AUGUSTA THE COURSE CEOs LOVE BEST How America's most prestigious golf club mounts the sport's most beautiful tournament -- the Masters -- isn't always pretty.
By Alan Farnham

(FORTUNE Magazine) – GOLFERS, START hating me now: I visited the Augusta National Golf Club earlier this spring, and though I had the opportunity to play, didn't. (In golf, this is tantamount to visiting Lourdes and not trying the water.) I'm sorry. I don't play. I went hoping to discover what style of management accounts for the spectacular success of the club's one commercial product: the Masters Tournament. Every year, in the first full week of April, the Masters unfolds like a perfect blossom before some 27 million television viewers worldwide. It is the highest-rated tournament in golf, and CBS, which has carried it since 1956 on a year-to-year contract, kisses the ground every time Augusta National renews. I found the answer. It isn't simple. It involves fear, reverence, and a blunt insistence on perfection, all of which radiate from every square yard of Augusta National. For you can't explain the near miracle of the Masters without understanding the club, what it's like, and why membership is the secret lust of virtually every male golfer who dares to entertain such fantasies. Make no mistake: The club dominates the tournament, not vice versa. Starting every spring, a drumbeat of articles in magazines such as Golf Digest heralds the Masters' coming. Pictures show Augusta's greenskeepers bending low, apparently inspecting blades of grass one by one, making sure the course is set for play. Access to these impeccably manicured links is by invitation only, since the National (as it's known familiarly) is a private club, founded by legendary golfer Bobby Jones and a small handful of friends in 1931. That tie to Jones, the club's exclusivity, and the accumulated lore of many Masters Tournaments -- not to mention the grandeur of Georgia in spring -- conspire to make this course the one every tradition-loving golfer yearns to play. Says author and golf mystic Michael Murphy: ''It is the Vatican -- the Mecca.'' How badly do they want it? I asked golfer Gordon Weber, 47, president and CEO of Associated Bank in Wisconsin, if he would cut off his nose and eat it to play Augusta. ''No . . . no . . . I don't think I would do that. But here is what I would do. I've got six kids, so I know something about the demands of babysitting. I would babysit up to 18 kids, one for each hole, age 3 or under, for four hours. Please don't tell my wife that.'' Could anything be this good? If you played Augusta sometime other than Masters week, wouldn't you, maybe, be disappointed? No. Michael Franz, CEO of fax machine maker Muratec, played Augusta last year as a guest. His account: ''I tell you . . . when you enter those gates, when you go down Azalea Drive, it's just incredible -- a very awesome atmosphere. I've never played any course where I was so aware of how many holes I still had left to play. You don't want it to end. If I could play only one course the rest of my life, it would be Augusta.'' He stayed overnight in the clubhouse. How was the food? ''Great.'' The wine? ''I was amazed at their cellar -- how extensive it was.'' Caddies? ''Great. Very impressed.'' Junk food? ''They've got it, in a cart near the ninth green.'' Would he accept membership if it were offered? ''In a minute.'' Ask the club who its members are and how they're admitted, though, and you confront a riddle wrapped in a mystery inside a bag towel. While Augusta National graciously explains how it runs its tournament, questions about social matters are met with silence. And for good reason: Augusta National might as well be dubbed the CEO Club. Its members aren't just CEOs and chairmen past and present. They are names, including John Akers (ex-IBM), Robert Allen (AT&T), Harold Poling (ex-Ford Motor), Stephen Bechtel (Bechtel), Edward Brennan (Sears), Warren Buffett (Berkshire Hathaway), Charles Knight (Emerson Electric), Hugh McColl Jr. (NationsBank), Thomas Murphy (Capital Cities/ABC), John Reed (Citicorp), Jack Welch (General Electric), and Thomas Wyman (S.G. Warburg, ex-CBS, ex- Pillsbury) -- to pick 12. For its size (300 members) the National probably has more CEOs than any other club in the U.S. Just 8% of the members live in Augusta, a city of about 45,000 people 140 miles east of Atlanta on the South Carolina border. Most reside in California, Connecticut, Florida, New York City, and Texas. A typical member uses the club only four or five times a year, making Augusta one of the most underplayed of the world's great courses. Club policy (say the rules) is to seek ''individuals representing new geographical areas'' as members. If that's true, then candidates from Montana, the Dakotas, Oregon, Iowa, Wisconsin, several other states, and the continent of Asia may have a leg up, since they are not represented. There is one black member (Ronald Townsend, president of Gannett Television). Women? None. The club's penchant for secrecy, plus the makeup of its membership, makes the National's hosting a televised event seem, well, incongruous. It's as if California's Bohemian Club, during its annual encampment, invited CBS to film a log-rolling championship. Yet come Masters week, you won't see a single protester chaining himself to the front gate -- testament to the club's adeptness at controlling its image. Contractually, the National exercises control over the CBS broadcast. As sports writer Frank Deford has said, you would never guess from watching CBS's coverage that the Garden of Eden did not lie right outside the gates. In fact, right outside the gates is a strip of fast-food joints and a shopping center with a defunct Piggly Wiggly supermarket. Former CBS commentator Jack Whitaker once described a group of Masters spectators as ''a mob.'' For this infelicity he was removed from future telecasts of the tournament. One could gather many wrong ideas from watching the Masters on TV. The course is not specially tarted up for Masters week, at least not in any significant way. The tarting goes on year-round. Says club horticulturist Tommy Crenshaw: ''It's a misconception that we have different criteria for the Masters. We prepare the course that way for our members all year -- a level of quality that never varies. If a member brings a guest to play, it may be that person's only chance to play here. The course has to be perfect.'' A Manhattan investment banker visited the National one fall, during a storm. On his way to dinner, his host pointed to a tree that the wind had just brought down. ''See that?'' he asked. ''By the time we finish our cobbler, that will be gone.'' It was. The entire scene had been put in order as if no violence had occurred. NOTHING at Augusta ever attains peak perfection, since ''peak'' assumes the presence of intervening declivities. No, here it's just the same old perfection -- uniform, unremitting, day in and day out. The place is lovely but lacks a certain spark -- like a beautiful woman who's dozed off. Anything that might detract from the full enjoyment of golf is forbidden. Excessive drinking and boisterous behavior are discouraged. You come here to play 18 holes in the morning, 18 holes in the afternoon. Guests need not pack bathing pants, since there is no pool. No tennis court either. This same singleness of focus informs the tournament. Nothing is allowed to divert attention from the game. All commercial signage -- even that on Coke machines -- is taped over. No one on CBS may speak of prize money until after the tournament. Corporate hospitality tents? None. Not even Cadillac and Travelers, the broadcast's exclusive sponsors since 1969 and 1959, respectively, get them. These quirks give the Masters its appealingly noncommercial look. Mounting the tournament requires the recruitment, motivation, and coordination of close to 2,000 workers, only 600 of them paid. You might think that to run an event this size the club would need a stand-alone corporation with a separate staff. You'd be wrong. The club and the tournament, legally, are one. The same small group of six top managers and 12 supervisors, headed by James Armstrong, works on both and reports directly to the club chairman, Jackson Stephens, billionaire chairman of Stephens Inc., the Little Rock-based investment bank. No one outside the club knows how much profit the tournament throws off, but it's enough to buy Augusta National all the peach cobblers its members could ever want. And that's not because Augusta gouges anybody, be they Cadillac, the food concessionaire, or ticket buyers. Tickets to the Masters are the hardest to get of any in sports, and the waiting list for them has been closed since 1978. But if you got on the list before then and your name comes up, you pay only $100 to see four full days of play. A hamburger and a Coke may have cost $6.50 at Lillehammer, but you can get a chicken sandwich and a beer at the Masters for $4. A back-of-an-envelope calculation looks like this: By FORTUNE's estimate, revenue approaching $10 million comes from television rights, ticket sales, merchandise sold from a new, 5,000-square-foot retail shop (open only during Masters week), and a cut of what the food and drink concessions make. On the cost side, there's prize money of about $1.7 million. After that, stakes and rope. Labor costs specific to the tournament are not significant, since the Masters uses so many volunteers. So despite the club's sincere lack of interest in making money, darned if it doesn't happen anyway. The club probably could charge its members no fees, if it wanted, paying all its expenses out of Masters profit. Expenses are lower than you might think, since the club is open only from late October to early May. As it is, fees are low by country club standards. Initiation costs $25,000; dues are $3,000 a year. All tournament work is organized by 24 committees, each responsible for such things as litter control, media relations, scoring, and transportation. Chaired by club members but composed of both members and outsiders, these committees offer a devious person a path to membership. Let's say you're an expert on ball lightning. By all means drop the safety committee a note telling them that, at last year's Masters, you thought you saw a fiery ball hovering over the eighth green. Ask whether they have a lightning expert advising them. They don't? You may be invited to advise the safety committee, and from associations made there, you might in time be deemed to have member potential. It has happened. THE COMMITTEES are emphatically open to suggestion. They sincerely want to mount the best golf tournament in the world, and they'll entertain any idea to make the Masters better. The Masters was the first tournament to use under- and-over scoring -- the now universal system of reporting each competitor's deviation from par rather than his stroke total. It was, last year, the first in the U.S. to experiment with HDTV coverage. But most improvements are so small they go unnoticed. This year, for example, patrons will find that some of last year's belly-up food counters have been replaced by faster, more efficient cafeteria-style walk-throughs. Says a new member who serves on the improvements committee: ''I was surprised to find such openness and objectivity. This whole notion of continuous improvement that we, in business, only talk about is the ethos of the Masters.'' That and fear. Fear? Among all those azaleas? The National rules as did kings of old, by a deft manipulation of two powerful emotions in its subjects: awe and fear. What it doesn't get with one, it gets with the other. First, awe: Golfers feel plenty of this where the Masters is concerned, and Augusta National is happy to let them express it by volunteering to hold ropes, rake bunkers, mow grass, and post scores. Tom Sawyer had nothing on the Masters. As the one-inch-thick Masters Tournament Operational Manual explains, ''emphasis is placed on the voluntary aspects of the job.'' Yet there's a waiting list. The same volunteers come back year after year, many from out of state, counting themselves lucky to have helped the Masters and kissed, figuratively, the hem of Bobby Jones's plus fours. After doing this three consecutive years, they get to play the course -- once -- during a special outing, and once each following year they volunteer.

Which brings us now to fear, a weapon wielded with great skill by the National's co-founder and first chairman, Clifford Roberts. By all accounts Roberts was a formidable man. Every year, after the Masters broadcast, he would excoriate CBS for things it had done wrong, and CBS (having first prepared for Roberts a plate of Oreo cookies with the filling scraped off, per his request) would tug its forelock and say, ''Yes, sir.'' This tradition is one the National's current chairman, Jackson Stephens, has not perpetuated. A committee of members and staff now reviews the telecast and sends a list of compliments and gripes to Jim Armstrong, who conveys them to CBS. Roberts was a believer in never letting anybody get too comfortable, and members felt that they were always on secret double probation. He bounced them for lapses of decorum and violations of rules. You knew you were out when your bill stopped coming. Stephens, all agree, is a breath of fresh air -- more genial and less authoritarian than Roberts. But plenty of cringing still goes on. The company that makes the famous green jacket (Globe Corp. in Cincinnati) would just as soon not talk about it: ''We could lose that contract very, very easily.'' Asked the smallest detail about fees, expulsions, or other matters social, members who could buy Georgia and its four contiguous states choose to demur: ''Sorry, it might get back to the club.'' An Augusta newsman says simply, ''You never know where the black fist is going to land.'' Locally the club is a 300-pound gorilla. Last year's Masters brought something like $104 million into the area. No lawsuits have been recorded against the club for the past three years in the county courthouse. Sitting with Jack Stephens in his chairman's office, just off the well- manicured driving range, I ask if he doesn't think a lot of business people probably watch the Masters and wish their own operations ran as well. ''I know I wish mine did,'' he says, and smiles dreamily. AUGUSTA NATIONAL, you see, holds a trump card in its dealings with the world: indifference. The club can discontinue its single product anytime. Stephens makes plain that this is not an idle threat. If the Masters ever became a bother -- if outsiders, say, started telling the National what to do -- the members would just stop putting it on. Oh, they'd miss it. But their ideal of golf could still be pursued in the National's own private green sanctum. Lost revenue? An organization with Roger Milliken and Warren Buffett as members would find a way, somehow, to get by. And so, for however long it serves the National's pleasure, the Masters will endure, giving the public a fleeting glimpse of that rarest of rare things: perfection.