Pro Golf: A Look at 990's
A dive into the PGA Tour, USGA, and LPGA Tour 990's.
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Hey Golfers -
A couple of exciting pieces of news took place in the last few weeks.
The PGA Tour released a players memo disclosing forecasted revenue
The USGA is raising the U.S. Women’s Open purse to $10 million
Over the weekend, I looked at the 990 Forms of each United States-based professional golf association. A 990 Form is an IRS form that provides the general public with financial information regarding a specific nonprofit organization. The 990 Form typically lags a year or two, but it can give us an interesting perspective.
Lets breakdown the below organizations:
PGA Tour
USGA
LGPA Tour
The most recent 990 Form of the PGA Tour is for 2019. However, we have the player memo that was sent in late November. The PGA Tour expects to do $1.522 billion in revenue in 2022 — this is in line with previous years.
The growth from 2015 - 2019 represents a 4.59% CAGR. Taking the PGA Tour information from the expected forecast of 2022, we can expect the CAGR value to be lower.
It is believed that Jay Monahan’s compensation is around $4 million per year.
There were interesting pieces of information in the PGA Tour player memo:
85% of revenue is generated from tournaments
15% of the remaining revenue is generated from TPC Network and licenses
$716 million in operating expenses
$838 million of total player compensation allocation
$685 million in the form of player earnings
55% of revenue is directed back to the players
The PGA Tour has an interesting compensation relationship with its players since they are independent contractors. They do provide health insurance, disability insurance, and daycare.
The PGA Tour has made significant purse and bonus changes for the 2022 season.
FedEx Cup Bonus increased to $75 million from $60 million
Comcast Business TOUR Top 10 increased to $20 million from $10 million
PIP increased to $50 million from $40 million
Introduced the Play15 Bonus of $10 million
Prize money increased to $427 million from $367 million
THE PLAYERS increased to $20 million purse from $15 million
The 55% of revenue is fascinating if we compare it to the UFC. The UFC’s revenue in 2019 was $900 million. It is important to note; they saw explosive growth during the pandemic. UFC revenue is likely around $1.2 billion. According to their 2019 financial filing, they paid 16% in revenue to fighters — a much lower figure than what the PGA Tour is expected to pay in 2022.
We can take it further and look at the below sports and their revenue to player compensation ratio, the PGA Tour has done a great job in this aspect.
Here is the rundown of each league commissioner’s compensation.
NFL: Roger Goodell — $63.9 million
MLB: Rob Manfred — $11 million
NBA: Adam Silver — $10 million
NHL: Gary Bettman — $9.6 million
Below is a look at the NFL, MLB, NBA, NHL, and PGA Tour 2019 total revenue numbers. The NFL is 10x the revenue of the PGA Tour and 42% higher than the next closest sport, MLB.
Mike Whan and the USGA Team made a huge announcement on Friday — The U.S. Women’s Open will increase the purse to $10 million; nearly doubling what it was in the 2021 season at $5.5 million. The winner receives $1.8 million. Amazing.
The USGA makes its financial statements readily available on its website. To keep the newsletter consistent, below is 2015 - 2019 revenue. The USGA has reported 2020 revenue; they recognized $492,827,000. Why the huge jump? FOX paid the USGA a one-time fee to exit its media deal with the USGA.
Mike Whan’s compensation in 2020 was $1,176,119.
The LPGA Tour has made incredible strides in growing its purses. We will see $100 million soon, likely in 2023 or 2024.
Here is a quick rundown of the changes to the LPGA Tour purses.
ANA Inspiration increased 60% to $5 million
AIG Women’s Open increased to $6.8 million from $5.8 million
Cognizant Founders Cup doubled to $3 million
The five-year CAGR of the LPGA Tour revenue is 3.58%, not too far off from the PGA Tour five-year CAGR.
Professional golf has put itself in a solid position going forward. I expect them to continue to capitalize on the growth of the game. The USGA is in a great spot with Mike Whan, we can expect to see more exciting developments over the years.
Have yourself a Monday, talk to you next week!
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It is a solid question - I couldn't find it published. But if we looked at 2019 - the LPGA had $70 million in purse money and did $132 million in revenue. It is likely around that 55% mark on the PGA Tour.
Very interesting! Is the revenue/athlete’s split the same on the LPGA as it is on the PGA (55%)?