PGL Looks 'Intriguing' for Top Players, Perhaps Less So For Golf's Existing Media and Sponsorship Partners

JohnWallStreet

Golf Channel analyst Geoff Sheckleford reported on his website GeoffSheckleford.com back in mid-January that the World Golf Group (WGG) - backed by The Raine Group (+ SoftBank and some “Middle East Investors”) - was discussing the formation of a new 18-event global golf tour that would begin play in January of 2022. The Premier Golf League (PGL) would have smaller event fields (think: 48 vs. +/- 150), larger prize pools (see: $10 million weekly purse, $240 million in total) and a team championship format (12 teams, 4 players/per). 

While WGG leadership has indicated that it would like to work alongside - as opposed to competing with - the PGA and European Tours, doubts remain about the feasibility of players participating on multiple circuits. Commissioner Jay Monahan has reportedly told players that joining the PGL would preclude them from retaining their status as PGA Tour members. It should be noted that leaving the PGA Tour would not necessarily impact a player’s ability to play in the four Majors. Those events are controlled by the Tour.

Howie Long-Short: To be clear, the idea that the world’s best golfers are ‘underpaid’ is relative to how prize money is awarded - not the players' total compensation (elite golfers earn a significant portion of their income from sponsorships and appearance fees). Because PGA Tour prize money is distributed on a performance basis, those driving the fan interest (and in turn Tour revenues) don’t always receive a share comparable to the value they bring.

On the surface, the PGL would seemingly be an attractive option for the PGA Tour's top golfers (Phil Mickelson, Brooks Koepka and Dustin Johnson are among those that have acknowledged they are ‘intrigued’ by the concept). Guaranteed paydays (players on the PGA Tour need to make the cut at each event to be paid), larger purses, less competition and fewer tour stops are all player-friendly enhancements to the new tour's structure. What remains far less clear is if the PGL can survive in a zero-sum environment. Sure, if the 18 events were additive to the top players’ current workloads, “sponsors and broadcasters” would overwhelmingly support the plan (think: more exposure, more content), but if a player has to leave the PGA Tour to participate it’s hard to see how “the needle movers” playing fewer events benefits those currently funding the sport.

January 2022 is an aggressive target start date with many of the top players under long-term contracts with their sponsors. Wharton Sports Management Professor Rob Digisi reminds “[existing] agreements were written with the understanding that the players would be playing in a certain number of PGA Tour events. [Sponsors] - particularly those that are publicly traded and under investor pressure to hit quarterly numbers (see: Under Armour) - aren’t going to be amicable to players foregoing PGA Tour events for PGL events until it has been proven that those new events are going to draw a comparable audience.” And there’s no guarantee that will happen quickly, if at all. “During the ’98-'99 NBA lockout, the NBPA put together an exhibition game with all-star rosters and no one cared because the game lacked the authenticity that [NBA all-star weekend] has. Building an audience is not as simple as having the top players playing great courses." It remains to be seen if players would be willing to take haircuts on their existing sponsorship pacts to join the PGL. 

DiGisi believes it’s a "risky proposition” for the top players to leave for the PGL if it means cannibalizing the PGA Tour. Viewership for PGA Tour events is predictable and thus so too are the revenues streams the Tour's prize money originates from. “If the players leave [for the PGL] and the audience doesn’t follow, how long will that large prize pool continue to be funded?” The Wharton Sports Management Professor thinks there is a real chance a mass exodus would inevitably kill the golden goose leaving the players without a fallback option. 

Fan Marino: Rory McIlroy (ranked #1) said on Wednesday that he “is not in favor of the new league” (he's afraid of losing the autonomy he currently maintains to select which tournaments he plays in). While the PFL may not have the support of enough top players to ultimately get off the ground (McIlroy says the players are currently split on the topic), talk of an alternate tour could be enough to spark change within the PGA ranks. When Greg Norman proposed a similar concept +/- 25 years ago, DiGisi said it “lead to a compromise with the PGA and resulted in the formation of the World Golf Championship events.” A redistribution of prize money and some alterations in how players qualify for events would seemingly address some of the elite players concerns.

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