A value proposition
How the upcoming Emirates Amateur Golf League can prove to be a financial windfall for team owners, investors and sponsors
The world’s first franchise-based golf league – the Emirates Amateur Golf League (EAGL) – is all set to commence its inaugural season in Dubai this November. The brainchild of Indian businessman Sudesh Aggarwal, the tournament is expected to become the first platform of its kind in the world to help elevate amateur golf and raise it to a higher level of consciousness – not only among the sport’s enthusiasts, but also among investors and major sponsors.
The round-robin format of the league will feature eight teams, with 24 players within each squad. EAGL is now inviting investors and corporates to sponsor these teams. It has proposed a one-time payment fee of $28,000 to purchase a team. It estimates that the team owner will have around $27,000 of cash expenses during the season, and will in addition, need to pay $275,000 per season as the recurring cost of the team to the franchiser. “The $275,000 a team owner pays to the franchiser is to partly bear the costs of hosting the league. This includes a majority of the spend they’d have to undertake to be a part of any golf tournament,” explains Aggarwal.
But investing in the league isn’t drawn up to be a cash drain for investors. Teams are expected to receive approximately $40,000 per season from the sponsorship deals that EAGL strikes for the entire franchise, with this figure projected to rise to $100,000 by the fifth year of the tournament.
While a corporate may choose to have other business houses join in and co-sponsor the team, investors stand to raise around $240,000 per season in team sponsorships. “A team owner has many possibilities to generate revenue from sponsorships of the team – like title sponsor, co-sponsors and banners. It also depends on the kind of investment they want to make into the team. So, if a team owner somehow manages to rope in Tiger Woods as a team mentor, he would obviously be in a position to charge much more from his sponsors,” adds Aggarwal.
As for attracting high-profile names, at a franchise level, EAGL already roped in Indian professional golfer Shiv Kapur as brand ambassador earlier this year. Dubai resident Kapur is a three-time champion on the Asian Tour and has won the European Tour twice. In 2013, he was the brain behind the Premier Golf League, which was based on the Indian Premier League cricket model and featured champions including Darren Clarke, Angel Cabrera and Michael Campbell.
EAGL says that at the end of the season, if a team owner wishes to exit, they can potentially charge up to $70,000 for the sale of their team. Given around $330,000 that they would have spent on owning and operating the team over the course of the season, and deducting that from the funds it received by way of sponsorships and other streams of income, EAGL says that the cumulative income in year one alone stands at $20,00. It could possibly rise to over $700,000 by year five as the sale price of the team, the amount that can be charged to sponsors and the percentage of revenue share that teams are eligible for from the franchise-level deals increase every season. “The franchiser shares the revenue it generates from the league sponsorships with team owners as they are considered to be ‘partners’ in the league. The model is financially viable for both type of investors i.e. corporates who wish to use this platform for furthering their marketing efforts and customer enhancement as the return on investment, through tangible and intangible benefits, is much higher than the money they put into the league. Individual investors who purely wish to invest for return on their investment, will also make money,” notes Aggarwal.
As Priyaa Kumria, the CEO of the India Trade and Exhibition Centre, Middle East, who is also the League administrator for the EAGL explains, the tangible and intangible benefits are numerous. The tangible benefits to each team participating per season is estimated to be in the range of $720,000 by way of costs borne by the franchise owner including $150,000 on F&B expenses, a caddie fee of $50,000, branding worth $220,000, media exposure in the range of $140,000 and a green fee of $120,000 for each participating team. “EAGL shall negotiate the best possible terms with the golf courses where the league shall be played. However, it has no impact on the teams, or the players as they will only pay the registration fee,” says Kumria.
The intangible benefits include a PR ad value of around $600,000 and potential networking opportunities with over 11,000 individuals through a mix of on-ground events. EAGL is expected to reach a primary audience of 670,000 people in the UAE itself, and 1.5 million people internationally due to the support of the Asian Pacific Golf Confederation which is represented in 42 countries.
EAGL has said that while it is still discussing broadcast options, it has guaranteed live broadcasts of the tournament on its social media handles.
“In year one, we are not looking for any revenue generating deals from the live broadcast, but this shall change once we have executed the inaugural event. We have a targeted reach through this medium for branding, product awareness etc. which has its own valuation,” says Kumria.
Other intangible benefits include the value generated from the on-ground events. As Kumria explains, there are 11 events – nine on each match day and two gala events which include the opening and closing ceremonies – that will generate added value to team owners, sponsors, partners and players.
As for the players themselves, the league will offer prizes in cash or kind, as per the rules applicable to amateur golfers. “There is no prize money for the winning team other than the trophy at the moment, but we are checking with R&A, the governing body of the game, if there can be prize money for the owner of the winning team,” says Kumria.
On a related note, a recent proposal by the R&A and the United States Golf Association, has opened the door to the possibility of amateur golfers being allowed to accept sponsorship (Tiger Woods famously had to wait until he went pro to sign a $40m deal with Nike), thereby allowing the player participants to potentially receive monetary benefits by way of their participation in the league too.
The UAE is the staging ground for the first season, though there is a very real possibility that it would subsequently be taken beyond the country’s borders.
“Once the inaugural event is delivered, we definitely plan to take the league to other countries and we have already received interests for the same as well,” says Aggarwal, making the league only more valuable in the long run.
“In year one, we are not looking for any revenue generating deals from the live broadcast, but this shall change once we have executed the inaugural event”