AUGUSTA, Ga. (AP) — Corporate customers at the Masters normally keep chef Karl Kwoka busy all week prepping gourmet dishes such as Angus beef filets with bleu cheese fritters and crepes de mer with lobster cream sauce. Catering to elite fans and their top clients during the April golf tournament typically accounts for a quarter of his income.
This year, the unpalatable economy has piled Kwoka’s plate with more cancellations than customers. Four large corporations that in past years hired Kwoka to prepare private meals have backed out, leaving him with a single company to cook for, not enough to justify hiring the usual 30 extra workers. Kwoka estimates the cancellations cost him more than $70,000, and the temporary staff are missing out on big money, too.
In its 75-year history, the Masters has established itself as the Super Bowl for those who prefer single-malt scotch to Miller Lite, a sort of Mardi Gras for the country club crowd. The Augusta Convention and Visitors Bureau estimates the tournament pumps more than $100 million into the economy of this city of 200,000, which relies on the Army’s Fort Gordon, a medical college, several hospitals and a smattering of manufacturing the rest of the year.
That kind of cash infusion isn’t coming this year. Augusta business owners who’ve come to count on Masters money are seeing huge cutbacks by big-shot visitors who typically spare no expense on trips to the tradition-laden tournament.
“The companies are scaling back, and a lot aren’t coming at all,” said Kwoka, who wouldn’t name those clients but whose past Masters customers include the international law firm Jones Day, which represents many Fortune 500 companies. “If you’ve got people in danger of losing their jobs, the last thing you want to come across as is spending money, having a good time at a golf tournament.”
Diane Starr, president of Augusta rental agency Corporate Quarters, said it’s largely banks and finance companies that are bailing on the 2009 Masters, which starts Thursday after three days of practice rounds popular with fans. Starr’s company usually rents about 400 homes – from two-bed condos to sprawling eight-bedroom houses in gated neighborhoods – to high-end Masters clients.
“Normally they’re gone in September,” Starr said. “That’s what makes this year so unusual.”
She expects to fill no more than 300 for next week’s tournament, even at steep discounts. Lavish party homes that usually fetch $25,000 for tournament week have had price tags slashed to as low as $16,000, Starr said.
That’s not to say Masters week is shaping up to be a total bust. Augusta hotels are reporting solid reservations, though some still have vacancies, and restaurants expect long lines of customers.
Those are generally a different class of Masters customer, however, said Alfred Monsalvatge of TravelMasters, a company that normally books VIP hospitality packages for the tournament for up to 20 large companies spending a full week at the event.
“I’ve got zero this year,” Monsalvatge said. “I’ve got people coming, but I’ve just replaced them with people that spend a lot less money. Basically they’re coming in for a day or so to Augusta, see the golf course, maybe go out to dinner and will be gone the next day.”
Corporate sponsors pump vital revenue into the PGA Tour, but for companies that took federal bailouts, especially banks, cutting back on hospitality is a public relations move more than a cost-saving measure.
In February, Chicago-based Northern Trust Corp. agreed to pay back a $1.6 billion bailout loan after the bank hosted hundreds of clients and employees at upscale hotels, concerts and dinners at the PGA Tour’s Northern Trust Open at Riviera Club in suburban Los Angeles. The company said no bailout money was spent on hospitality at the tournament.
In October, Wachovia Corp. – which was acquired last year by Wells Fargo & Co. – took its name off the Wachovia Championship, a PGA stop at Quail Hollow Club in the bank’s hometown of Charlotte, N.C.
Even though Wachovia is contracted to sponsor the North Carolina tournament through 2014, Wells Fargo opted against promoting Wachovia in the event’s title and ended its practice of entertaining clients during the event. The company said it wanted to avoid “mixed signals about our priorities.”
In February, Wells Fargo scrapped a lavish 12-day casino junket for employees in Las Vegas after being stung by accusations of misusing $25 billion in bailout money.
Citigroup Inc., which advertised at the Masters several years ago and held “minimal” hospitality events through last year, is not coming to Augusta this week, “in the interest of managing expenses,” spokesman Stephen Silverman said.
When it comes to restricting the visibility of corporate sponsors, the Masters stands alone among the major championships. Many have corporate ads on backboards visible on the tee boxes, allow sponsors to host exhibits on the course and plaster their logos on pamphlets at the gates.
Not Augusta National, where there isn’t a single corporate logo to be found on the manicured grounds. The Masters’ three major corporate partners – IBM Corp., AT&T Inc. and ExxonMobil Corp. – entertain in chalets tucked away from patrons behind the Georgia pines. Sponsors get a measly four minutes of commercial spots per hour during Masters telecasts; most golf tournaments run 15 to 18 minutes an hour.
At Augusta, the corporate presence is usually much more apparent off the course. Companies splash their logos on rented limousines and vans and place signs in the yards of homes they’ve rented for employees and guests.
Tickets to walk the course are among the most coveted in sports. In 17 years of booking Masters trips, however, Monsalvatge said he’s never seen scalpers’ prices so low. Four-day passes that fetched up to $3,500 last year are going for $1,350, he said.
The penny pinching has limo service owner William Murrell expecting “a rainy week in Georgia” during the Masters. Murrell spent 15 years as chauffeur to the late soul singer James Brown, perhaps the only Augusta native more famous than Masters founder Bobby Jones. Now Murrell’s hired car company thrives on Jones’ tournament.
Murrell normally hires up to 45 school bus drivers and other temporary workers who have Masters week off for spring break. His temps will pull down $2,000 on a good tournament week.
“It means quite a bit,” said Gena Archer, 41, a $15-an-hour school bus driver who has worked for Murrell during Masters week for the past five years. “It actually puts my account ahead where I can be comfortable for a couple of months where I don’t have to worry about bills being paid.”
This year, Murrell expects he’ll need only about 12 temps. His big-ticket clients simply haven’t called, so he’s already eyeing his second-most lucrative time of the year: high-school proms.
“They don’t compare to the Masters,” Murrell says. “We sort of rely on it every year. There’s a lot of heavy wallets there.”
For the 2009 Masters, those wallets are looking a lot lighter.
AP Business Writer Madlen Read in New York and AP Golf Writer Doug Ferguson in Augusta contributed to this report.