Arnold Palmer Invitational: The King's brand remains business royalty

Golfweek File Photo

Arnold Palmer Invitational: The King's brand remains business royalty

PGA Tour

Arnold Palmer Invitational: The King's brand remains business royalty

(Editor’s Note: This story originally appeared in the Oct. 3, 2016 issue of Golfweek.)

Arnold Palmer Invitational 2017 Tee Times Fantasy RankingsAbout 1980, IMG agent Alastair Johnston made a difficult decision regarding Arnold Palmer, his biggest client.

At the time a chain of Arnold Palmer-branded retail stores was growing in Asia, backed by imagery of the still-vigorous icon. Johnston, however, decided that he needed to remove images of Palmer from the Asian business.

The decision initially did not sit well with his client.

“Do you not like me?” Johnston recalled Palmer asking him. Johnston was thinking long-term.

“If this brand is going to be sustainable, we’ve got to make it more about the story that you’ve built – iconically an American brand at its root,” Johnston said he told Palmer.

Johnston knew that age would exact a toll on the global image of Palmer, and that the day would come when “The King” no longer would be around to promote his brand.

That day came last Sept. 25 with the death of Palmer at age 87. Before Palmer’s death, Golfweek talked with some of his business associates about his legacy.

Arnold Palmer Invitational 2017 Tee Times Fantasy Picks

Arnold Palmer’s brand remains as strong now as it was during his heyday as a player. (Golfweek File Photo)

Long before there were Tiger Woods and Rory McIlroy with their nine-figure Nike contracts; before there was Greg Norman and his global portfolio; even before there was Jack Nicklaus and his many business interests; there was The King. He crisscrossed the nation (often flying his own plane) and circled the globe, the embodiment of a quintessentially American story that was irresistible to consumers: handsome, talented, virile, swashbuckling and always approachable.

He won seven major championships among his 62 PGA Tour events, cementing his legacy as one of the game’s all-time greats. But it was his larger-than-life persona and enduring bond with the sporting public that set him apart from his contemporaries and those who followed.

“Arnie was the most athletic, energetic, exciting golfer ever. Whether he’s the best was irrelevant,” said Russ Meyer, a co-founder of IMG and Palmer confidante for more than 55 years.

More than 52 years has passed since Palmer’s last major championship in 1964, and more than 43 years since his final PGA Tour victory. Yet the fact that he was largely a ceremonial golfer in recent decades hardly mattered. Retirement, Johnston said, had no effect on Palmer’s earning power.

Forbes, in fact, estimated that Palmer earned $40 million in 2015, and other media sources estimated that his net worth pushed $700 million.

Arnold Palmer, center, wasn’t always pleased with the goings on in golf. (AP Photo)

The Palmer brand has been such a juggernaut for decades that it’s easy to forget that The King did have some public dust-ups in his career.

“He’s been single-minded in certain issues, where he’s probably taken the less-popular view,” Johnston said.

Johnston reminded that Palmer and Nicklaus helped drive the creation of the PGA Tour in the late 1960s. And despite Palmer’s close ties to the U.S. Golf Association, in 2001 he came out in support of sponsor Callaway Golf’s ERC II driver, which did not conform to USGA regulations.

That move prompted harsh criticism even from some of his most avid admirers. That included this magazine, which ran a critical editorial under the headline “Benedict Arnold.”

“It hurt him a lot,” Johnston said. “He was personally hurt, and he had to take responsibility for it. He couldn’t point the finger at anyone else.”

Through it all, Palmer’s popularity with consumers never waned.

IMG liberally licensed Palmer’s name to hundreds of companies in the U.S. and abroad during the past six decades. But he’s perhaps best known for business ventures that were particularly dear to his heart.

In 1965, Meyer arranged an exhibition match between Palmer and Nicklaus at Bay Hill Club in Orlando, Fla.

“Arnie shot 65 and said, ‘I want to buy this place,’ ” Meyer said.

Palmer bought it five years later, and the resort became his winter home and a fixture on the PGA Tour’s Florida Swing, annually drawing some of the best fields for a non-major.

For resort guests, the Bay Hill experience wasn’t complete without the chance to meet Palmer, who regularly could be found riding along the practice tee or around the course, shaking hands
and posing for pictures.

Arnold Palmer was an experienced and serious pilot. (Golfweek File Photo)

Aside from golf, one of Palmer’s greatest passions was aviation. He earned his pilot’s license in 1956 and bought his first plane in 1961.

After Meyer left IMG in 1966, he became an executive in the aviation industry, first as CEO of Grumman American Aviation Corp., before spending 31 years as chairman and CEO of Cessna Aircraft Co. (He has been the company’s chairman emeritus since 2005.)

Meyer said Palmer owned seven Cessna Citations – he gave up his pilot’s license in 2011, at age 81 – but became more than merely a customer and endorser. Palmer, an expert pilot, occasionally was recruited to host engineering briefings with Cessna customers.

“He was very comfortable (discussing the planes) and had a great level of credibility,” Meyer said.

In 2009 when auto-industry executives were disparaged by President Barack Obama and members of Congress for flying corporate aircraft to Washington for hearings, Palmer, Neil Armstrong and Warren Buffett were recruited to appear in advertisements promoting private air travel.

“From the standpoint of industry issues, whether it’s user fees or tax credits, anytime there has been a major industry issue, Arnold is one of the first people we call on to help,” Meyer said.

“He has not only been a very credible and effective ambassador for Cessna, but he has been a great spokesman for the industry.”

Izzy DeHerrera works on the Golf Channel’s Arnold Palmer documentary. (Golfweek File Photo)

Ironically, Palmer almost passed on the business that has had the most significant impact on the game he loved: Golf Channel.

Palmer had gotten to know cable executive Joe Gibbs when he stayed at his home at Shoal Creek in Birmingham, Ala., during the 1990 PGA Championship. Gibbs later pitched the idea of a 24-hour golf cable channel, which Palmer thought “was a little ridiculous,” Johnston recalled.

Gibbs remembers it differently: “He saw the potential of it the first time I talked to him about it.”

Palmer had IMG help put together a programming plan for the prospective channel. Gibbs pushed forward with plans, but insisted that Palmer commit some of his own money if he wanted a piece of the company.

“Arnold said, ‘I’ve always gotten what I get for my name,’ ” Gibbs recalled shortly after Palmer died. “I said, ‘This is going to be different. I’ve got to raise a lot of money’ – our projections showed it was $100 million to break even – ‘and I want everyone to know you’ve got skin in the game just like I do.’ ”

Palmer wavered on his commitment, and his IMG handlers questioned whether he should get involved. “There was a lot of heartache,” Johnston said.

Ultimately, Palmer’s willingness to take risks – so evident during his playing career – led him to join Gibbs’ venture.

In recent years, Palmer became an adviser and confidante of Mike McCarley, president of NBC Golf, who was less than half of Palmer’s age. McCarley said when he was young, his grandmother watched Palmer on TV on weekends.

“So I always had this special place in my heart for him,” McCarley said the day after Palmer died. McCarley said when he moved to Orlando in 2011 to run Golf Channel, Palmer took him under his wing.

“After I got to know him, my wife used to joke that my best friend in Orlando was 80 years old…” he said. “He embraced me and did a lot of little things that, looking back on it, helped ensure success.” McCarley has said that he leaned on Palmer for insight about how the golf industry has evolved, in hopes of gleaning lessons to direct Golf Channel’s future course.

As with McCarley, Palmer’s relationship with consumers has been more than just a business transaction.

Arnold Palmer is known as the “iced tea guy” to millions of younger Americans who never saw him play on TV. (Golfweek File Photo)

What has been striking through the decades has been the breadth of The King’s demographic appeal. Consider the eponymous Arnold Palmer beverage, which all golfers know is a mix of lemonade and iced tea.

Innovative Flavors LLC launched Arnold Palmer Tee with the expectation that golf clubs would be the company’s primary customers. But Mark Dowey, one of three founding partners of Innovative Flavors, said his company soon began receiving calls “from golfers’ wives saying their husbands were seeing the drink at their clubs but couldn’t find it anywhere else.”

It became apparent that there was “a great deal of upside potential,” Dowey said. So in 2002 his company licensed AriZona Beverages to expand the distribution.

It has grown from one product to more than 50, becoming nearly a $300 million wholesale business just in the U.S. in 2015, Dowey said.

Along the way, Dowey realized what Johnston understood all those years ago: Palmer’s appeal wasn’t limited to his contemporaries. Many people drinking Arnold Palmers are in their teens and 20s.

“That demographic corridor had never seen Arnold Palmer swing a golf club,” Dowey said. “There was a real identity connection between Palmer and the baby boomers, and all those young 20-year-olds saw him as ‘the tea guy.’”

During a 2015 interview, Dowey said he saw no end to Palmer’s appeal. “He’s as priceless today as he’s ever been,” Dowey said.

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