The PGA Tour is on Spending Madness and we know who’s going to get the bill
In the pandemic economy, Gen Z is saying no to the 100-hour weeks that junior bankers, brokers, analysts, marketers and others have so far been required to be paying members of U.S. companies. Finding, attracting and keeping talented people is more difficult than ever, especially when job seekers – from entry level to C suite – have such a wide range of choices for high paying jobs.
The PGA Tour feels this pain, but not from its employees. It’s nearly impossible to force someone with a crowbar who works at Tour headquarters in Ponte Vedra Beach, Florida. endlessly: the best players in the world.
Under the leadership of Jay Monahan, the commissioner with the power of wire transfer, the PGA Tour is paying out millions more, starting in 2022, to players both in the form of increased cash prizes, as well as rewards and incentives.
In essence, it is a bribe, outright. The effort is designed to keep the top PGA Tour players from getting into super golf no matter what Greg Norman faces and who has an almost endless pot of money provided by the Public Investment Fund of ‘Saudi Arabia. And to keep the guys home you the golf consumer will have to pay a lot of the freight and no one has asked you.
On paper, the PGA Tour says it will distribute $ 838 million to players out of projected revenue of $ 1.522 billion in 2022. The Tour made sure to mention that it’s 55% of revenue after Phil Mickelson shouted and accused the Tour of handing out just 26% to players.
And Golfweek reported that the Tour has four to six international events that will provide guaranteed money to top players regardless of their performance, which is a lot like appearance money, which no one seems to care about anymore. . These events could begin as early as fall 2023.
The FedEx Cup prize fund increases from $ 60 million to $ 75 million, with the winner receiving $ 18 million.
The top secret – and no one knows why – Player Impact Program (PIP), which uses a number of metrics to determine the top 10 players who engage with fans the most, has raised its fund to $ 50 million.
The Comcast Business Tour Top 10 rewards the top 10 players at the end of the FedEx Cup playoffs and doubled the fund to $ 20 million. And the Tour throws Ariadne’s crumbs at the proletariat in the form of the Play15 program, in which every player who plays at least 15 tournaments during the season receives $ 50,000.
And the PGA Tour has partnerships with apparel and golf equipment companies that require companies to spend money on players in the form of sponsorship deals.
The tour negotiated a new television rights package of nearly $ 700 million, a 70% increase from the last contract, Variety reported. The title sponsors of the tournament and FedEx are required to purchase 70% of the TV advertising inventory for each weekly TV show, which reduces the risk taken by the networks and helps to ensure that they have a chance to actually profit from the broadcast. golf course, which was not always the case. the case.
And who will end up paying? (The answer is near the end.)
The digital media package has been awarded to ESPN Plus, which has 17.1 million subscribers at $ 6.99 per month, which you’ll have to cough up if you want to watch early coverage on PGA Tour Live. ESPN paid the PGA Tour $ 75 million for the rights, and the Tour negotiated increased coverage of ESPN’s flagship show SportsCenter, which notoriously ignores golf except during major championships.
Streaming is intended to be focused on golf bettors. That is, if you’re stupid enough to bet on anything else in golf than your $ 5 Nassau or the $ 20 buy-in for your weekly aerial fight, but that’s a whole other matter altogether.
The PGA Tour has entered into business agreements and partnerships with four US sports betting / gambling sites. And you can bet that the display screens on PGA Tour Live will use every inch of available space for odds, incidental bets and whatever else they can think of to create a bet. (How many alligators on the course in Harbor Town?)
And of course, the Tour collects a percentage of the revenue generated from golf betting through its affiliate sports betting, which if that aspect takes off the money could be huge.
As the purses and bonuses get bigger, participants in the 50 official Tour events will end up with a bigger credit card balance. Ticket prices for events are set to increase. Coca-Cola, hot dogs, beer, wine, $ 6 bottled water and, oh, yeah, almost any item in the merchandise tent will cost more and it’s not because of the supply chains messy.
But the economy is buzzing, isn’t it, and the average golf fan is wealthy enough that if a day at a tournament costs him $ 40 or $ 50 more than last year, he might notice. be, but that won’t make him growl hard enough to make it count.
And that’s not to mention corporate hospitality – tents and suites whose expected higher prices will hit the marketing budgets of virtually all of the Tour’s sponsors harder. And you don’t think these companies will willingly bear those extra costs, do you?
So who takes this note? Whoever buys the products and services of companies that pay more to entertain customers so that the title sponsor of the tournament can generate more revenue, so that they can pass the increase on to the PGA Tour, which can give 55% to the players, mainly the guys at the top of the leaderboard. (See TV commercial above.) Are you following?
If you’re happy to give a percentage of your annual budget, entertainment or whatever, to the already fabulously wealthy top players in the world, you’re the type of golf fan the PGA Tour wants but isn’t really interested in. Otherwise, it’s a shame because in one form or another you are paying, anyway, whether you watch professional golf or not. Your choice.