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PGA Tour Pros Want Bigger Piece of USGA Pie

PGA Tour Pros Want Bigger Piece of USGA Pie

If you are old enough to remember “Trickle Down Economics,” well you are pretty old.

According to a report filed by Golf Channel’s Rex Hoggard, the PGA Tour Players held their first meeting of the year during the Farmers Insurance Open and there were questions about the smaller trickle (or percentage) of total revenue they are receiving from the U.S. Open.

Wait a minute, didn’t the USGA announce an increase in the total purse for 2017 to $12 million. That’s $1.5 million more than the PGA Championship, $2 million more than the Masters and $3.55 million more than the Champion Golfer of the Year will receive for winning the Open Championship. He does get that cool wine jug thingy, although the Masters champ gets a one-of-a-kind sports jacket.

How can PGA Tour professionals complain about the purse sizes, when first-place checks are routinely north of $1 million?

Last year the 125th man in the FedEx Cup ranking, Retief Goosen earned $745,000 in prize money, plus a record 107 tour pros made at least $1 million for the year. Dustin Johnson topped the 2016 PGA Tour money list with $9.36 million in total earnings.

In 41 events on the 2016-17 PGA Tour schedule total purses total $320.3 million, but let’s not forget the four FedEx Cup events that add another $35 million in prize money for the 125 players that qualify. And, then there is the additional $35 million FedEx Cup bonus pool that is divided among the top 150 players at the end of the season, of which, the FedEx Cup champion receives a cool trophy and a $10 million check.

I am not a math genius, thank goodness my smartphone calculator didn’t blowout a microchip, that all totals a little over $390 million, available to the 200 or so touring professionals on the PGA Tour.

All of this does not include endorsement deals, which will double or quadruple a player’s annual income. And, I will not even try to calculate the annual income someone like Phil Mickelson or Tiger Woods will receive from the PGA Tour Retirement Plan. Suffice it to say, it is a significant number.

The current pay structure is very good for the players on the PGA Tour, but the problem is that as total revenue to the organizing bodies, especially the USGA have increased, the percentage of that revenue paid out to the players has decreased significantly.

In the case of the U.S. Open, Fox is currently in the third year of a 10-year $1.1 Billion broadcast rights agreement. Under the previous contract with NBC, the USGA received $37 million annually, and the purse for the U.S. Open was $10 mil, thus the players received 27% of total revenue. Now that Fox is paying $110 million per year, the new $12 million purse, which equates to 11% of total revenue, is a lot less than the 27% they were receiving.

Someone, who is really good at figuring out percentages, probably an agent, noticed this discrepancy and the players are beginning to believe that someone else is getting rich off of their hard work.

They are not too happy about it. They envision their healthy cash flow slowing to a trickle. If you can call $390 million a trickle.

If anyone has a beef here it should be the LPGA Tour. The total purse for the U.S. Women’s Open is $5 million. It is the largest on the women’s tour, but its less than half of what the men receive. Who figures this stuff out?

I can’t wait for equal pay for women advocates to realize the shocking difference. The USGA and the LPGA are going to get a ton of free publicity in media across the land. The kind of PR the USGA could probably do without. They think they have problems now by holding the 2017 U.S. Women’s Open at Trump Bedminster, just wait.

Back to the PGA Tour, the players are beginning to wonder if purse sizes shouldn’t be raised across the board?

With new television agreements presently being negotiated, methinks the tour players may want to take a softer tack on this topic.

With new internet television options and various alternatives to network broadcasts, as well as, declining viewership numbers across network platforms. New TV deals will most certainly not resemble the old ones.

That could mean sizable cuts in future purse sizes.

The way live golf, or any live sports competition, reaches fans in the future is going to change. How will the PGA Tour and other professional golf promoters react to maximize their revenues and create the dollars for acceptable purses for the players, is a very good question.

This is not the last we will hear on this subject. The upcoming changes to network sports broadcasts, golf, in particular, is one of the most intriguing topics in all of sports today.



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About Fred Altvater:

I admit it – I am a golfaholic, as well as a teaching professional. I have enjoyed playing the grand game of golf for over 40 years. In addition to playing, I find teaching golf very rewarding – I love to see students when they finally hit that great shot, make the long put, chip in or kill that long drive. - See more at: Toledo Ohio Golf Lessons - About Fred