The $25 million (€21.8 million) settlement paid by Rory McIlroy to his former management company Horizon Sports Management is a “small price to pay” for the golfer, according to the editor of the Highest-Paid Athletes list with Forbes magazine.
In an interview with The Irish Times tonight, Kurt Badenhausen said the settlement was “good for Rory McIlroy’s brand” and that while the sum of money involved was “huge”, the earning potential for golfers, and particularly McIlroy, means it is not likely to affect him adversely.
“From Rory McIlroy’s brand standpoint, the best thing he could do was settle this, move on, and focus on golf,” said Mr Badenhausen. “It’s a huge sum of money . . . but golfers though are a little different to most athletes.
“An American football player typically has a three- or four-year career. A golfer can have a three- or four-decade career, so the earnings potential for the very best players are decades long. Tiger Woods has earned over $1 billion in his career. If you look at it from that standpoint, it’s a small price to pay for his financial freedom.”
In early 2013, McIlroy put his signature to one of the most lucrative contract deals in sport: a five-year association with Nike reputed to be worth $250 million and also signed significant deals with Bose, the audio equipment company, and Omega, the luxury Swiss watch manufacturers.
According to Forbes, McIlroy’s earnings from June 1st, 2013 to June 1st, 2014, included a salary and winnings of $4.3 million and endorsements of $20m, totalling $24.3m. He is ranked 35th in the magazine’s world’s-highest-paid athletes.
Richest market
Mr Badenhausen said McIlroy has “tremendous potential to be a global superstar” but said it would be difficult for a non-American to take over the mantle of Tiger Woods and conquer the US market. “It is tricky in the US market to be that guy as a non-American,” he said. “If you take the biggest stars in the game from Europe and Australia, it has been hard for them to really break through in a big way in the US, which is the richest market in terms of sponsorships for golfers.
“But golf, at this point, is truly an international game. Rory has the potential to generate significant sponsorship opportunities in Europe, in Asia, as well as command huge appearance fees, particularly in Asia, which presumably he will continue to do.
“The two top guys in the sport for so long – Tiger Woods and Phil Mickelson – they’re closer to the end than the beginning, so companies that want to get behind the guy who could be the most dominant player and brand in the sport over the next 15 years have to look at McIlroy.”
He said the key to marketing success for McIlroy would be in reaching non-golf crowds. “To be able to command $4million to $5 million from every endorsement deal you do – and only a handful of sportspeople in the world can do that – you really have to break out of your sport,” he said. “That’s the challenge with McIlroy, to be appealing to that casual fan who doesn’t necessarily watch golf, but when McIlroy is in contention, they are going to tune in and watch.”
In terms of surpassing Tiger Woods in terms of marketability, Mr Badenhausen said McIlroy “has got some work to do before he can catch up to that level but I wouldn’t bet against him”.
