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    Where Does All the Money Come From in Golf?

    Full On Fella Posted on

    Golf has always been considered to be a sport for those with plenty of money. They equipment isn’t cheap to buy, with golf clubs, golf balls and all of the other accoutrements setting you back a pretty penny. Add in the cost of playing a round or even having a membership if you’re lucky enough to do so and you can see why it doesn’t seem like a big sport for people growing up on council estates. Even so, it isn’t exactly easy to fathom where the extravagant sums of money that are paid out in prize money comes from.

    Looking at the PGA Tour

    The world of golf is essentially broken into two nowadays, with the PGA Tour on one side and the LIV Golf crew on the other. The PGA is responsible for most of the competitions that are played throughout the year, as well as supplying the golfers that play in the Majors. As the years go by, the purses on offer for PGA events increases, with the most obvious question being: where does the money come from? This was highlighted in 2021 when the PGA announced to its players that the money pool for 2022 was increasing.

    The organisation said that an extra $105 million would be on offer in 2022, pointing towards $70 million in ‘increased earnings’ and $30 million that came from the ‘PGA Tour reserves’, about which not a huge amount is known. This was in spite of the fact that the pandemic had been close to ruinous for major sporting events that normally took huge sums of money from spectators and were unable to do so. The Tour also launched programs that promised more money to the big-name players who were part of the PGA.

    Yet the increase meant that the overall prize pot for PGA Tour events had increased by around $165 million in the space of a couple of years and was at around $500 million a year overall. How on earth does the Professional Golf Association pay for it all and is it sustainable? Phil Mickelson said, “They would rather throw $25 million here and $40 million there than give back the roughly $20 billion in digital assets they control”. It is the latter part of the sentence that is key: there are huge reserves thanks to ‘digital assets’.

    @michaelfarriertwist Insight into cost of playing tour golf 💰 📈 #pgatour #michaelkim #expenses #golf ♬ original sound – Michaelfarriertwist

    The PGA Tour Commission at the time, Jay Monahan, said that there was a rather more prosaic reason for the PGA’s ability to increase prize money, which was that the media rights deal was paid in the January of 2022, allowing for more money to be paid out. Fans of Premier League football will know only too well how much money can float around thanks to television rights being agreed and paid. By widening the amount of golf on offer, larger deals could be signed with with the media companies who would be broadcasting it.

    the pga tour is desperately trying to find a non-saudi funding source so they can defend traditional golf.

    but whoever they find is going to want to grow the revenue of the game. they will need to get their money back and then some. how? /1

    — Ben Horst (@benhorst.bsky.social) 11 December 2023 at 14:50

    What we do know is that the PGA Tour’s income for 2022 was in the region of $1.9 billion, up from $1.59 billion the year before. It is made up from a combination of the media rights already mentioned and the income from tournaments via ticket and merchandise sales and so on. Add in the fact that the various tournaments are sponsored by several huge, well-known companies and you can see not only where the money comes from but also why each event will have different methods of funding and varied prize amounts on offer.

    What About LIV Golf?

    When it comes to LIV Golf and the eye-watering sums of money that that organisation is paying players, it’s a different story entirely. Unless you’ve been living under a rock, you will no doubt be aware that LIV Golf is organised by the Public Investment Fund of the Kingdom of Saudi Arabia. It launched in 2022 and was sold as being an alternative to the PGA Tour. In reality, however, LIV Golf is designed to be less than a disruptor and more of a sports-washing venture to help to clean up Saudi Arabia’s reputation around the world.

    Saudi Arabia is a country with an appalling record on human rights, with LGBTQ+ people regularly oppressed, victimised and event executed simply for existing in a land where they are not welcome. Sadly, the amount of money available to the PIF thanks to the sale of oil and gas is such that the organisation was able to throw huge sums of money at the issue and persuade countless well-known golfers to make the switch. Former world number one players like Martin Kaymer, Dustin Johnson and Lee Westwood were happy to move to LIV.

    Similar, Major winners like Graeme McDowell, Sergio García and Louis Oosthuizen were also entirely comfortable taking money from the Saudi backers of LIV Golf, in spite of the protests and criticisms aimed at the new tour. The organisation continued to throw money at the situation and was able to persuade more and more golfers to join, including more Major winners such as Brooks Koepka and Jon Rahm. Whilst the PGA Tour has to worry about where it’s money is coming from and explaining it, the same isn’t true for LIV Golf.

    @swingers_club_golf Saudi Arabia’s Sports Washing: Live Golf’s Controversial Impact Revealed #liv #livgolf #golfing #golf #fyp ♬ original sound – Swingers Club Golf

    The players know exactly what they’re signing up for and are happy to turn a blind eye to the issues around the organisation. It means that the only thing that the PGA Tour can do in the long-term is ensure it maintains its prestige, given the fact that it will never be able to out-gun LIV Golf in terms of the money paid to its stars. What LIV Golf doesn’t have, however, are the Majors that make the PGA Tour and European Tour such an important thing in golf. The money may be ‘sustainable’, but the reputation of its competitions is not.

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