For someone who was a mediocre student, never finished college and hasn’t held a steady job for more than a half-century, Arnold Palmer has done alright for himself. This is really all you need to know about Arnold Palmer the businessman: In 2013 he ranked second on Forbes magazine’s annual list of highest-paid retired athletes, taking in an estimated $40 million. That was second only to Michael Jordan’s $90 million. And compared with active golfers, Palmer made more money than any PGA Tour player except Phil Mickelson and Tiger Woods.
It was Palmer’s most lucrative year ever.
That’s a lot of lemonade-flavored iced tea (or is it iced-tea-flavored lemonade?). A lot of umbrella-logoed golf shirts. A lot of Pennzoil.
Wait, Pennzoil? That is so last millennium. The 21st-century Arnold Palmer product is more likely to be Palmer-licensed footwear or fashion, marketed to teens in Asia.
“It's funny how the logo is very popular in Japan,” said Andy Wada, an announcer for Golf Channel Japan. “You walk down the street in Tokyo and you probably see a lot of teenage girls wearing the umbrella logo” on their skirts or shoes. The typical Palmer-logo-wearing girl almost certainly doesn’t play golf, doesn’t know anything about Palmer. “It’s just she likes it and she thinks it's cool,” Wada said. “It's kind of fascinating.”
It shouldn’t surprise that Palmer, whose 85th birthday is Sept. 10, remains one of golf’s top earners more than 40 years after the last of his 62 PGA Tour victories. Retirement is no impediment to earning power. Nor, apparently, is death. The top earner on Forbes’ Celebrity 100 list for June 2013-June 2014 was singer Beyonce, but her estimated $115 million paled in comparison with the estimated $160 million earned by Michael Jackson during the same period a year before. Jackson died in 2009.
Palmer’s ability to remain competitive in the endorsement world long after his playing days is no accident. It’s a result of the marketing strategy developed by his longtime business manager, the late Mark McCormack, founder of IMG.
“McCormack was smart enough to realize that, let’s not sell Arnold Palmer as a winner because his opportunity to win golf tournaments is going to have a fairly short shelf life,” said Ian O’Connor, author of "Arnie & Jack." “Let’s market him as your next-door neighbor, as a successful man you want to spend time with, who would give you the shirt off his back. It was a brilliant strategy because it worked for decades. Nobody could knock Arnold off that endorsement mound. It wasn’t, ‘Arnold Palmer the greatest golfer in the world.’ It was, ‘Arnold Palmer the greatest guy in the world.’”
McCormack and Palmer, who had briefly crossed paths as college golfers - Palmer at Wake Forest and McCormack at William & Mary - began their professional relationship over a handshake in 1960. McCormack had to agree to represent only Palmer, a promise that Palmer would soon let him out of.
In Palmer, McCormack had a dream client. Not only was he a skilled player, he oozed charisma. Lean, tanned, with a weathered outdoorsman’s rugged looks highlighted by tautly muscled forearms, Palmer also held nothing back from his fans. Unlike most pro golfers of the day, who treated stoicism like a 15th club in their bag, Palmer never tried to hide his emotions. He played a power game – even then, chicks dug the long ball – and always went for the heroic shot. He won by going all out, and lost the same way. And when the round was done, he signed autographs in a novel way – as if he enjoyed it, always making sure his signature was legible.
The fans – most of whom were introduced to Palmer through the still-new technology of television - loved him, and so did the corporate world. Some of the deals he signed led to iconic relationships that long outlived their contracts.
A few of the best known:
Pennzoil: In TV ads, Palmer referred to the tractor that he and his father used for maintenance at Latrobe Country Club as “my old friend.” Turns out, that was a stretch.
“That tractor had caused me a lot of grief through the years because my father was on my case all the time,” Palmer said. Skidding the wheels, sliding down the side of a hill – anything like that was sure to incur Deacon Palmer’s wrath. “So the tractor was an interesting subject. We started doing [commercials featuring the tractor] and people caught on to them and they were very successful.”
Arnie: Pennzoil poster boy
The tractor resides in a warehouse at Latrobe CC, but when outings are scheduled it’s often parked beside the first tee.
The umbrella logo: Looking for a symbol for his brand, Palmer would periodically send associates out to see what was available. “Every time they came home they’d say ‘Arnie, there’s a lot of things you can use but you’re gonna have to pay a price for them.’ Of course being a little frugal, that was not gonna sit well with me.”
One day Palmer, McCormack and some associates were meeting in a hotel in Lancashire, Pa. “It was raining outside and a lady got out of her car and she quick put her umbrella up and it was various colors,” Palmer recalled. “But anyway, I saw it and I turned to the group and I said ‘Has anybody checked the umbrella? Maybe we could use an umbrella as our logo.’”
Hertz rental cars: You can’t watch those old commercials featuring Palmer and O.J. Simpson without cringing, given what has become of the former football star. But there’s no denying the two men had on-screen chemistry. Hertz remains proud of its association with Palmer. In May the company celebrated the 30th anniversary of the relationship, noting that “the partnership is the longest relationship Mr. Palmer has had with a corporate sponsor.”
One strange coincidence regarding Palmer and Simpson: On the day that Simpson was being chased by police in the infamous white Ford Bronco (June 17, 1994), Palmer was playing his final round in a U.S. Open.
The ‘Arnold Palmer’ iced tea and lemonade drink: “I was mixing iced tea and lemonade in my kitchen since as long as I can remember,” Palmer once told Interview magazine. “It wasn't until sometime in the early 1960s that it became associated with me publicly. I was playing golf in Palm Springs and after a round I asked the waitress in a restaurant to bring me a glass of iced tea and lemonade. A lady sitting nearby heard me and asked the waitress to bring her a ‘Palmer,’ too.”
As a pitchman, Palmer still hasn’t lost his touch, even in his 80s. Last year he appeared with Tiger Woods and Lee Trevino in a martial-arts-style commercial for Woods’ EA Sports video game, Tiger Woods PGA Tour 14.
What makes Palmer such a desirable product spokesman?
“When he attaches his name to something, people know it’s going to work,” said Golf Channel President Mike McCarley. “And people want to be associated with him so they want to be associated with projects that he’s involved in.”
“The reason that Arnold was such a good pitchman is that he looked very accessible to you,” said broadcaster Al Michaels. “It wasn’t as if he was on some sort of a throne and he was not approachable. I think the fans felt that they could engage with him. Just the way he walked down the fairway, the way he would engage with the gallery, his manner, just the way he looked, he looked like the kind of guy that you could approach and be a pal with.”
The way Jaime Diaz, editor-in-chief of Golf World, sees it, consumers simply trust Palmer. “When I was a kid, we went to Arnold Palmer Cleaners,” Diaz said. “What connection is there with cleaners and golf? Nothing, except I know Arnold Palmer won’t mess up my clothes. Arnold Palmer is going to stand behind the quality of this establishment.”
Palmer’s most enduring business achievement, however, may be his role in the founding of Golf Channel, which first went on the air in 1995.
The idea came from Birmingham, Ala., businessman Joe Gibbs, who wanted Palmer involved. “There was a time when he had committed to be my partner, but then his handlers would tell him it was too risky,” Gibbs said. “And some time had gone on, a year and a half, and he said, ‘I just don’t know if I can do this.’ I flew to Orlando and I met with him in his conference room at Bay Hill and several of his people were there and they were just telling him ‘You can’t do this, Arnold. It’s too risky.’ Because I had been almost two years at that point trying to raise the money and I wasn’t successful. And Arnold looked around the room and said, ‘Gentlemen, if I hadn’t tried to hit it through the trees a few times in my life, none of us would be here.’ They just shut up and after that he was committed.”
“You had to have a name behind it," McCarley said, "and there were a few names at the time that may have made business sense, but there was only one man who really had the charm and the charisma and the following to make something like this work.”
“I love the idea of the Golf Channel,” Donald Trump agreed, “but it would’ve never made it without Arnold.”
“There are certain sources of pride that he has, his golf accomplishments to his charitable work, but the Golf Channel is something that he really talks about business-wise,” said Arnold Palmer Enterprises vice president Cori Britt. “It’s something very special. He always took a special interest in it; he had an office there early on where he spent a little bit of time working with Joe, and even now when people talk about the Golf Channel, he’ll say, ‘You know, I helped build that.’”