The Money Behind The Ryder Cup
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Today At A Glance:
Today’s newsletter breaks down all things Ryder Cup, from financials to player performance bonuses specific to the Ryder Cup. The Ryder Cup is a huge and vital event for all organizations involved.
Read Time: 6 minutes.
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Hey Golfers —
Samuel Ryder sold garden seeds in the late 1890s for a penny from his St Albans, England home. Mr. Ryder's business boomed — he hired over 100 people and moved to a 24,000-square-foot warehouse.
Mr. Ryder made a fortune. Then, at 50, he got hooked on golf.
Mr. Ryder went on to finance several golf events as well as professionals. And in 1927, he funded the British team for the inaugural Ryder Cup played in the United States. Mr. Ryder donated the cup to the winning team of the first Ryder Cup — in today’s dollars, it would have cost around $30,000.
All in — Samuel Ryder financed or donated around $60,000 in today’s dollars in the early days of the Ryder Cup.
Much has changed since the inaugural Ryder Cup in 1927. But one thing remains the same — the teams are competing for the Ryder Cup.
Ryder Cup ownership is split 50-50 between America and Europe. The ownership of the American 50% is the PGA of America. While the ownership of the European 50% is split between three organizations.
The European Tour Group owns 60% of the European side. Here is how the ownership is broken out.
European Tour Group — 60%
PGA of Great Britain and Ireland — 20%
Confederation of Professional Golf — 20%
Each of the three European organizations has specific roles in the Ryder Cup.
The European Tour Group is the Managing Partner and has prime responsibility for all matters concerning The European Team.
The PGA of Great Britain and Ireland is the Founding Partner.
Confederation of Professional Golf is responsible for the management of the Ryder Cup European Development Trust.
Europe owns the rights to this year’s Ryder Cup. The PGA of America owns the rights to the Ryder Cup when played in the United States.
With money going to so many different places — it becomes difficult to track. But we know the Ryder Cup is very successful for the four organizations involved.
When the PGA of America hosted the 2021 Ryder Cup at Whistling Straits, it recognized $192 million in revenue and $143 million in tournament revenue.
And comparing the 2021 year for the PGA of America to the previous year of no Ryder Cup (take 2020 out of the equation) was 2019. The PGA of America recognized $94 million in revenue and $68 million in tournament revenue.
Before the 2021 year — the difference in revenue for the PGA of America in a Ryder Cup year vs. a non-Ryder Cup year was around $30 million.
And it is a similar sentiment for the European side. The European Tour shows Ryder Cup Companies on its financials. The Ryder Cup generated $29 million in revenue for the European Tour in 2021. And total revenue was $335 million.
The European Tour finished with an operating profit of $9.2 million in 2021. Comparing that to the previous year of no Ryder Cup (again, take 2020 out of the equation) was 2019. In 2019 — the European Tour posted an operating loss of $28 million.
Most interestingly — the total EBITDA of the European Tour in 2021 was $22.7 million. Ryder Cup EBITDA was $10.1 million — nearly half of the group’s EBITDA came from the Ryder Cup — on less than 10% of European Tour revenue.
The Ryder Cup does well with viewership in the United States but not quite as well as the majors.
Here is a look at Ryder Cup Sunday viewership since 2002.
And here is how Sunday of the 2021 Ryder Cup compares to the Sunday’s in the 2021 majors.
Masters — 9.5 million
PGA Championship — 6.6 million
U.S. Open — 5.7 million
Open Championship — 4.2 million
Ryder Cup — 3.5 million
Some details regarding the Ryder Cup TV deal.
The PGA of America’s TV deal with NBC for the Ryder Cup is rumored to be $440 million — the deal expires in 2030. The PGA Tour is thought to have a 10% stake in the contract.
Much is made about no prize fund in the Ryder Cup. But that doesn’t mean golfers competing in the event won’t make money.
United States golfers are reported to receive $200,000 to donate to charity.
But there are two key areas where golfers can make money off playing in the Ryder Cup.
Performance bonuses
Future sponsorship earnings
I caught up with David Lyons from Black Swan Sports last week. They had multiple performance bonus policies to pay out if a player automatically qualified for this year’s Ryder Cup. And they paid out one performance bonus just north of $100,000.
I spoke with an agent to learn more about the value of sponsorship when a player plays in a Ryder Cup.
Playing in a Ryder Cup certainly adds value when negotiating contracts. But, the agent mentioned that winning a major, especially the Masters, is more important when increasing a contract with sponsors.
The Ryder Cup is an enormous event — it’s also vitally important to the profitability of the European Tour. And it aids in the financial metrics of the PGA of America. In theory — it should trickle down to better golf and initiatives in America.
Have yourself a great Monday. Talk to you next week!
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