In all the days of their glory, Ben Hogan, Sam Snead and Byron Nelson among them sacked up slightly more than $2 million in prize money and fringe benefits—glittering testimony to the advantages of clean outdoor living and the overlapping grip. Two million is an untidy sum, even in these days of inflated purses, and none of the three needs worry where his next pair of alligator shoes is coming from. Yet it must occasionally occur to Hogan, Snead and Nelson to sorrow over the fate that dropped them into this vale of cash too soon, for, during 1962 and 1963, three other golfers will make more money than Hogan, Snead and Nelson made in 30 years. They are Arnold Palmer, Gary Player and Jack Nicklaus, who may soon have to abandon their present playing affiliations and register out of the Internal Revenue Service instead. For this, all three are eternally in debt to a precocious genie named Mark Hume McCormack.
No sport, least of all golf, has ever seen the likes of Mark McCormack. A tall, blond young man of 33 with the expression of an indignant owl, he is nominally the attorney for Palmer, Player and Nicklaus. In actuality, he is also their booking agent, investment counselor, tax consultant, publicity agent and one-man licensing corporation. In one guise or another he handles all of their contract negotiations, exhibitions and endorsements, creates and operates more than two dozen corporations in which they are involved, keeps their books, plans their itineraries, answers their mail, pays their bills. Most of all, he makes them rich. If Palmer, Player and Nicklaus do not become the first millionaires in professional golf, it will be only because Sam Snead beat them there and what it took Snead the major part of a lifetime to accomplish McCormack's three clients will have attained virtually overnight.
McCormack is a golfer of no small skill himself, having qualified for the National Amateur four times, but his primary contributions to the partnership are a sharp, incisive legal mind and an overpowering compulsion to convert his hot three into cold cash. The services that he renders have all been performed before, but always for celebrities in other fields, and never have the various offices been so coordinated under one man. With such positive control over the financial affairs of the three best players in the game, McCormack has been able to demand—and obtain—for his clients a kind of payment for television appearances, exhibition matches, instructional articles and the endorsement of products unheard of before.
"We have stopped giving these things away," says McCormack. As a result, he is on the verge of changing the economic structure of an entire profession. To the touring pro in search of a fast buck, Mark McCormack must look like the greatest thing to hit golf since the $100 Nassau.
November 12, 1962
Arnold Palmer is the best example of what McCormack hath wrought. By the end of 1959, Palmer was already considered one of the great players. He had won the 1958 Masters and seemed uncontested heir apparent to Hogan's crown as No. 1. By existing standards he was also a prospering young man. He was under contract to Wilson Sporting Goods Co., with a guarantee of $6,500 a year. He received between $750 and $1,000 for an exhibition match. He could pick up $50 or $100 any time that he decided to turn out a tip or instructional article. Endorsements brought him free golf shoes, free golf shirts, free slacks and free underwear for his wife. Including prize money, Palmer's total income for 1959 amounted to something like $59,000. This was far less than Ted Williams and Stan Musial were making out of baseball and would hardly have kept Eddie Arcaro in silk suits and big cars. But then tournament golf was never supposed to produce instant millionaires, only a comfortable living for the handful who could scratch their way to the top, and Arnold Palmer, apparently, was already there. Then McCormack came along.
This year Palmer has won over $80,000 in tournament competition, but, for the Palmer of today, tournament golf is only a means to an end. His total 1962 income, from all sources, will approach half a million dollars—and this is only the first, tentative assault on the mother lode. "We are just getting started," says McCormack, "yet I'll tell you how big this thing has already become. Arnold Palmer could quit playing golf right this minute, never win another tournament, and, for the rest of his life, he would be a very rich man."
The published annual income figures of $400,000 or $500,000, however, make McCormack wince. "They didn't come from me," he says, with a glance in the direction of the Bureau of Internal Revenue. "I really have no idea what Arnie—or Gary or Jack—will earn in 1962. Let me explain why.
"Every time Arnie wins a $10,000 tournament now, he gets to keep only about $1,500. Taxes get the rest. He commands $4,000 and up for an exhibition—but seldom accepts a flat fee since this, too, means playing for virtually nothing. Instead, almost everything we do is predicated upon the realization, not of salary, but of corporate income.
"For example, Arnie owns 75% of a company that will gross $50,000 this year. He owns 20% of another company with a much larger income. He has a stock option in a company whose value will increase by $300,000. He is involved in another venture that should guarantee him a quarter of a million dollars over the next 10 years. But none of this is in the form of salary. So when people ask what Arnie will make this year, I tell them that I don't know, because I don't. I can't even tell Arnie. But I can give him a net worth statement that is fantastic, and I'll tell you this: in 1963, Arnold Palmer's net worth will increase more than the combined earnings of Hogan, Nelson and Snead in any one year. Before taxes."
As a result of McCormack's efforts, this capitalistic club swinger is incorporated from his shoelaces to his ears. There are so many corporations that three of them—McBreck Enterprises, McTodd Enterprises and McDallie Enterprises—are named after McCormack's two toddling sons and their year-old Dalmatian dog. The Arnold Palmer Golf Exhibitions, Inc. promotes and sponsors all his exhibition matches, handling publicity, tickets, parking, concessions, everything. The host club gets a guarantee or a percentage, the corporation pockets the rest.
"ABC's Challenge Golf, the new television series that we are filming now," says McCormack, "has been called the most lucrative TV contract ever entered into by a sports personality. In addition to the prize money that Arnie receives, Worldwide Productions, an Arnold Palmer-controlled corporation, is co-producer and part owner of the show. The Arnold Palmer Putting Courses, Inc. should be the most profitable golf venture per dollar investment ever conceived. The Palmer-Player world tour is a gold mine; it's promoted and sponsored by Palmer-Player Productions, Inc.
"Arnie has just signed a contract with Sunstate Slacks, a Florida firm, to turn out a line of Arnold Palmer clothing, a venture that will run for at least 10 years, may run for 30 and should produce more than $1 million for Palmer. As you may know, we tried to buy up Arnie's contract with Wilson, which doesn't run out until October 31, 1963. We offered them substantially more money than they could possibly expect to realize from the association, but they turned us down. The reason we were anxious to get out of this contract was because of our desire to get the Arnold Palmer Company rolling right away. The Arnold Palmer Company will introduce a line of clubs and related golf equipment that—well, the financial returns from this venture arc going to be fantastic."
McCormack has also made certain that Palmer receives adequate compensation—deferred, when possible—from a list of manufacturers, publishers and sponsors as long as Arnie's muscular right arm, ranging spectacularly from Lincoln-Mercury to Coca-Cola. But more than that, McCormack has found ways to make money where only space existed before.
He has, for example, formed Palmac Associates, Inc., an insurance agency designed to service the insurance needs of those companies and corporations which are formed in Palmer's name or with which Palmer becomes affiliated. "Sunstate Slacks, for example," says McCormack, "has to buy insurance from someone—why not Arnie? The Sunstate commission alone should mean $5,000 per year." There is also Palmco, an investment company set up as a receptacle for any overflow funds and, perhaps best of all, All*Star Industries Corp. "A wealthy New York golf fan, a member of the garment industry, wanted to do something for Arnie," says McCormack. "He asked where Sunstate was going to get its material. We didn't know. 'Well, let's sell them an Arnold Palmer fabric,' the man said. So he put up $250, Arnie put up $187.50 and I put up $62.50, and we incorporated. He took 50% of the initial stock, Arnie took 37½% and I got 12½%. Sometime later additional stock was sold for over $100,000, leaving the initial investors owning slightly over two-thirds of the company. Arnie, the garment manufacturer and I had an equity of $75,000—and we hadn't produced a yard of fabric. The entire deal was fantastic."
Although the fabric business did not prove to be terribly profitable, the association did. All*Star Industries Corp. turned to selling and distributing a line of golf gloves now worn by 90% of the pros on the PGA tour.
Fantastic is the word for Mark McCormack. Few people have actually seen him in the past two years, including his wife and kids back in Pepper Pike, Ohio, and there is some danger that without ever really materializing he will vanish into legend in a puff of smoke, probably formed by burning federal reserve notes.
McCormack is, ostensibly, a junior member of a very large and respected Cleveland law firm, Arter, Hadden, Wykoff & Van Duzer, but troubled souls seeking to rid themselves of creditors, wives, or neighbors who dump crab-grass clippings across the fence seldom find him in. Operating out of a suitcase and a telephone booth, subsisting on six hours of sleep a night and a diet of coffee, cantaloupe and shrimp, McCormack has traveled to the Bahamas, Jamaica, Japan, the Philippines, Australia and 33 U.S. cities, including Honolulu once and Manhattan 28 times, in a little less than a year. A trip to South Africa and Southern Rhodesia lies just ahead. The result has not only ensured the solvency of Palmer, Player, Nicklaus and United Airlines, it threatens to project McCormack himself into a tax bracket formerly occupied only by Cary Grant and U.S. Steel. At the time he took over the affairs of Palmer, McCormack was earning less than $10,000 a year, driving a 1954 Ford and living in a $130-a-month apartment. Today by virtue of the minimum 10% he extracts from every Palmer-Player-Nicklaus deal—and sometimes his interest is much higher—McCormack drives a Lincoln Continental convertible, lives in a $100,000 home, and can anticipate an increase in his net worth of approximately a quarter of a million dollars in 1962. "This is only the beginning," he says. "I keep expecting the Continental to turn back into a pumpkin," says his wife, Nancy.
McCormack was touched by the magic wand in the spring of 1960. Until then, by his own admission, he was a golf nut who happened to be trying to practice a little law on the side. He had met Palmer, briefly, while a member of the William and Mary golf team in 1951. "We had a match with Wake Forest," says McCormack, "but fortunately someone else had to play Arnie that day. At the end of five holes, our man was even par—and three down." The two didn't meet again until McCormack had finished Yale law school, spent two years teaching military law to MP officers in Augusta, Ga., and gone to work for Arter, Hadden, etc.
"I was playing a lot of golf," says McCormack, "and a friend and I formed this booking agency to help some of the pros line up exhibitions. I guess Fred Corcoran was looking after Snead but most of the others were on their own. It worked out pretty well and after a while some of the players began to come around and ask for advice. 'Look, Mark, you're a lawyer,' they would say, 'how about helping us with some of these endorsement contracts?' There wasn't much to it; I was amazed that no one had been performing this service before. Anyway, one of the golfers was Palmer. One day, early in 1960, before he won any of his big tournaments that year, he asked me if I would be interested in representing him on an overall basis. So I went to the law firm and asked them if that would be all right. They were hesitant, but eventually they said O.K. It meant quite a bit in legal fees to them, of course. And that's the way it began."
Once the possibilities began to open up, McCormack was off, and all that first Palmer, then Player and finally Nicklaus have had to do is keep swinging—and watch the money pour in. Originally McCormack's agreement was to handle Palmer exclusively, but he is a man with an acquisitive instinct—it makes him nervous to see money just lying around when clients could be earning it. Spotting the potential in Player long before anyone else, he couldn't resist. McCormack received permission from Palmer to add another to the stable, and in the fall of 1960 he moved in. At the time the little South African was virtually unknown in America despite his second-place finish at the U.S. Open in Tulsa in 1958 (he had won the 1959 British Open but the British Open is important to Americans only when an American wins). Soon after signing with McCormack, Gary Player won the 1961 Masters; in '62 he won the PGA and tied for the Masters.
As for Nicklaus, he belonged to McCormack even before turning pro.
"This is very important," says McCormack. "Jack was the first golfer to have an agent before becoming a professional, so he was able to start out right. I want to make one thing very clear. Everything I have I owe to Arnold Palmer. He's the greatest golfer in the world and I could never have accomplished these things with anyone else. He is also my best friend. But Arnie is 33, while Gary is only 27 and Jack—well, you have to remember that Jack Nicklaus is only 22. With the way golf is booming now, what he might accomplish before he is through is unbelievable. Fantastic."
Nicklaus had won the National Collegiate championship, the National Amateur twice and finished second and fourth in the Open as an amateur. But no one was willing to bet that he would step right in and start taking the pros apart. Except, perhaps, McCormack. What Nicklaus has done, of course, is to win the Open (in a playoff with Palmer), win the $50,000 first prize in the World Series of Golf (beating the only other two competitors, Arnold Palmer and Gary Player, by four strokes), and earn over $100,000 in prize money his first year on the tour.
As a result, Player and Nicklaus are incorporated like a German munitions firm, too: International Golf Exhibitions, Ohio Golf Exhibitions, Sports Syndicate, Inc., Plamac Associates, Inc., etc. Gary also drives a Lincoln, drinks Coca-Cola, wears Pleetway clothing and Footjoy shoes, plays First Flight clubs (America) and Slazenger clubs (elsewhere), swings with Golfpride Grips, flies Sabena Airways, publishes through Prentice-Hall and eats raisins (at $400 a month) furnished by the California Raisin Advisory Board. "The blokes out there heard that I liked raisins," Gary says, "and now they send them by the ton. If I keep this up I'm going to turn into a bloody raisin."
Nicklaus, in less than a year under McCormack's tender care, contributes his name and fame and swing—and his back and lungs and feet and even his armpits—to Liggett & Myers, Revere Sportswear, MacGregor, Slazenger, Mennen, Simon & Schuster, Buick, General Time watches, Glaser Brothers slacks, United Sheeplined Clothing and much, much more. The contract with MacGregor, a division of Brunswick Corporation, was signed before Jack turned pro, a privilege for which Brunswick is rumored to have gambled a quarter of a million dollars. McCormack will neither confirm nor deny the figure, only terming the contract itself revolutionary. Also fantastic.
In all negotiations, the controlling figure is McCormack: politely firm, thoroughly demanding. From such meetings, the party of the second part frequently emerges feeling like a man who has had his pockets picked just before being hit between the eyes with a two-iron. At first Palmer tried to sit in. "Some of those early sessions were gassers," says McCormack. ' Arnie would get very upset. He didn't understand all the legal gibberish, he didn't understand why I had to be so insistent. Arnie doesn't like to see other people upset. As a matter of fact, I don't think that he completely understands the system yet. But now he leaves everything to me. I still take each deal to Arnie or Gary or Jack for approval, but none of them sits in on negotiations anymore."
Like most men who have converted a brilliant idea and uncommon energy into sudden success, McCormack often wishes that he could let go of the tiger's tail. "I'm making more money than I ever believed possible," he says, "but I don't have time to enjoy it. The house is wonderful—except that I'm never there. I built it right across from the country club, and I haven't played a round of golf there this year." He once saw three or four movies a week; now he considers himself fortunate to see three or four a year. His record collection gathers dust.
"It's not really so bad," says Nancy McCormack, "except that we don't see him much anymore. And even when he's home, he's restless. He took Father's Day off to spend with the boys. He went out in the backyard and pushed Breck and Todd in the swing for half an hour. Then he came into the house and looked at me. 'What do I do now?' he said. I sent him off to the office.
"The important thing is that he is making a success out of something that means a great deal to him. These first two years have been kind of wild, I'll admit, but I believe that everything will begin to settle down now."
"I'm not so sure," says McCormack. "I have some ideas that—well, we'll see. Anyway, I'm having a great time. I've always loved to travel, and here I am traveling all over the world. I mix socially with people I once only read about, celebrities from show business and government and finance and sport. And who do I play golf with? The three best golfers in the world, Arnold Palmer, Gary Player and Jack Nicklaus. When you stop to think about it, this whole thing is fantastic."
When you stop and think about it, it really is.