Rory McIlroy — Golf’s billion dollar ticket (and counting)
Picture Eoin Clarke, www.golffile.ie
When Darren Clarke realised the dream of a lifetime by lifting the Claret Jug at Sandwich in 2011, he was already an established star. Winning The Open brought him an immediate €2.2m bonus from Dunlop and a string of lucrative extras in terms of increased appearances fees for multiple, energy sapping trip to lesser events on the other side of the planet.
“Darren’s already a brand,” his manager, Andrew ‘Chubby’ Chandler said at the time. “He is massively popular all over the world. So I think my job for him is going to be very easy. We are able to say more times yes to deals for Darren than we will be to deals offered to Rory. Rory, we’ve got to look after, he is so young you could burn him out. Whereas Darren is burned out a few times already.”
Chandler never got the chance to subject McIlroy to burnout. While the Holywood star signed a lucrative sponsorship deal with Banco Santander that September, proudly holding a Titleist club at the Wembley launch where he showed off his logos — Santander on his sleeve, Jumeirah Hotel and Resorts on his cap and chest, Oakley clothing and sunglasses on his chest and luxury watchmaker Audemars Piguet on the other sleeve — he was unhappy with the way his brand was being handled by ISM and jumped ship, moving Dublin-based Horizon Sports Management by mid-October.
The rest, as they say, is history. Messy, acrimonious history, as the on-going legal battle between McIlroy and his now ex-management company has shown.
In its essence, the split with Horizon is over money, mainly the $100m, five-year deal he signed with Nike in December 2012. McIlroy claims that he paid excessive commissions and fees to his agent — $6.8m made up of five per cent on his pre-tax on-course earnings and 20 per cent for off-course, including his $20m a year Nike endorsement up to 2017 as well as other agreements with Bose, Omega and the existing Santander deal.
Under the disputed contract with Horizon, the commission on the Nike deal was set to fall to 15 per cent if it’s extended beyond 2017. But considering Horizon claims that McIlroy stood to earn $13m in 2013 from the contracts negotiated by ISM but actually made $52m under the agreements they negotiated for what was his worst season in terms of results since his rookie season in 2008, the financial repercussions of his victory in the Open Championship, and subsequent wins in the WGC-Bridgestone Invitational and the US PGA, are massive.
Congrats to Rory McIlroy, hope all those winnings don't get in the way of his swing! #PGAChampionship #rorymcilroy pic.twitter.com/bSM3uRFLEG
— Niall O'Loughlin (@nialloloughlin) August 11, 2014
Not only is he due substantial performance bonuses for winning a two majors this year, he can expect to earn even more if he wins the European Tour’s Race to Dubai or the US Tour’s FedEx Cup.
All this is good news for Horizon, should they win the court case set for the Commercial division of the High Court in January, having countersued McIlroy for unpaid commissions and fees on the deals that are still running.
According to Golf Digest’ annual Money List ranking of the Top 50 earners, McIlroy was the game’s fifth biggest earner in 2013 with an estimated income of $20,608,789 ($2,608,789 on the course and $18,000,000 in endorsements).
As we now know from documents released by Horizon at the start of the legal row, that figure looks suspiciously low given his $20m a year deal with Nike alone, not to mention appearance fees of between $1m and $1.5m every time he plays in events in Korea, Shanghai and China, to name just three destinations.
That appearance fee figure is now likely to climb to the $2m he allegedly failed to succeed in getting from the Australian Open two years ago, putting the value of his “free” Irish Open appearances into perspective.
With his career earnings from tournaments alone now standing at €34.02m, you have to wonder if the personal wealth figure of €34m suggested by The Times’ Rich List for 2014 is even remotely close.
With Tiger Woods becoming the first athlete to break through the $1 billion barrier in career earnings as long ago as 2009, McIlroy can hope to match that figure if he remains healthy, successful and scandal free. In fact, it will be a shock if he doesn’t.
Even though he has not won a major since 2008, Forbes calculates that Woods has pushed his career total past $1.3 billion — about 88 percent of which came from endorsements.
McIlroy is not Woods and parts with the distinct disadvantage that he is not American and boasts just two American brand sponsors — albeit huge ones in Nike and Bose.
Until his legal row with Horizon is settled, almost certainly in a court room early next year, he is unlikely to add to his sponsorship portfolio just yet.
But with 18-time major winner Jack Nicklaus giving him his blessing, the 25-year old from County Down is reserving a place form himself on the Olympus of the game.
With three legs of the career Grand Slam already in his possession, he need only win the Masters at Augusta National to join the five legends of the game to achieve that feat so far — Nicklaus, Gene Sarazen, Ben Hogan, Gary Player and Woods.
“Rory will make $100 million in endorsements over the next 10 years," said Steve Martin of London's M&C Saatchi Sport and Entertainment following McIlroy’s groundbreaking 2012 season. That was before it became know that he would make $100 million from Nike alone by 2017.
Those endorsement figures were being revised to €40m a year this week but the final number may well be far higher.
The Open victory was a game changer in terms of McIlroy’s status in the game as he is now the first European since the inception of the Masters to win three different majors, eclipsing Nick Faldo, Seve Ballesteros and Padraig Harrington.
Harrington this week tipped McIlroy to continue his major winning feats for the next decade at least, giving him the chance to possibly edge close to Woods’ record of 14 major wins and Nicklaus’ record haul of 18.
Given that golfing careers typically last 20 years, in the competitive sense, McIlroy can legitimately hope to win at least 10 majors. Given that Nicklaus last won a major in 1986 and made $26 million last year or that Arnold Palmer has gone 40 years without a win and still make $40m in 2013, McIlroy earning potential is unimaginable.
Loved by the US crowds who are crying out for a player to take up the mantle of the faltering Woods as he approaches his 40 birthday next season.
Woods himself compares McIlroy to the flamboyant but inconsistent Phil Mickelson, who Gofl Digest conservatively estimate made $52 m in 2013 compared to Tiger’s $83m.
With a $10m home in Florida and a $400,000 Lamborghini Aventador in his stable of cars, a private jet appears a likely acquisition. Asked how he planned to handle another lost luggage incident, such as the US Airways faux pas that left him club-less for a day at Fota Island in June, McIlroy hinted at the private jet solution when he said, knowingly: “I plan to do something about that.”
He was already flying high before winning that old Claret Jug. Now with four majors in his possession by the age of 25 and the game’s most revered records within him compass, he’s just entered the stratosphere at escape velocity. Not even the sky’s the limit now.
