Magical Kenya Open: What goes into organising a Sh130m golf tournament

The BD Life spoke to Patrick Obath, the tournament director tasked with organising the extravaganza on what the tour means for Kenya's hospitality and tourism sector.

Let’s start with the preparations...

The preparation has been going on for the best part of five to six months. There is work going on in improving the agronomy of the course, that is nutrition of the grass; watering, cutting, rolling it as appropriate and all that goes on so that by the time you are ready for the event in the last two weeks, it has grown to the required standard.

There are a lot of other treatments to the course, for example, adding manure and sand to a particular place to change the character of the soil beneath the grass or that it grows better or the bounce of the ball changes or something like that.

In the last two weeks, the intensity of attention to the turf has increased with more rolling and watering during different times of the day to make sure the grass is in its best condition to withstand the punishment that might happen as you have these professional players playing every day for four days. Additional nutrition is also done so that the colour of the grass course becomes suitable for TV (broadcasting).

How capital-intensive is this?

The prize money is about Sh322 million. It costs roughly another Sh130 million to run the rest of the event including preparation of the course.

There are a lot of things we have to consider. As the host promoting company, when the player lands at the airport, you take over. You provide transport from the airport to the hotel, they will pay for their accommodation and food at the hotel.

But then once they want to leave the hotel for the course to practice or play, that becomes the cost of the tournament organiser including their meals at the course.

Imagine they arrive on a Monday and they play up to Sunday, so you have six days to take care of 312 players. We also have to erect barriers that control the crowds on the course and security barriers for cars. A lot of infrastructure has got to be put in place as well, adding to the cost.

We also need 30 golf carts for the organisation to be able to run around the almost 200-odd acres of this golf course. So, if somebody is a referee, a security guard, or an aid, they need to be able to get around quickly. I could go on and on but you can see how quickly Sh130 million disappears.

What is different this time?

This is the sixth staging. In the earlier editions we were still learning how to put things together. We didn’t have all these much better infrastructures, we didn’t have the stories told about the event, the public relations weren’t as good. Now it's excellent, we are getting out, people understand who we are and what we are trying to do.

Do you always have to wait for a big tournament to get everything together this way?

We had started something called the Safari Tour and a lot of successful golfing nations like Australia, India, China, Korea, South Africa, the UK and the US which are the main countries attracting huge crowds from all over the world to their golf tournaments, do have tours which run the whole year which serves the purpose of developing their own golf and people getting to learn about their golfers.

In this part of Africa, we have no tour. Since 2019 we have been developing the Safari Tour. It has been growing but unfortunately, the conversations we had with sponsors have not resulted in sponsorships, so we have to revise our strategy and approach.

And if that then grows, we will have a nice runway that takes you from one event to another. The Safari Tour intends to have it played at the coastal region, in Nairobi, Western Kenya, Uganda, Tanzania, Rwanda and all the places in the region with sufficient golf courses.

Why are Safari Tour conversations any different?

I mean the Magical Kenya Open is a big event. The value proposition is very clear, we have got all the figures and statistics. For Safari Tour we have got to grow those statistics and the narrative to have sponsors who believe in the growth, not in a mature product.

Getting sponsors who believe they can mature this product to the highest level and during that growth also get value hasn’t been easy. But it is the conversation we need to have so that they can see the value of growing the opportunity, development, and management of golfers in the country.

In other countries where this has happened, you have people who manage golfers and have stables of say six, seven golfers who they are growing and investing in.

So, we invest in the opportunity to play so that over time we grow talent and the game as well, and with time it gets to a point where there is value from both sides.

Sounds ambitious...

We are going to hack it. DP World Tour has been advising us over the last four months. They have also introduced us to the PGA (Professional Golfer Association) of America.

The key thing is around creating partnerships rather than sponsorships; that’s the biggest thing that is going to change in our conversations.

Read: Magic of Kenya’s Award-winning Golf Courses

With the partnership, both parties begin to understand how they are going to extract value from this asset which is Safari Tour and once that has been crafted you are then able to decide whether it is going to be one year, two or three, and how you are going to build that value overtime so that you are not investing for one year but able to build on that.

If that works it means that runway will continue for one, have the Magical Open, and then keep going one year after the other. That is how we can grow Safari Tour to be one where the prize money is not probably about $10,000 (Sh1.3 million) but  $30,000 - $50,000 (Sh3.9 million –Sh6.4million) in a very short time, and then it begins to attract players from elsewhere.

Does that explain why South Africans are ahead of us?

South Africa started exactly where we are but they have been at it for much longer. The Sunshine Tour is 53 years old, we are five years old.

The Sunshine Tour was started by professional players until they realised they couldn’t run it and play so they sold the franchise to some billionaire with the agreement that the prize money keeps increasing. That’s how it came up very quickly and continues to be successful. We will get there too.

How much do you estimate Magical Kenya 2025 will generate for the Kenyan economy?

Typically, for the –playing of the event itself, we have got 312 players and caddies combined. We have a technical support team of 40 from abroad.

We have a TV crew of another 40 to 100 because this is being televised globally for four hours every day. Then you have to press which is another 50 plus from outside Kenya.

We would reckon that with visitors and everything else, not only from the region but globally we should get close to 1,500 people coming for the event.

If you take that number of people and if somebody is staying at a hotel for six days at $150 (Sh20,000) a day that is about $1,000 plus other money one is going to spend, say average $1,500 (Sh193,000) multiplied, that’s not bad money for the hotel nights.

Remember they got to eat food and drink; some will visit the park, and if you look at it that way, that would probably come to $5 million (Sh642 million).

Then look at all the other services they require. All those who brought in equipment paid clearing and forwarding companies. Some have hired equipment here; add all that money together, and we reckon that there is at least $7 million (Sh900 million) directly injected into this economy during the 10 days of this event. The prize money is $2.5 million, so you can see the ROI within a week.

Do you also get a share of broadcasting revenue?

That depends entirely on how much the broadcasting company gets. We don’t pay for broadcasting; they come at their own cost. It's syndicated across the whole of the European Tour. The broadcasting company is contracted to broadcast all the European Tour events.

After netting off their costs and putting in a certain depreciation of the equipment, there is always a small premium left. Now that amount of premium is divided across all the events based on the amount of prize money that you have put in.

So, if you out in $2.5 million it's protracted that way. The most lucrative event on the DP Tour the prize money is about $15 million.

That’s a plus to them and there are 40 plus events in the year so if you look at how much is left over, Magical Kenya may probably get about $50,000 to $60,000 (Sh6 million or Sh7 million) as a return of us providing an event for them to film.

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