THE PGA TOUR NEEDS LEADERSHIP

How the PGA Tour Mishandled PEDs & the Long Putter And What Can Be Done

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Two recent events and reactions have shown the PGA Tour is in need of some leadership.

 

The PGA Tour has completely bungled its recent responses to performance enhancing drugs (PEDs) and the proposed anchoring ban on putters. These two issues provided the PGA Tour with a golden opportunity to be decisive and take a leadership role, not only golf, but sports as a whole.

 

Instead, the PGA Tour punted.

 

If it seems like the PGA Tours responses on these issues were wishy-washy and weak, it is because they were. I don’t claim to be an expert in leadership, but like the Supreme Court once said about hard-core pornography, “I know it when I see it.” With the PGA Tour, I don’t see it.

 

 

Fortunately, all is not lost. There is a source in professional golf with the authority and power to show the necessary leadership. We’ll get to that but let’s first look at the problem.

 

 

WHY THERE IS A LACK OF LEADERSHIP?

 

First, this is not meant to be a criticism of Tim Finchem, the Commissioner of the PGA Tour. He is likely a fine fellow and a reasonable businessman (more on that below). It is more likely that he simply does not have the authority or mandate to provide the necessary leadership. 

Finchem is also probably hamstrung by the individual desires of the Tour players on these issues. When players speak up against PED testing or in favor of anchored putters, he has to listen because the players are his constituents (not technically, but practically). It is also difficult for other players to take positions strongly critical or contrary to fellow players (e.g. Tiger’s recent comments on the anchored putter being somewhat more moderate once the season started compared to his staunch off-season stand). Although they are fierce competitors, the players are also colleagues and friends. Both of these factors tend to favor the status quo and stifle decisive leadership. Thus, the position of Commissioner itself may not be structured to allow for real leadership in terms of the direction of the sport.

 

Historically, the PGA Tour has not demanded such leadership because golf is an individual sport and thus, a star-driven sport. Ultimately, the success of the PGA Tour is based on the personalities of its stars. Fans do not have a built in loyalty based on a city or club (in the case of soccer in Europe). 

 

As with other individual sports, most of the media and financial power arose from the individuals in the sport – from Arnold Palmer, to Jack Nicklaus to Tiger Woods. Notably, the premier events for golf, being the four Majors, are not even owned and operated by the PGA Tour. As seen by the recent anchoring issue, the PGA Tour does not control the rules of the game (with minor exceptions like lift, clean & replace).

 

At the most basic level, the PGA Tour is an administrative body keeping together a loose amalgam of tournaments in cooperation with the Major events and golf governing bodies. Thus, the PGA Tour and its Commissioner have not needed to be a leader or steward of the game. The role is mostly as an administrator: administer the rules in which players are eligible to play in the sanctioned tournaments and negotiate sponsorships and television contracts.

 

Has the PGA Tour At Least Shown Financial Leadership?

 

As a quick aside, many people suggest the PGA Tour has shown great leadership financially on behalf of the players. They would point to the increase in purses over the past 20 years. While a detailed consideration and judgment of the PGA Tour’s ability to generate revenue is a topic beyond the scope of this article, it is worth of some brief discussion.

It is arguable that the PGA Tour has also failed to achieve its potential in terms of television revenue. No one could reasonably question the PGA Tour’s commitment to charitable giving and how generous it has been over the years. It is a noble aspect of the PGA Tour and should be continued. The question is whether it has left millions, if not hundreds of millions, of dollars on the table.

 

Keep this basic tenet to keep mind: since 1997, golf has had the good fortune of having the most popular, marketable and successful athlete compared to any other sport. During that time period, no athlete in football, baseball, basketball, hockey, tennis, soccer or auto-racing has been consistently as popular, successful and well known (both inside and outside of the sport) than Tiger Woods.

Now consider this: the total purse for all PGA Tour events this year is less than half of what a single network pays the NFL each year for Sunday Night Football and a couple playoff games (NBC). In other words, the combined purse for every single PGA tournament this year is about what NBC alone pays the NFL for the right to show 7 or 8 football games. I’m not even including the other $3.4 Billion (with a B) the other media outlets pay the NFL each year.

 

Of course I only mention this for illustrative purposes. It is not fair to compare golf directly to the juggernaut of the NFL. But the NFL’s media success is reflective of where the value of sports content in the media has headed over the past 20 years. This explosive growth in television rights has not been limited to the NFL. The same near-exponential growth can bee seen in the NBA, Major League Baseball, NASCAR and NCAA football & basketball. In this context, golf has what appears to be a modest television contract – considering it has had at its forefront Tiger Woods. 

In 2007, the reported total purse on the PGA Tour was about $272,300,000 according to ESPN. In 2011, it was reported to be about 288,000,000, which is a modest increase.

 

The PGA Tour does not appear to make a habit of making public the amount of money it earns from television each year. Even the amounts reported in the ESPN articles referenced above seem a bit high when one looks at the tournament purses for the year. The amounts likely include the other tours (web.com and Champions) under the PGA Tour umbrella. The simple exercise of adding up the purses for the PGA Tour events this year (including the Majors for which the PGA Tour is presumably not primarily responsible but not post-FedEx Cup) provides a total $153,900,000.

 

Let’s assume through its television contract, the PGA Tour provides between 60-70% of the purse (which could be generous). At most, the amount of the total purse coming from the PGA Tour (and its television contract) would be 70% of $153,900,000 in 2013 or about $108,000,000. Agreed this is nothing to sneeze at. However, considering the scope and value of sports programming and the amount of content the PGA provides, doesn’t this seem a bit low? Keep in mind this does not include any attendance revenue or other sponsorship money. Granted, the PGA Tour likely does not own any rights to the Majors; but that itself could be considered a failure – especially in light of Tiger’s reign during this time period.

 

The reality is that the estimate of $108M provided by the PGA Tour in purse- money is significantly less (about a quarter) of what Fox Sports pays to NASCAR each year. Again, while the PGA Tour may be congratulating itself for getting a new television contract during the recession, I suspect the PGA has significantly underperformed when compared to other sports. There has been no real talk of recession when national and local television and cable networks have been negotiating contracts with the NFL, MLB, NBA, the Olympics, NASCAR and even the NHL in its most recent U.S. television contract. Sports rights fees both locally and nationally have skyrocketed over the past decade. This does not appear true for the PGA – all while having perhaps the most popular and recognizable athlete on the planet. Does the PGA Tour leadership deserve congratulations for this? In the context of sports media rights today, it could be argued that money has been left on the table. This may have significantly hurt how much players have earned and will earn in the future.

 

Doan 3rd on the PGA Money List?
Doan 3rd on the PGA Money List?

Let’s look at it another way. On the PGA Tour last year, 99 guys earned over $1 million in official money. That seems like an impressive number of millionaires until you look at the sports landscape as a whole. In the National Hockey League (a somewhat regional sport in the United States), there are well over 400 players that will earn over a million dollars in 2013. A comparison shows that the average PGA Tour player does not earn at the level of other average professional athletes. Consider the following: the 50th highest-paid player in the NHL (Shane Doan) has a salary that would put him 3rd on the PGA Tour 2012 money list – only behind Rory and Tiger. Also keep in mind that the NHL players have all their travel and accommodation covered by the team – which is not the case for PGA Tour professionals. The PGA Tour does have an excellent pension plan likely better than these other sports. Even so, if I were the 50th best player on the PGA Tour (dare to dream!), I would start asking some questions.

 

The NHL is not even one of the bigger sports media properties in the United States. The NFL, MLB and NBA are much more lucrative. A look at MLB salaries from 2012 shows that Jacoby Ellsbury, the 110th highest-paid player in baseball, had a salary that would have led the 2012 PGA Tour money list. We could go on but you get the idea.

 

With the amount of television and media coverage, someone must be making a lot of money broadcasting golf. It does not appear to be the players.

 

However, while not completely separate from leadership, money is not the primary point of this article. The issue is leadership in terms of the sport of golf as a whole. Unlike many of the other professional sports listed above, golf is a sport in which many, if not most, of the fans actually participate in the sport to some degree. Thus, in the modern media landscape, leadership is necessary and the PGA Tour cannot abdicate the responsibility of being a steward of the game to the governing bodies.

 

One of the reasons I hesitate to criticize Finchem or his predecessor Deane Beman for failing to be lead on the topics of PEDs and how the game is to be played (anchoring) is that handling these issues was not necessary when they were hired.

 

It is now.

 

Page 2: WHY LEADERSHIP IS NECESSARY ...

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