The Guarantee: A PGA Tour Threat
Competitive tours could threaten the pipeline talent of young golfers.
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Hey Golfers —
Last week, LIV Golf announced the field for its first event in London beginning June 9th. There are several takeaways — one that caught my eye was the three amateurs in the field of 48.
Ryan French of the Firepit Collective had an interesting tweet in regards to the financial guarantee to one of the amateurs in the field.
$6 million base
$250,000 per start
Friendly reminder, there is no cut in LIV events, and last place receives $120,000.
If the unnamed player plays all eight events, they will walk away with at least $8.9 million, guaranteed.
LIV Golf has been written and talked about hundreds of times — by people smarter than me. Today’s newsletter will break down professional golf’s impending problem; a financial guarantee.
Historically, professional golf is unique because there are very few financial guarantees. The path from being a top collegiate golfer to playing on the PGA Tour is wildly difficult.
The PGA Tour introduced PGA Tour University in 2020. On the surface, PGA Tour U is a great framework to build a pipeline of young stars for the PGA Tour. Here are the quick details of PGA Tour U.
Top 15 collegiate players earn status on various tours
Top 5 collegiate players earn status on the Korn Ferry Tour
Players 6 - 15 earn status on PGA Tour Canada
A player must play on an NCAA Division I program and compete for four years collegiately to be eligible.
Here is the problem — if a competing tour starts poaching collegiate stars with financial guarantees, it could significantly diminish the talent pipeline which will impact the future of the PGA Tour.
A top-five collegiate player heads to the Korn Ferry Tour. What does that mean financially? Here are the average annual winnings of a Korn Ferry Tour member.
2019 — $56,813
2018 — $64,132
2017 — $62,766
How about PGA Tour Canada?
2019 — $10,172
2018 — $10,035
2017 — $9,408
Here is the PGA Tour for our baseline.
2019 — $1,225,318
2018 — $1,329,295
2017 — $1,274,986
Another issue with the Korn Ferry Tour? The average annual winnings in 2010 were $62,823 — those earnings have remained flat. And from a 2019 baseline, have decreased by nearly 10%
The PGA Tour average annual winnings have increased by 19% in the same timeframe.
Let's try to inject a little perspective. The 5th overall draft pick in the NBA will be paid $5,494,100 their first year in the league. The NBA will do around $10 billion in revenue, or about 6.5 times as much as the PGA Tour, so don’t get hung up on the first-year salary, yet.
The median salary of an NBA player is $4,347,600. The fifth overall draft pick will make 26% more than the median NBA player.
If the fifth-best collegiate golfer makes the Korn Ferry Tour average, they will make 4.6% of the average PGA Tour member. Scottie Scheffler lead the Korn Ferry Tour money list in 2019 with $565,338. That amount would be 46% of the average PGA Tour member.
Applying similar logic to the 10th ranked PGA Tour U golfer.
The tenth overall draft pick in the NBA will be paid $3,644,200 the first year — 84% of the median NBA player.
If the tenth best collegiate player makes the PGA Tour Canada average of $10,172 — they will make less than 1% of the average PGA Tour member. In 2019, Paul Barjon lead the PGA Tour Canada money list at $100,000. That amount is 8% of the average PGA Tour member.
Professional golf winners are generally getting younger too. I looked at Major Championship winners from 1990 - 2019. Below is the median age of each winner for each decade, beginning in 1990.
1990 — 33
2000 — 32
2010 — 29
Major Championship winners in the 1990 decade under 30 years of age totaled 9 wins. That number jumped all the way to 21 wins in the 2010 decade. Over half of the Major Championship winners in the 2010 decade were under 30.
I was curious about the average age of a PGA Tour rookie to estimate the time gap between college and playing on the PGA Tour; I couldn’t find anything. So I did the next best thing and looked at the average and median age of the Korn Ferry Tour Top 25 from 2017 - 2019; below is the median age for each year.
2019 — 28
2018 — 27
2017 — 29
It is important to note — this age number isn’t completely accurate since some players had already been rookies on the PGA Tour, but lost status and had to go back to the Korn Ferry Tour.
Let’s assume two things.
A player graduates at the age of 22
My age number is high by two years from the 2019 median
That leaves four years for a top collegiate player playing on development tours — losing money, or barely making money once expenses are paid.
I am in complete favor of PGA Tour U — it is a good concept to reward and develop young players in the pipeline. But it needs some tweaks. The PGA Tour must protect the young pipeline of golfers from poaching by competitive tours.
Have yourself a great Monday. Talk to you next week!
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Insane that DJ is getting more money for playing in LIV than Tiger's career PGA earnings