Ian Mallon: Why K Club will pay up to €20m to host the Irish Open
![Ian Mallon: Why K Club will pay up to €20m to host the Irish Open Ian Mallon: Why K Club will pay up to €20m to host the Irish Open](/cms_media/module_img/7486/3743212_4_articlesmall_DSC_1684.jpg)
SPECIAL K: Padraig Harrington plays his approach shot to the 18th hole during the Wednesday Pro-Am of the Horizon Irish Open at The K Club. Picture: Cian O'Regan.
THIS week, the K Club hosts the first of three Horizon Irish Open golf championships over the next five years — a tournament every other year up to the 2027 Ryder Cup.
The Irish Open is now the joint fifth most valuable event on the DP World Tour schedule – outside of non-Rolex Series, Major Championship or WGC events – with a $6m prize purse.
It is one of the three best-attended tournaments on the schedule, alongside the PGA Tour Championship at Wentworth and the Scottish Open.
Last year at Mount Juliet unofficial figures recorded up to 80,000 fans attending throughout the week, with more than 62,000 expected in Straffan.
This live audience, along with a highly valuable North American, UK and Middle Eastern viewership - watching through 44 broadcast partners - will bring extraordinary attention and value to the K Club, DP World Tour and Tourism Ireland.
WITH a prize purse of $6m, the Horizon Irish Open ranks as one of the richest competitions outside of the PGA Tour roster in North America.
Excluding the richest prizes in golf - the FedEx Cup ($75m) and its $20m BMW Championship and St Jude Classic – as well as the Majors, with an average prize purse of $17m – then you can start comparing the Irish Open globally.
It sits just behind key events on the PGA Tour roster including the Wyndham Championship ($7.6m) and John Deere Classic ($7.4m).
Scottish Open $9m
Abu Dhabi HSBC Championship (UAE) $9m
Hero Dubai Desert Classic (UAE) $9m
BMW PGA Championship $9m
Irish Open $6m
The DP World Tour told The Pitch: “At US$6million, it is the joint-highest prize fund for a non-Rolex Series, Major Championship or WGC event on our schedule.”
IF YOU look at the Irish Open as a singular live event only, removing overall fees earned through commercial and broadcast revenues for the Tour annually, it’s worth approximately €17m to the Tour.
Sponsorship and broadcast rights deals more than cover DP World Tour’s overall $144m prize fund for this year’s 39 tournaments, so just using live revenue estimates, the numbers are extraordinary.
Exclusive to the Irish Open is the deal with Horizon for six years, a partnership which was announced last year at the K Club which, the Tour confirmed to The Pitch, was facilitated by its partnership alliance with the PGA Tour in America.
We estimate this to be worth up to €7m per year, for a six-year deal.
The next significant income comes from general admission ticket sales at an average of €60 per ticket, working out at €3.6m for the week, based on forecasted sales of 60,000.
Let’s work on the basis that one in six of these visitors will avail of corporate or premium hospitality while at the Irish Open, bringing in somewhere between €2m to €3m for VIP packages - let’s call it €2m conservatively.
For those not getting the silver service there are plenty of on-course options for food and beverage, where fans will spend up to €30 on average, working out at €1.8m.
This works out at €14.4m before merchandise is included.
There are far more items in the Merchandise Tent costing more than €20, than less – so let’s settle on average investment of €30 per person.
Based on observations by The Pitch at last year’s event, Polo shirts and club head covers are the most lucrative and popular investments, while those on a low budget can purchase beer mats or glasses for single figures.
Selected Picks: Notepad €12, Beer Glass - €8, Golf Towel - €40, Beer Mats - €8, Driver Head Cover - €45, Hip Flask - €35, Mallet Putter Cover - €40, Travel Mug - €30, Water Bottle - €20.
For our model, we’d expect every golf fan who visits the store to spend an average of €50, but we don’t know how many will visit in total – so let's assume the majority of fans will visit, working out at three out of every five fans in attendance, working out at €1.8m.
This totals out at approximately €16m, in conservative estimates over the week in direct exchanges.
A number of sources within the Irish Open have revealed that the K Club will likely pay approximately €18-20m to host the tournament over its next three cycles.
Initial costs for this week sit at around €6m in pure cash exchanges back to the DP World Tour, with that money covering everything from the incidental marketing of the resort and the more direct investments, including operations and tournament running costs.
As well as paying a hefty investment to the DP World Tour, the resort also gives itself completely to the organisation for the week of competition, and does no business of its own throughout the seven days.
All rooms, facilities and amenities – including food and beverage (although arrangements can change, venue-to-venue) – are handed over to the Tour, its executives, players, families and sponsors, from Monday to Monday of ‘Open week.
This amounts to a significant chunk of cash for a resort which can expect to earn revenues of approximately €25m next year.
Almost every cent paid for tickets and on-course purchases go back to the DP World Tour and that’s the deal which Michael Fetherston believes will push The K Club back towards 2006 Ryder Cup levels.
HAVE you ever wondered what goes on behind the doors and sacrosanct walls of the various equipment trucks which accompany every Tour event?
The Pitch was invited into the Titleist workspace where Karl Arthur, Leadership Promotion Manager, caters for every whim and need of the brand’s 100 players who use their balls, and 35 golfers who use Titleist clubs at this tournament.
Each Titleist player will get three dozen balls for the week and four gloves, as well as shoes and other accessories - but the real work is done in the workshop at the back of the truck.
It’s here where drivers and irons are supplied where needed, but where one club receives the most attention at each tournament.
“Almost all of the work is done around the wedges where needs vary from course to course, depending on how lush the grass is and how firm the greens are,” explains Karl Arthur.
“The fairways here are good so driver-wise and iron-wise there won’t be too many changes – apart from the odd adjustment in driver loft.”
Will Harvey of Vokey Wedge, Titleist’s chipping expert, says that the issue is always around wedge loft.
“This course is obviously going to be much different to say a links course, and therefore different lofts and adjustments are required to go with that,” he explains.
“You do get issues with grooves, not here, but more so in Dubai or other Middle East venues where there is a high sand density which plays havoc.”
Titleist and the other equipment suppliers are on site at any tournament until the Friday of competition, and from the K Club the truck will make its way back to Cambridgeshire, and on to Wentworth for the BMW PGA Championship.
And once the truck is gone, it’s gone - so the key thing to remember, according to Karl Arthur: “Don’t break your club, or at least if you do, do it early in the week.”
THERE are two reasons September is better for an Irish Open golf championship according to the DP World Tour: Growth conditions and marketability.
Paul Gillmon of the DP World Tour told The Pitch that holding of the event in September is “a huge positive from a pure golf course perspective”.
Then there is the key benefit, marketability, particularly coming as the season climaxes right between the end of the FedEx Cup in Eastern Hills and the Ryder Cup, in Rome.
“From a strategic alliance with the PGA Tour, it’s also a huge positive, with the FedEx Cup now finishing, enabling an enhanced field so it kind of works for all of those reasons,” explained Paul Gillmon.
“This year’s field for example, with Rory and the other Irish players, as well as quite a few from the PGA Tour contingent is really positive uptick from the player side and with the Ryder Cup peaking interest also.”