Intelligent agent in a close-knit 'Team Harrington'

GOLF SPONSORSHIP: Richard Gillistalks to IMG's Adrian Mitchell who looks after the financial interests of Pádraig Harrington

THERE’S NEVER a bad time to win back-to-back Major championships, but even so, you’ve got to admire Pádraig Harrington’s timing. A few weeks after he lifted the PGA Championship at Oakland Hills, his third major in 18 months, Harrington’s agent Adrian Mitchell, of the powerful IMG agency, was tasked with closing a deal with the player’s long time club supplier Wilson.

Contract renewal negotiations between Mitchell and the American-owned club maker had been going on since after Harrington’s first Major win at Carnoustie in 2007. Wilson is Harrington’s biggest single commercial relationship and given the financial crisis unfolding on both sides of the Atlantic, this was as bad a time to be going to market as there has been since the days when Bobby Jones was winning Majors.

But Harrington’s rise to world number three loaded the dice in Mitchell’s favour, to the extent that the club maker was rumoured to have paid €7.8 million to be in the Dubliner’s bag for another three seasons, a substantial increase on his previous deal.

Since then two other contracts have been announced: he has swapped HiTec shoes for Footjoys and his visor now bears the initials FTI, an American business consultancy in a deal worth in the region of €12 million over three years. In all, Mitchell has put together a total of 10 personal endorsement sponsorships for the player, further proof that Harrington’s stock is bucking golf’s bear market.

“This deal will put Pádraig in the top four or five best-paid players in the world,” said Tim Clarke, general manager of Wilson’s golf division at the time of the deal, placing the Dubliner in a small group of players who inhabit the space below Tiger Woods in golf’s firmament, and which includes Phil Mickelson, Vijay Singh and Ernie Els. These are players who routinely command between €1.95 million and €4.7 million a year from their equipment suppliers, with performance-related bonuses of up to €0.77 million for Major victories.

With Callaway and Bridgestone rumoured to have been in the running for Harrington’s signature, the fee for his services could have been higher still.

“His philosophy is ‘why change a winning formula?’,” says Mitchell, talking to The Irish Times at IMG’s European headquarters in west London. “He has achieved success and there are a number of reasons for why that has happened, but using the right equipment is certainly one of them.”

Mitchell, like Harrington, is an accountant by training (“we tend to think alike”) and has been the Irishman’s agent since the day he turned pro in 1995, a time when the job of agent was to ensure the player made enough money from endorsements to cover his costs. Back then, the break-even figure for a young tour pro was in the region of €34,422. These days it is more like €57,354 when travel and accommodation costs are factored in.

Harrington’s steady improvement as a player was matched off the course. Having played Maxfli clubs and balls as a three-time Walker Cup amateur and in his first years as pro, Harrington signed with Wilson in 1998. Irish-based clothing company Kartel had been signed up in 1996 and Dublin company MMI Investments the previous year.

Mitchell is one part of the heralded “Team Harrington” – a close-knit group comprising his wife Caroline, coach Bob Torrance, caddie Ronan Flood and psychologist Bob Rotella, among a handful of others who provide support and stability off the course.

“A player looks for stability to be consistent,” says Mitchell, pointing out the Wilson deal obliges his player to carry at least 10 of the company’s clubs in his bag. “It doesn’t really make sense to jump ship for higher financial reward, because it might jeopardise performance, which would inevitably impact on his commercial value.”

There are plenty of examples of golfers ditching club makers for big cheques, only to find their form drop away. “Golfers are measured by their success on the golf course, where there is also, obviously, prize-money available,” says Mitchell. This is an understatement. It is Harrington’s good fortune to be a professional golfer in the Tiger Woods era – Tiger turned pro in 1996, a year when nine players made over a million dollars on the PGA Tour. In 2008, the same tour boasted 78 millionaires. The total purse in the decade before Tiger’s arrival, 1986-96, grew by €29.1 million. In the 10 years after 1996, prize-money increased by €145 million.

Harrington has amassed around €16.1 million in prize-money in his 12-year career as a professional and last month Golf Digest estimated his off course earnings in 2008 were €9.3 million, placing him ninth in the world in terms of combined on and off course earnings. Next year he is likely to be a few notches higher, given the calculations did not take into account his most recent deals.

There is a dizzying array of commercial opportunities available to today’s top golfers. Apart from personal sponsorships, other sources include appearance money, corporate golf days, speaking engagements, licensing fees for video games or trading cards, course architecture, books and instructional videos.

Mickelson was paid a seven-figure sum to tee up at the HSBC event in China last autumn and Harrington was rumoured to be paid “high six figures” to play in Abu Dhabi in January.

When he is selling Harrington’s name, Mitchell is essentially offering two things: time and space. FTI have paid to rent the space on the player’s visor, the value of which is based on a finger in the wind estimate: the equivalent media value of advertising.

In addition, time is spent fulfilling other elements of the contract, says Mitchell. “Every deal is different, some primarily acquire rights to use his name, image and endorsement in advertising and promotions, which could involve photo shoots or filming.

“We aim to protect his practice time, fitness time and family time.”

This balance came under pressure after Harrington’s first Open Championship victory, at Carnoustie in 2007, when the player was overwhelmed with requests from the media and well-wishers. “He suffered from fatigue and caught shingles, which hampered his winter break,” says Mitchell.

“After his win at Birkdale he didn’t celebrate as much, he learnt his lesson, and his focus was immediately on the US PGA. Other than a press conference at Birkdale the morning after the final round and fulfilling a commitment to play in a charity day in the afternoon, we arranged a press conference at the end of the week in Dublin and that was pretty much it. And it proved the right way to go as he was relatively fresh going into the US PGA.”

At 37, Harrington is at the peak of his career, and if he manages his affairs well, the money will continue to flow in long after his major winning days are over. Of the top 10 highest earning golfers in 2008, three – Arnold Palmer, Jack Nicklaus and Greg Norman – make their money almost entirely away from the golf course.

To achieve this sort of longevity, these legends of the game have turned their name in to an international sports brands, able to be attached to countless products from clothing and golf courses to wine and, in Greg Norman’s case, turf grass (last year’s Super Bowl was played on a surface called GN1, developed by Norman’s own company Great White Shark Enterprises). Nicklaus’ name is, to date, attached to 337 courses around the world, each attracting a fee of around €1.6 million.

For their part, IMG have managed many of the biggest names in golf since the company was founded on a handshake between Arnold Palmer and the company’s founder, Mark McCormack in the late 1950s.

The company’s cut of a player’s earnings is an agreed percentage of commercial revenue and these days IMG’s star client is Tiger Woods, whose business dealings the company have handled since he turned pro. This is a lucrative arrangement given Woods’ on and off course earnings are likely to reach the $1 billion mark over the next two years. Remarkably, money from commercial deals account for seven times his winnings on the pro tours, according to Golf Digest.

IMG’s fee structure has encouraged several high profile players – Norman, Nicklaus and Tony Jacklin among them – to break away and attempt to go it alone over the years – to varying degrees of success. Of these, Norman has been far and away the most successful, accumulating a fortune in the region of €388 million, according to Forbes magazine.

But the current economic climate has undermined the golf business as it has every other area of the global economy. The consensus view in the sports business is that elite sports properties will remain popular among sponsors and television – in golfing terms this means the Majors, the Ryder Cup and a small handful of other events around the world – but that the rest of the market is in freefall.

This rule also applies to player endorsements. According to one agent, there are still high-seven-figure deals available for star players, but those outside the top 10 face a major slump in fees.

Even the great Woods is not immune. His €6.2 million-a-year deal with car maker Buick was cancelled late last year, because it was seen to be inappropriate at a time when the American car industry is going cap in hand to new President Barack Obama to the tune of €39 billion.

“I’ve been doing this for 15 or 16 years and this is the worst year yet,” said agent Andrew Witlieb, who works on behalf of Jim Furyk. “You look next year you’ll see the fewest new deals you’ll ever see.”

Harrington may prove to be one of the exceptions to that rule. His run of form shows that in golf, as in life, timing is everything.

His sponsors

Bank of Ireland; Footjoy: golf footwear; FTI: international consulting firm; Kartel: Irish-based clothing company; The Marlbrook: Harrington- designed golf course in Clonmel, Co Tipperary; Oceanico Group: property developer in Portugal; Titleist: golf balls; U4EA Technologies: communications technology; White Oak: golf course in Tryon, North Carolina; Wilson staff: golf clubs