The Economical Impact of The Masters Golf Tournament

Each year, in early April, comes a very special event for golf fans and those PGA Tour Professionals lucky enough to get invited. That being The Masters Tournament, the biggest weekend in golf, played each year at arguably the most iconic course in the world, Augusta National in Augusta, Georgia.

12th hole

(The beautiful and historic 12th Hole)

Now, with such an incredible tournament comes an incredible boost to the economy in the Augusta area. The tournament, as a whole, is estimated to have an economic impact of $117.5 million. An estimated 250,000 people are projected to travel to Augusta from around the world. This skyrocket in visitors strongly effects Augusta’s GDP. Looking at the equation, Y=C+I+G+NX, these patrons positively impact Consumption (C). With hotels selling out years in advance, fans flock to local restaurants and stores in search of food and Augusta merchandise and memorabilia. In past years, the hotel industry has generated $9.75 million on tax collections alone, 203% more than the average month. In addition to hotel and merchandize sales, the tournament provides more growth to Augusta’s capital, for example, consumption of transportation and other entertainment.

Also, important to note, due to the massive increase in demand for goods and services, the local companies and institutions spike their prices. Higher-star hotels, such as the Augusta Marriott at the Convention Center and the Partridge Inn, advertise rates on their websites of $660 and from $999 to $1,209, respectively. These hotels typically range from $92 to $160 on a normal weekend night in April.

Along with this large impact on the local economy, The Masters plays a crucial role in economic growth for companies on an international scale due to advertisements, broadcasting and ticket sales. The Masters is the most-watched golf event in the nation, with an estimated 5 million viewers on opening day and more than 30 million viewers during the final round. With such great ratings comes a total cost of $25 million for international broadcasting rights. Some advertisers will pay between $6 and $8 million for ad time during the telecast. In addition, The Masters brings in over $35 million in ticket revenues.

To some it up, this incredible tournament does not only provide utility for golf fans and professionals around the world, but also substantially impacts the economies of Augusta, the United States and beyond. And for good reason:

special augusta .jpg

tiger masters.gif

bubba masters

Sources:

http://www.ongeorgia.org/business/economic-impact-of-the-masters.html

https://wallethub.com/blog/masters-facts/2965/

http://chronicle.augusta.com/news-metro-business-local-business/2015-04-03/prices-rising-steeply-augusta-masters-week

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8 thoughts on “The Economical Impact of The Masters Golf Tournament

  1. nickbotta

    Nice post Jack! I really like your gifs, especially the one of Tiger Woods. It is evident that the economy of Augusta relies heavily on Masters week. I wonder what would happen to the local economies if they stopped holding the Masters at Augusta National. It would be interesting to see if Augusta could function without the yearly influx of capital that the Masters brings in.

    Reply
  2. Victor Matheson

    Interestingly, the fact that hotel prices at the Marriott skyrocket actually means the Masters has less economic impact than one might think. Normally about 2/3 of the cost of a hotel room goes to pay employees. But when the hotel prices go up back a factor of 10x, the hotels don’t increase the wages of their employees by a factor of 10x. Thus, lots of the extra profits go back to capital holders at the corporate headquarters in New York City or around the globe. This means that the multiplier falls – by a lot.

    Reply
  3. mattfitz87

    Cool post, Jack. With the Masters commonly considered the best of the best when it comes to golf tournaments, I wonder how its economic impact compares to other majors?

    Reply
  4. mikelaffin22

    Nice post Jack! I love watching the Masters every year. The influx of people to the Augusta, Georgia area every year for the event will have a positive economic impact on the local area as you pointed out. I read an article last week that talked about how memorabilia sold at the Masters Tournament is very expensive because they know that everyone will most likely buy some sort of shirt or coffee mug for example to remember their trip to Augusta. I wonder if this spike in prices helps the local economy or if the PGA benefits from this added revenue. I can’t wait for next year already.

    Reply
  5. evanmegan

    This is a nice post, I never knew about the economic impact of the Masters. I wonder if the Masters also has an impact on the sale of golf clubs?

    Reply
  6. Johnny Coughlin

    Cool post Jack! I read an article stating that the beers only cost 2 dollars at the Masters. This is an interesting thing at Augusta and maybe it is an incentive to continue to drink cheap beers and then in end spend more money on things like food or merchandise? Also, it is interesting because the Masters is in the same spot of every so is the event really stimulating the economy or is the event simply a part of the economy?

    Johnny Coughlin

    Reply
  7. khoran13

    I wonder what the economic impact would be in comparison in a different U.S. location. It could be interesting to see if Augusta is similar to a different location or if the tournament was held in a more financially unstable location if the profits would be even greater due to the presence of the Masters.

    Reply
  8. rjdowd19

    It is amazing just how much profit the Masters tournament brings in from advertisements, ticket sales, hotel room purchases, etc. For such a popular U.S. event that brings in great revenue, it is surprising how little of an effect on wages it has as Prof. Matheson pointed out.

    Reply

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