The PGA Tour is in dire straits, according to PGA Tour Policy Board member Webb Simpson.
Webb Simpson: PGA Tour’s business model “broken” amid LIV Golf’s rise
Webb Simpson, a member of the PGA Tour’s Policy Board, spoke candidly about the state of professional golf at last week’s Sony Open.
Jack Milko has been playing golf since he was five years old. He has yet to record a hole-in-one, but he did secure an M.A. in Sports Journalism from St. Bonaventure University.
Speaking at last week’s Sony Open in Hawaii, Simpson, the 2012 U.S. Open champion, revealed his true feelings about the state of the tour to Adam Schupak of Golfweek.
“The [PGA Tour’s] model is broken [with] the purse sizes we’ve been going [at] the last year,” Simpson said to Schupak.
“Sponsors are pulling out. Wells Fargo, Farmers, there will probably be a couple more this year, I would think, maybe one or two more. I hope not, but that’s a lot of money to put up for a week, considering the price of stadiums, sponsorships, and all kinds of stuff.”
Since the Saudi Public Investment Fund (PIF) launched LIV Golf in 2022, the PGA Tour has seen numerous stars leave for LIV. With its nearly $700 billion in assets, the PIF paid top players like Phil Mickelson, Bryson DeChambeau, Brooks Koepka, and most recently, Jon Rahm, hundreds of millions to join its circuit, which gave it both credibility and notoriety among golf fans around the world.
Each LIV Golf event features $20 million purses, an incredible sum for 48-man fields. It pays additional prize money to winning teams, too.
No PGA Tour event had a purse of that magnitude before LIV Golf’s rise to prominence. During the 2020-21 season, the tour’s final season before LIV, The Players Championship had a $15 million purse, the largest of the year. That tournament, won by Justin Thomas, featured a 154-player field—106 more than any LIV Golf event to date.
That shows how much more money players can make on the Saudi-backed circuit.
Consequently, PGA Tour Commissioner Jay Monahan had no choice but to increase purse sizes for his players. Hence the creation of eight Signature Events for the 2024 season, which, like LIV, also feature $20 million purses and include only the top players on tour.
But the Signature Events have deflated the value of other full-field events, like the Sony Open, the Cognizant Classic in the Palm Beaches—formerly the Honda Classic—and the Farmers Insurance Open.
Top players are skipping those tournaments, as they have circled the Signature Events on their calendars instead. That leads to less viewership on television for full-field events, generating less revenue for players and sponsors.
No wonder the PGA Tour saw Honda, Wells Fargo, and Farmers Insurance walk away.
“I’m close with the Wells Fargo people,” Simpson said.
“They’ve been extremely happy up until having to continue to increase their purse, and they just didn’t feel like it was a good fit for them. So the product is really good. We’ve just got to sell it at the right price. We’ve got to be careful there.”
Of course, the PGA Tour signed a framework agreement with the PIF on Jun. 6, 2023, paving the way to unite and re-structure professional golf.
Since then, talks have stalled, with the hopes of an agreement coming into fruition by The Masters in April. Yet, at the same time, the tour has held discussions with other possible investors, including a consortium of sports ownership groups that now comprise the Strategic Sports Group (SSG).
“I think the sponsors will be very happy with SSG and the group of business guys involved,” Simpson said.
“I think it will make sponsors feel a little more comfortable with the future of the Tour and us asking for bigger purses.”
Should the SSG contribute a substantial investment, and if the tour can finalize a deal with the PIF, significant capital will be available for the PGA Tour. That would greatly help offset the costs that many of the PGA Tour’s top sponsors have had to front.
Plus, sponsors will have to pay more for PGA Tour events in 2025 and be responsible for increased purse sizes, per Bob Harig of Sports Illustrated.
“That’s why we will have to be creative with SSG to figure out how can we continue to increase purses and give a lot of money away and make it sustainable for the sponsors,” Simpson added.
Plenty of creativity among PGA Tour brass will be needed over the next few months. And the future of golf depends on them to figure it out. Because if they fail to do so, LIV Golf will prevail and leave the PGA Tour in the dust.
Jack Milko is a golf staff writer for SB Nation’s Playing Through. Be sure to check out @_PlayingThrough for more golf coverage. You can follow him on Twitter @jack_milko as well.
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