Golf legend Arnold Palmer died on Sunday at 87, and as every remembrance notes, Palmer was known as “The King” of the sport. He did not win the most Majors of anyone (that record belongs to his peer, Jack Nicklaus, with 18 Majors) but he was golf’s first big star once the sport became televised. He was an “everyman” from Latrobe, Pa., and is credited with helping to ease the sport’s reputation as rich and elitist. “Arnold embodied the hard-working strength of America,” said Nicklaus in a statement.
Palmer was also the “king” of business ventures off the course.
While many first associate Palmer with his trademark drink of choice, iced tea and lemonade, the drink didn’t come along until he had already established himself as a bankable brand name.
It started in 1959 when Palmer signed with sports agent Mark McCormack, becoming the first client of McCormack’s mega-agency IMG. Soon, the two took a new look at Palmer’s sponsorship deal with Wilson; they didn’t feel he was getting his due. Palmer wanted Wilson to add in a life-insurance policy that would cost the company $880 a year. Wilson balked. (It is an anecdote in the same vein, though not quite as famous, as Adidas passing on Michael Jordan.)
Palmer walked from Wilson and created his own company, Arnold Palmer Golf Co., which made clubs and apparel. He also created Arnold Palmer Enterprises as an umbrella company. He came up with his own logo – an umbrella – and trademarked it in 1968, and put it on everything.
China alone is home to some 500 Arnold Palmer brand stores that sell everything from hats, polos, belts and ties (the usual fare) to spa products. His company has partnerships with Callaway, MasterCard, and Nike. (Last year Nike created the “LeBronold Palmers,” a LeBron James sneaker in iced-tea-and-lemonade colors.)
The distinctive mark of the umbrella with Palmer’s name in cursive was like the Michael Jordan “Jumpman” logo of golf, long before the Jumpman.
Palmer became a television pitchman, shooting ad spots for United Airlines, Cadillac, Coca-Cola, Hertz (including one with OJ Simpson), Pennzoil (an endorsement he kept for his whole life), Allstate, and others. He kept advertising for products until the very end, appearing in an ad for the blood thinner Xarelto just last year with basketball player Chris Bosh and actor Kevin Nealon. (Advertising for scores of American brands is how the boxer George Foreman made his mint as well.)
He launched a golf course design company, a practice now commonplace among golf stars, including Greg Norman, Tiger Woods, and many more. And when IMG sold to William Morris Endeavor Entertainment (WME) in 2013 for $2.4 billion, Palmer, who had a 10% stake, made hundreds of millions.
Many people may not know that Palmer co-founded The Golf Channel, the first all-golf cable network, with television entrepreneur Joe Gibbs in 1995. The pair used $80 million in funding and sold it to Comcast (CMCSA) in 2000. In 2006 Golf Channel acquired the rights to the PGA Tour, and in 2011 Comcast took a majority stake in NBCUniversal and moved Golf Channel under NBC’s umbrella.
Not until the early 2000s did Palmer sell the name rights to his favorite drink to AriZona Beverage Company, but by then, iced-tea-and-lemonade was the least of Palmer’s income streams. The Arnold Palmer line of drinks still makes up 10% of AriZona’s sales, and hit $200 million in annual sales last year. In other words, as Palmer has aged, the drink has only grown in popularity.
When 27-year-old Rory McIlroy won the Tour Championship over the weekend, he earned a $10 million bonus. Palmer, in his entire pro career on the course, made only $2.1 million in PGA Tour winnings, and less than $7 million total if you add Senior PGA Tour and foreign winnings. Consider that difference.
McIlroy makes tens of millions per year off the course, too, in endorsements from companies like Nike (NKE) and Bose. Palmer is the reason for that—along with his two peers, Gary Player and Jack Nicklaus.
We cannot discuss Palmer’s business decisions without also examining those of Player and Nicklaus. Together, Palmer, Player and Nicklaus are called “The Big Three” of golf. It was McCormack who coined the term, with a TV series called “Big Three Golf,” in which the three played each other in exciting venues all over the world.
The Big Three played off one another in the business world, though Player has been more hesitant than Palmer and Nicklaus to attach his name to a wide range of products.
While Palmer was branded as “The King,” Nicklaus is the “Golden Bear” and Player is the “Black Knight.” Greg Norman, too, known as “The Shark,” has had great success with his line of apparel. Developing a personal brand, with logo and nickname, is something no current golfers today have managed to pull off, though Tiger Woods has his TW logo (within Nike) and Jordan Spieth has his own logo from Under Armour (UA). To make your own name a global brand requires not just business savvy, but a unique reputation and legacy.
Billy Payne, chairman of Augusta National, has verbalized those unique legacies every April since 2010, when he introduced the three at the ceremonial tee-off at The Masters. This year, for the first time, Palmer did not hit a shot—but he still showed up.
Payne always calls Player “golf’s great global ambassador,” and notes that he “competed in a record 52 Masters.” Indeed, Player travels the world, promoting the game of golf, and his entire business persona plays off his longevity and physical fitness.
Payne calls Nicklaus “a gentleman whose record at Augusta National remains unmatched, even to this day.” Nicklaus’s record defines him: his name is first associated with 18 Major wins, a record once thought vulnerable to Tiger Woods, but no longer.
As for Palmer? Last year, Payne just called him, “still The King.”