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The Money Behind The PGA Championship
The tournament is a huge driver for the PGA of America and Rochester, New York.
Every Monday, I write a newsletter breaking down the business in golf. Welcome to the 19 new Perfect Putt members who have joined us since our last newsletter. Join 6,766 intelligent and curious golfers by subscribing below.
Today At A Glance:
The PGA Championship has a significant financial impact on the PGA of America and Rochester, New York. Today’s newsletter breaks down the money behind the event.
Read Time: 5 minutes.
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Hey Golfers —
The PGA Championship first-place prize has increased by nearly $2 million since 2010. Brooks Koepka brought home $3.15 million versus Martin Kaymer’s $1.35 million first-place prize in 2010. And the total purse has increased by $10 million in that same period.
The first-place payout was the highest year-over-year increase in PGA Championship history.
It marks the second-highest major first-place prize in golf. However, the USGA and R&A haven’t announced purses for their respective tournaments later this year.
Masters — $3.24 million (2023)
PGA Championship — $3.15 million (2023)
U.S. Open — $3.15 million (2022)
The Open — $2.5 million (2022)
When the major championships conclude in a couple of months — I expect the U.S. Open to offer the largest purse and first-place prize in major championship golf.
So what does the win do for Brooks Koepka from a financial standpoint?
Professional golfers earn bonuses for winning majors from their sponsors. Some players have ‘win bonuses’ written in their contracts that may exceed the actual tournament winnings.
Brooks’ situation is unique in the sense he is a LIV Golfer. From what I have been told — win bonuses for LIV Golfers aren’t as prevalent. But that doesn’t mean Brooks doesn’t have ‘win bonuses’ in his contract.
Koepka signed a multi-year deal with Srixon in late 2021. And he lists five sponsors on his website.
I would be surprised if Brooks didn’t have ‘win bonuses’ written in his contracts from his sponsors. And a player of Brooks caliber could command several hundred thousand dollars, or more, per ‘win bonus’. Brooks undoubtedly will earn more than the $3.15 million first-place prize.
Although Michael Block didn’t win — the financial implications of his 15th-place finish will create enormous opportunities.
The 46-year-old teaching pro has played in two dozen PGA Tour events since 2007. His total earnings before his PGA Championship finish were $38,038. Michael earned $288,333 for his 15th-place finish this week — more than seven times what he has won on the PGA Tour since 2007.
The PGA Tour allows seven sponsors exemptions per year. Michael has already received two after he signed his scorecard on Sunday.
RBC Canadian Open
Charles Schwab Challenge
Michael will have more sponsor exemptions coming his way. He will be able to play for millions of dollars on the PGA Tour for the remainder of the year.
Michael is on staff with TaylorMade and Nike — he provided millions of digital media impressions to the brands over the course of the week. If the two brands don’t provide him with a performance bonus for his play, they will work with him as he plays in more PGA Tour events this year.
Michael has added over 90,000 followers on Instagram this week. And that number will continue to rise. Michael now offers brands a ton of exposure with his social media platforms.
The 15th place finish for Michael is life-changing.
The PGA of America has four major events under its umbrella.
Senior PGA Championship
Women’s PGA Championship
The PGA of America recognized $128 million in revenue in 2018. The primary driver of that revenue was from tournaments at $94.7 million.
And of that tournament revenue — the PGA Championship is the largest revenue generator for the PGA of America.
The PGA Championship's most significant revenue generators.
ESPN/CBS media deal
The PGA Championship is in the beginning stages of a media deal with ESPN and CBS that runs through 2030. The tournament had the third-highest TV ratings of the major championships in 2022, with 5.27 million viewers during the final round.
One thing to note — annual revenue fluctuates with the PGA of America as the Ryder Cup brings in around $30 million.
Hosting a PGA Championship has a massive economic impact.
Rochester, New York, has a little over a million residents in the metro area. The city does not have any major professional sports teams — they do have four minor league sports teams.
Rochester estimated the PGA Championship would generate $190 million for the city. The tournament created over 1,200 part-time and full-time jobs.
The city estimated that 6,000 hotel rooms would be used for the tournament, and an average visitor would stay between two and three nights for their stay.
Rochester estimated they would generate over $19 million in tax dollars for the state, county, and city.
For context — Tulsa, Oklahoma, brought in $157 million last year after hosting the PGA Championship.
The PGA Championship has a significant financial impact on several parties, including the PGA of America, Rochester, New York, and the players that play in the event.
Have yourself a great Monday. With the holiday next week — I will be coming to you in two weeks!
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