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I Am American Business

Arnold Palmer

Producer Notes

Arnold Palmer grew up in Latrobe, PA, the son of the greens keeper at the Latrobe Country Club. As a kid, he was not allowed to play on the golf course when it was open to members. Now he owns the club. His brother, Jerry Palmer, is the General Manager. Golf is the family business. Arnold Palmer's complete life's history seems to be stored at the club. In a nearby building are shelves of golf memorabilia, racks of clubs, rows of golf shoes, hundreds of presents, plaques, Arnold Palmer products and even the actual tractor he rode in his Pennzoil commercials. In one area of his office is an entire photo gallery - Arnold Palmer with various Presidents of the United States, from President Eisenhower to President Bush. There's also a photo of him with Queen Elizabeth. Arnold Palmer is golf royalty. But when he found out we'd arranged for lunch to be served to the production crew at the club he decided to sit down with us. What was the beverage served with the meal? Arnold Palmer Ice Tea, of course.

Video Interview

The "I Am" Q&A

What car do you drive?
Cadillac.

What is your favorite place to go?
The golf course.

What's your favorite drink?
Palmer ice tea.

What's your favorite food?
A nice juicy hamburger.

What is most fun for you?
Other than my family, my golf.

What is the most fun for you at work?
Making birdies.

What movie star do you like?
John Wayne, Humphrey Bogart, Spencer Tracy. I still watch those movies. I enjoy them.

Who is a business hero of yours?
Dwight D. Eisenhower. He was a good friend and I treasure that friendship. He was one of the greatest characters and one of the greatest people that I have ever known.

What personal qualities do you admire in business?
Integrity.

What was your greatest moment in business?
Winning the Masters, wining the Open, winning the British Open. I could go on, but I won't.

What is your dream?
To see my family have the same good fortunes that I have had in my life.

Do you have a motto?
I think if I had one it's to have a high standard of integrity.

What is your present state of mind?
I suppose it would be to enjoy life.

Transcript

CNBC:
Can you talk a little bit about the international growth of golf?

ARNOLD PALMER:
Well golf today is more international than domestic. Even though the major tour in the world is still the US tour, international aspects of golf are growing far more rapid than the US or the domestic golf scene. The number of golf courses being built is far more international than in the United States and this will continue for some time. I think that it will be some time before we start to see the sport of golf make the same impact that it has in the years gone by in the United States. At one point in recent years, people could actually say that we have overbuilt our golf courses, having said that we still are building golf courses in America. We will continue to, just not at the rate that we did, nowhere a few years ago. It's almost a little hard to believe the impact golf is having on other countries of the world, like China, I built the first modern golf course in China, about 25 years ago. Since then, China has really picked up on golf, and they are building golf courses throughout the country. This will continue the tremendous growth of the golf world, because we will see a lot more Chinese golfers playing in America, and playing on our tour. Also, people will see these golfers playing in the European tour, and around the world. Russia is also building golf courses in Moscow and the countries that were a part of the Soviet Union are building golf courses also. The game is becoming quite popular. The game itself isn't much different in those countries as it was in America a number of years ago. More of the elite are playing golf, but as time goes on golf will become a part of the atmosphere of most countries in the world. The European tour is now very sanctioned and a pretty well operated tour. If you look at the Golf channel you can see the European tour almost every week, at least three, four, maybe five days a week, depending on the situation. What is this going to bring? It's bringing more golf courses to Europe, South Africa, Australia, and Asia, which would include China, the Philippines, and Japan. Over the years, I have built 19 golf courses in Japan alone.

CNBC:
How important is the image of the game of golf?

ARNOLD PALMER:
Well, of course the game of golf has a wonderful reputation as policing itself, and the players in the game have done that. It's probably the only sport in the world where the player calls penalties on him/herself. The integrity of that continues to grow. I think it's very important that the R&A (which is the ruling body of most of the golf in the world) along with the United States Golf Association, work together in keeping the world of golf informed as to what is appropriate in the game, such as how to play the game and keeping golf on a gentlemen's level. In regards to new golfers entering the game; whether it is in Europe, Asia, or Africa, we must be able to let them know appropriately what the game is all about and how to conduct themselves on the golf course. This will continue, as it always has been to be a major task, just letting people know how to appropriately play the game and act on the golf course.

CNBC:
Is it important for all the businesses, the merchandising, and products to protect the integrity of the game?

ARNOLD PALMER:
I do, without question, think it's important that we protect the integrity of the game through the business world. It is important that the prevailing sponsors in the tournament games translate the commercialism of the game in the proper way. This is very important in continuing and keeping the high level of the integrity within the game of golf alive.

CNBC:
Can you tell the story of your arrangement when you started out with Mark McCormack?

ARNOLD PALMER:
Actually, Mark and I met when we were playing collegiate golf. And I won't say that we were very close friends. We got to know each other and he went on to become an attorney. When he started practicing law in Cleveland, Ohio he came to me and talked about representing me on the tour, which I was reluctant to do. He wanted to exclusively be the only person that represented me and at the time I was pretty happy with my arrangement with my wife, Winnie, who was helping me at home. Mark and I kept talking and he had represented some other players and of course long story, short I said, “Well when you decide that you just want to represent me alone, I'll talk to you about it.” Well that didn't take long. He came to me a month or so later, and said that he would represent me and that I would be his only client, and that was the idea. Well him being a lawyer, he had a whole set of regulations and an agreement that he had drawn up to sign, in order to make this all a contractual situation. I then looked at him and said, “Well I'm not going to sign anything. I'll give you my word and you give me your word we'll shake hands and we have a deal.” That deal lasted 50 years.

CNBC:
A lot of people credit you with starting sports marketing which has become a billion dollar worldwide business.

ARNOLD PALMER:
Well it would be improper for me to take credit for all the sports marketing in the world. The fact is that Mark McCormack was key to that and of course Mark was a very brilliant person. In some areas, he lacked maybe some common sense as far as how to make certain deals work, and I did offer that bit. I wasn't too smart, but I could relate to the common sense that's involved in selling a marketing situation, particularly in golf.

CNBC:
When you started out, people didn't really think of athletes as brands and now the Arnold Palmer brand is hugely recognized, can you talk a little bit about athletes as brands?

ARNOLD PALMER:
At one point in my career in the early to middle 1960s, I had a couple of gentlemen that worked for Mark and myself in our enterprise. One day we were having a meeting in which we were talking about marketing, branding, that type of stuff. I said to a man by the name of Jules Rosenthal who was a very close friend of mine and who had worked for me for a number of years, “What are you going to do when I can't play golf the way I play today?” To which he replied, “You won't have to worry about it.” I then said, “Could you elaborate?” he then said, “I will have you branded and your brand will carry on longer than you will live.” Of course I questioned that. But as it turns out, branding has become one of the most important things in my businesses and I think that it will become a prevailing part of the game of golf or for any sport. The people who are in the business of marketing will quickly pick up on branding and we have carried the Arnold Palmer brand throughout the world.

CNBC:
What does the Arnold Palmer brand represent?

ARNOLD PALMER:
The brand is not particularly tied to the game of golf. It has spread beyond the image that might be presented by just playing golf, hitting golf balls, and winning tournaments. Once it's branded and has become a brand, then people recognize it. People will buy the products because of the brand name. Whether it's a Wheaties, or a Coca-Cola, or something along those lines. People look at the name and purchase the product because of what it represents. This is the type of branding that has become quite big. An example of this would be a company in Japan by the name of Renown is representing Arnold Palmer. They've represented me for over 40 years and now they are branding the name and selling through that branding.

CNBC:
Can you talk about what your image was as a player?

ARNOLD PALMER:
Well there is no question about one thing, I have worked and tried very hard all my life to keep a very high standard. The reason for that is, my father. He taught me the respect in which I have for people. Secondly are the ruling body, the United States Golf Association, and what they have meant to the integrity of the game in addition to the popularity of the game. My father set down the principles for me whether he knew he was doing it or not .He was a man of integrity, when he talked I listened, and of course that's the way I have tried to conduct my life.

CNBC:
What can you learn from golf that helps in business?

ARNOLD PALMER:
Well, from the day that I started playing serious golf on tour, and from the day I started entertaining on the golf course with business groups; there was one thing that I always have contended, and that is you can almost without fail tell the character of a person after 18 holes of golf. If you have any question about a person's character after 18 holes then play 36. Actually you will know a person very well from, every angle in regards to their personality point of view, their conduct point of view, where he or she is going, and what he or she is going to do. For the most part, you can read a lot from a round of golf with a business associate.

CNBC:
Do you think people have gotten more casual about the rules?

ARNOLD PALMER:
I don't think that the people on the rules committees throughout the world that are administering and keeping the rules in tact are serious about how they conduct themselves and how they administer the rules of the game. I would like to think that when people start to play the game that they learn the etiquette of the game, that they will play by the rules and will know how to do that. The more serious people get about the game of golf then the more they will play by the rules.

CNBC:
You've talked a lot about winning and how about you always felt you could win. Could you just talk a little bit about the philosophy of winning and how you felt about it?

ARNOLD PALMER:
Winning certainly is an important part of the game. Without winning I wouldn't be where I am today. At one point in my life, I became afraid that I was going to lose, and that promoted me to work harder to win and it stuck with me, it's still with me even though my game isn't.

CNBC:
Can we talk a little bit about how you got into trouble on the golf course, and what your attitude was about living with trouble?

ARNOLD PALMER:
Ok, I guess I found a lot of trouble particularly in my early days of playing the tour. In particularly with golf and my father reminded me, that it's only a game, and to play it like a game. I hit the ball hard, which is the way I enjoyed hitting it. From time to time that got me into trouble. One of the great thrills in my life was getting out of that trouble. I suppose that's another reason why people enjoyed watching the shots that I was hitting. Spectators felt that if they came out to see me, they were going see me in the woods and making shots out there. People really enjoyed seeing that and I also enjoyed doing it. I didn't enjoy getting into trouble particularly when I was playing for a living. It was very important that I would stay out of trouble, but it was inevitable that I was going to get into trouble and of course the good news is that a lot of the time I got out of it, which I enjoyed.

CNBC:
Did you enjoy getting in and out of trouble?

ARNOLD PALMER:
I can't say that getting in trouble was fun, but it was part of the game. I enjoyed getting out of trouble and it became part of me as well as part of playing the game. My father said to me many times, “Hit it, go find it and hit it again.” and I remember that. That's pretty much the way I played the game. I suppose that as the years went by, I got more sophisticated and got into less trouble. Once while playing in a tournament, which was one of my early wins in Canada, I hit a ball into the woods. At the time I had a sizeable lead in the tournament when one of my playing partners walked by me and said, “Just lay it out of there.” I didn't and I hit it out of the woods on the green. The other player got a little upset with me for doing that, but he was a friend and he meant only good things.

CNBC:
What is happening with your many businesses?

ARNOLD PALMER:
Similar to golf when you're winning it's nice to keep on winning and in regards to business when you have products that are selling, it's nice to continue that success. I have enjoyed the challenges of business. Sometimes you get very surprised by what is successful and what is not. Another product that that I got involved in, only because it was something that I personally enjoyed, was ice tea. I got a little bit tired of the same ice tea everyday, so I invented an ice tea that was enjoyable. I made mine a little different in which I squeezed a lemon and put it in my tea. I probably used three quarters tea and one quarter lemon or lemon juice. One day I was in a restaurant in Palm Springs, California and I ordered my iced tea with lemon, and a lady in the restaurant heard me do that, so she says to the waitress, “Give me one of those Palmers.” Today that is one of our best products. People around the world are enjoying a Palmer and of course we are extremely pleased and proud of that product. It's an Arnold Palmer made by Arizona. The popularity is growing more and more. Byproducts are also now coming out from the Palmer ice tea.

CNBC:
Let's talk about your golf course design business. What are you working on?

ARNOLD PALMER:
We are very definitely in the golf course design business. I have limited how much we do because I want to participate as much as possible. And of course we have representatives in Russia, Africa, Brazil and China, throughout the world representing us in designing these golf courses. My headquarters in which my architects reside is in Bay Hill Orlando, Florida. We are busy and getting busier. The golf course architecture field is limited in America today because of the economics of doing golf courses. At one point we may have overbuilt golf courses in the United States. We are seeing some astonishing things happen in Moscow, Russia, China, Japan, and the Philippines. As well as other places that one would think golf wouldn't be as big such as South America, Central America, and Dominican Republic. Places like that. The Bahamas are becoming golf meccas because the seasons are very good for golf all year round. We're seeing a lot more of that happening today, but you can rely on the fact that South Africa, South America, Argentina, and countries spread throughout the world are discovering golf. Originally one of the things that took golf around the world was the British Empire. I don't know how many people talk about how golf got popular around the world, but the fact is that when the British had colonies throughout the world (South Africa, Asia, you name it) they sent their diplomatic cores and business people to these various colonies throughout the world. One of their very popular hobbies was golf. If you've studied the British Empire and you know where they were, you will see that they had golf courses in every one of those colonies around the world.

CNBC:
One of the other things that you're credited with is changing the face of golf from being a high-class sport into a more popular sport in which anyone could participate. Can you talk a little bit about that shift from a personal point of view?

ARNOLD PALMER:
My father was a golf course greens keeper. Now we rarely hear the name greens keeper anymore in golfing circles because it's now the superintendent. Well the name indicates the same thing; a greens keeper is a superintendent. Likewise a superintendent is a greens keeper. In the days of my beginning, we were a very economically strapped family. During the days of the Depression, I played golf because I loved it and I didn't think about the economics of what it might cost to play the game. A lot of my friends were in the same boat. My father and family were in the same situation so I didn't think about the fact that golf was a very affluent high-class game. That didn't mean anything to me, the fact that I enjoyed it and it was a challenge was far more important. So I played with that thought in mind.

CNBC:
Do you think that the fact that you helped make the game more popular contributed to the success of marketing in golf?

ARNOLD PALMER:
The people that were playing the game whether it be a guy that worked in the steel mill or coal mine, his desires and his interests were the same as the very affluent. I had a friend when I was a young man who was a football player and we were in school together. He played football and I played golf, we became very close friends. So I played some football with him and he played some golf with me. His father who was a steel worker, a hammer boss if you wish. One day I saw him and he said, “What are you doing? What's this game you're playing, golf?” I told him how it was quite fun and that he would enjoy it. The mans father laughed at me, long story short, about five years after that incident where we talked about football versus golf he said to me, “You know, I'm going to try that game.” Well this man who was the father of a good football player and the hammer boss at a steel mill became one of the most avid golfers that I have ever seen. He changed his shift at the steel mill so he could get off in the early afternoon and go play golf, he absolutely loved it.

CNBC:
What do you think is the future of golf?

ARNOLD PALMER:
Well I think that uh, we will see uh a lot of things happen in golf in the future. First of all, we have tours like the Nationwide Tour, the PGA Tour, and then we have the PGA of America, which is separate from the PGA Tour. And then we have the European Tour, and then we have tours that exist in South Africa, in Australia, Japan, Asia, and for the best part these tours are all operate separately. I would see in the future, things that will happen that will create a super world tour of golf. And that will be a combination of the US PGA Tour, the European Tour and all the other tours that are around the world.

CNBC:
And do you think that offers new business opportunities, a world tour?

ARNOLD PALMER:
A super tour or world tour will offer marketing opportunities throughout the golf tour. We are seeing today somewhat of a merger of business and marketing programs throughout the world.

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