pacts with Titleist/FootJoy, Dunning Golf apparel, and RSM McGladrey, an accounting and tax firm.) But Johnson is intensely loyal to those who have helped shape his career. He has had the same caddie and swing coach throughout his Tour career, and he calls Baird "a friend and a mentor more than a business relationship." Beginning this summer, Johnson and his wife, Kim, will employ Baird's 18-year-old daughter as a nannie to their son, Will, who is 4 months old.\n

\n Ask Johnson about his impending free agency, and he is almost dismissive of trying to cash in with a bevy of new sponsors. "Why would I want to change anything?" he says. "The equipment I have, the companies that have supported me, everything's working, it's gotten me this far. I just want to keep doing what I'm doing."\n

\n Johnson is nothing if not a sensible Midwestern boy, which puts him at odds with the conspicuous consumption that is a way of life on the PGA Tour. To cite but one of many examples, Chris DiMarco is currently building an Orlando-area Xanadu complete with bowling alley and movie theater, and he hasn't won a tournament in more than five years. In a seven-week stretch this spring, Johnson won two tournaments and more than $2.5 million in prize money, and he figures that's more than enough for a man of his simple tastes. "I don't need much to keep me happy," he says. "I like good food and tennis shoes. I like skiing. Am I frugal? That's a nice way of putting it."\n

\n Having worked his way up from the Prairie tour to the Hooters tour to the Nationwide tour to, at last, the PGA Tour, Johnson spent plenty of years being overlooked and under-appreciated. In explaining his allegiance to Dunning Golf, his illuminating answer is, "They've made me their marquee guy, which is pretty cool."\n

\n In fact, he's practically their only guy. Dunning is a niche company out of Canada that didn't launch its U.S. operations until 2002. Presently, the apparel is sold only in the pro shops of about 100 high-end country clubs like Isleworth and Hazeltine. Founder Ralph Dunning has a background in triathlons and cycling, and for 15 years he has been experimenting with cutting-edge gear for athletic wear, with a particular emphasis on compression fabrics. \n

\nNike plans months in advance what Tiger Woods will wear at the majors, but Dunning lets Johnson assemble his own wardrobe. When Sunday at the Masters turned out to be unseasonable chilly, Johnson showed up on the first tee in a skin-tight white compression turtleneck, layered with a polo and sleek vest in different shades of blue. It was a different kind of look — cool and athletic — and golf fans took notice.\n

\n "We literally have not been able to make the clothes fast enough to keep up with demand," says Dunning, who, drafting on Johnson, expects to be in 500 pro shops by next spring, and 2,000 the year after. "We had to upgrade our internal server because the Web traffic was so heavy." Dunning has also hired more customer service people and created a new sales director position.\n

\n "This has been a once-in-a-lifetime event for Zach and everyone around him," says Dunning. \n

\n Maybe, maybe not.\n

\n "What happens if Zach wins the U.S. Open?" asked Baird, chuckling at the thought. "I can tell you that we'll be happy to start over again."

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