Appearance Fees in Sport

Appearance Fees

a part of life for independent contractor athletes

Purists wince at the thought of them, but appearance fees are increasingly a part of the deal for athletes competing in individual sports. Guaranteed money is de rigueur for team sports, where athletes regularly demand a signing bonus or guaranteed money to change teams. But guaranteed money in golf, tennis, squash, snooker, darts, and running seems counter to the spirit of the competitions.

Why are appearance fees more prevalent these days? The business of sport is increasingly competitive with regard to sponsorship dollars and ticket sales. Though most tours are structured to require their top names to compete in the biggest events, mid-size tournaments still want to see at least a few stars. And they are willing to set aside money to guarantee their attendance. Additionally, now that sports tour monopolies  are becoming less common, upstart organizations are looking for competitive advantages.

Golf

The PGA of America, for example, forbids appearance fees in its tournaments. So Tiger Woods skipped PGA’s Torrey Pines in January and played an event in the United Arab Emirates as part of the European Tour, where he received a sizable check just for showing up.

According to Yahoo Sports[i], Tiger Woods received between $1.7 million and $2.7 million for playing the Abu Dhabi HSBC Golf Championship in the United Arab Emirates.

"A lot of the guys play all around the world, and they do get appearance fees,'' Woods told ESPN.[ii] "The only place we don't get it is the U.S.'' 

It is a mostly unspoken fact of life on the European Tour, a look-the-other-way reality that gives events such as this a big advantage in attracting players -- and leaves some PGA Tour tournament directors seething as their rules prevent them from doing the same. The Abu Dhabi event had a purse of $2.7 million. The appearance fees to attract top players were estimated to be in the neighborhood of $5 million, approaching twice as much as the tournament purse. Not surprisingly, 11 of the world’s top 25 players chose to go to Abu Dhabi.

Though the PGA of America forbids any appearance fees, some tournaments have built clever marketing deals with players with a wink and a nod to an implied assurance of participation. But a direct payment remains out of bounds.

The English newspaper The Guardian suggested[iii] that the European Tour’s paying million dollar appearance fees to players like Phil Mickelson may, in time, shift the balance away from the PGA. “The US Tour remains the world's richest tour and over the course of a long season it can be said to attract the best players. But for how much longer?” 

USA Today asked fans if they were ok with Tiger’s appearance fee[iv] and only 12% of fans objected to it.

The people who are more likely to object are the other players whose stature doesn’t yet command a fee or purist fans who would worry that an athlete won’t give his best if he isn’t fighting for every penny. But guaranteeing big names creates big buzz. And buzz is good for sponsors and attendance.

Of course, the world of golf is not the only sport where appearance fees apply.

Tennis

In 2010 the WTA announced it would allow appearance fees in all Sony Ericsson WTA Tour events[v]. The ATP has long allowed guarantees at tournaments below the Grand Slam and Masters level.

Regarding the ATP Tour, ESPN reported in 2011[vi], “playing Grand Slams and Masters-level events . . . is mandatory for ATP pros, but the rules allow 500- and 250- level events (the number is the ranking points earned by the winner) to compete for headliners by offering what are typically six-figure sums to take part.”

According to the Bleacher Report[vii], “The Dubai Duty Free Tennis Championships is the only ATP tour event that manages to attract all the top-level players in a one week, 32-player-size draw contest.” How do they do it? Appearance fees to players: Roger Federer, Novak Djokovic, Rafael Nadal and Andy Murray.    “The tournament distributes a total of $1,700,475 in prize money, and it is estimated that more than three times that amount is paid to the players in the form of appearance fees.”

Auto Racing

In 1986, AJ Foyt made headlines by refusing to show up for a race unless he received an appearance fee.[viii]  “Speed costs money, and I go real fast,” said Foyt.

NASCAR has the Winners Circle Program[ix]. This is a bonus award program that goes to the previous season's top ten winners, by number of races won plus the first two winners in the current season who aren't already in the program. This bonus helps ensure that the sport's big names go to every race.

NASCAR has an additional bonus paid out to any team currently in the top 30 in points which makes the race.

How a driver finished in a given race is only part of the total story. Depending on how they did last year, where they are in the points this year, which sponsor decals are on their car and several other factors could determine whether a driver earns more or less than another driver in the race.

Squash

According to Pro Squash Tour’s Joe McManus, PST has no rules preventing appearance fees. “Yes, when a club or sponsor requests a specific player, we have on occasion incented that pro to attend an event. Sometimes, you have two choices: guarantee a top player's attendance or don't do the event. We would prefer to do the event.”

Snooker

Last December BBC reported[x] on appearance fees which range from £3,000 to £25,000 for top players on the Snooker tour.

Darts

“The professional darts world circuit isn’t quite on the same level as golf or tennis . . . [but] with millions on offer in prize money and appearance fees, and the TV audience demanding some sort of spectacle, darts in the twenty-first century has come a long way. . .”[xi] 

Marathons

CNBC reported on agents telling marathoners not to participate in races when appearance fees were in question[xii].

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[i] http://sports.yahoo.com/golf/pga/news?slug=ycn-10905987

[ii] http://espn.go.com/golf/story/_/id/7493655/european-tour-plays-show-money-star-golfers

[iii] http://www.guardian.co.uk/sport/2011/jan/19/european-tour-pga-abu-dhabi-championship

[iv] http://content.usatoday.com/communities/gameon/post/2012/01/are-you-okay-with-tiger-woods-taking-appearance-money/1#.T8veVlL0_Hg

[v] http://www.tennis.com/articles/templates/features.aspx?articleid=3231

[vi] http://espn.go.com/tennis/story/_/id/6829700/tennis-how-la-survived-splurging

[vii] http://bleacherreport.com/articles/1090199-professional-tennis-the-dubai-championships-and-the-power-of-money

[viii] http://articles.sun-sentinel.com/1986-03-01/news/8601130090_1_foyt-preston-henn-grand-prix

[ix] http://nascar.about.com/cs/nascar101/a/payouts.htm

[x] http://www.bbc.co.uk/sport/0/snooker/16031545

[xi] The Rough Guide to Cult Sport, p. 99, © 2011,  Penguin Books

[xii] http://www.cnbc.com/id/30307506/Economy_Hits_Marathon_Appearance_Fees