Tour isn't about to tighten purse strings
Andrew Redington/Getty ImagesGreg Norman, whose tour earnings exceed $10 million, has suggested a decrease in prize money.After 37 consecutive weeks of PGA Tour golf, those who have made it to next week's Tour Championship can rest, reflect and rejoice.
Rest, because those who have advanced to this point need it after a grueling -- by golf standards -- stretch in which most of them played six of the past seven weeks in order to position themselves for the final FedEx Cup playoff event.
Reflect, because they have a week to think about how their year has transpired, and how they might make one last push at 2009 glory.
And rejoice, because no matter what happens next week in Atlanta, every one of the 30 who advanced will be rewarded handsomely -- no small feat in these economic times.
The player who finishes last at the Tour Championship is assured $120,000 in prize money, while the 30th-ranked player in the FedEx Cup standings receives a $175,000 bonus. The winner of the tournament receives $1.35 million, while the overall FedEx Cup champ gets a $10 million bonus. Everyone in between will be compensated quite nicely.
For the fourth straight tournament, they'll be competing for total prize money of $7.5 million, as each of the four FedEx Cup events boosted their purses $500,000 this year.
And not everyone thinks that is right.
"I would not have raised purses last fall, not because they couldn't, [but] because I thought that sent the wrong message," said Seth Waugh, CEO of Deutsche Bank Americas, which sponsors the Deutsche Bank Championship, the second of the four playoff events.
"Every model of every business is under pressure, and sports is one of them. You've got to create more value for people, either by doing it cheaper or by creating more value for people to do it because people want a deal and want to feel like they're getting something. ... Everything in the world costs less than it did two years ago."
Waugh is not alone in feeling that the tour could have sent a strong message by at least holding the line on purses this year -- or even lowering them -- to either give title sponsors a break or perhaps find a way to funnel more funds to tournament charities.
Greg Norman has suggested more than once that prize money should be cut "out of respect to every citizen and taxpayer who's suffering dramatically. It seems like the PGA Tour players are still playing for a million dollars [for] first [every] week, like they're recession-proof."
Tournament purses this year ranged from $3.5 million for an opposite-field event to $8 million for the Players Championship. Most regular PGA Tour events were between $5 million and $6.5 million, with the World Golf Championship and playoff events getting a $500,000 boost in 2009, as per contractual agreement.
PGA Tour commissioner Tim Finchem said last week at the BMW Championship that purses have "flattened" and will continue to do so, but that he foresees no purse reductions.
"We wanted to continue to grow," Finchem said. "And our plan is to continue to grow. And that means purses and charity dollars.
"Compensation for world-class players in this sport continues to pale in comparison to the team sports. Pales in comparison. That doesn't mean we wake up every morning and want to get the dollars that the NBA player gets, but we want world-class players in the sport to be able to play for a lot of money.
"That means a lot of things. It says that the sport is vibrant. It creates more interest; it draws more young athletes to the sport compared to other sports. That's in our interest. We have made great strides in the last 10 years of attracting a higher percentage of good young athletes who can play baseball, play basketball, play football to this sport. We think that's in our long-term interest. So we don't want to go backwards.
"I think that's a reasonable position to take, and as long as we're also fully focused on the charity side of the equation, I think our fans understand that."
And yet Finchem acknowledges that charitable contributions from PGA Tour events this year will be off slightly from 2008. That's due to the struggles that local tournament organizers have had selling their events, whether it be to lower-level sponsors, pro-am participants or through ticket sales.
The economy has hurt across the board, and though Finchem said there is not a direct correlation between what a company pays for a title sponsorship and the amount that goes to charity, some have suggested that any decrease in purses could have meant more for tournament beneficiaries -- depending on the situation.
"It could affect the charities directly, assuming that your revenues aren't lower as well," said John Kaczkowski, CEO of the Western Golf Association, which runs the BMW Championship. "If you lower the purses and the title sponsorship commitment does not go down, it could impact the charities in a positive way. But if you're trying to lower the commitment for the company, then that wouldn't necessarily be the case.
"You're talking more about, 'Times are tough, this is a recognition of that, we're going to lower purses.'"
A regular PGA Tour event with a purse in the $5 million range costs approximately $7 million per year to the title sponsor. Fees and contracts vary, but a portion of that fee goes to the purse (the PGA Tour makes up the difference through its television-rights fees), while funds are also earmarked for minimum television advertising expenditures as well as fees paid to the tour and to the local tournament organization for operating expenses.
The problem is, every tournament is different. And contracts were signed, in some cases through the 2010 season or through 2012.
"It's delicate," said British Open champion Stewart Cink, a member of the PGA Tour's policy board. "If you look at our performance as a tour, as a business, purse level is one of the benchmarks for us. Even though it doesn't say that anywhere in our mission statement, it is [true] and always will be. Our TV negotiations happened before the economy changes. It is what it is. It would be complicated to roll back the purses. Where would the rollback go? And if the economy picks up in 2011, then what happens? Do we go back to the companies and say we're going back to where we were? It's a sticky situation. We deal with our sponsors individually, we try to do the best we can for everybody. It's hard."
Cink said he suggested players donate a percentage of every tournament purse to charity, but laughed when he said, "I'm the only one who seemed to like that idea."
Of course, even PGA Tour players don't want to see their pay cut, even if it is in the form of prize money. Many do their own charitable work and contribute indirectly to tournament charities by being required to play in Wednesday pro-ams. And to require everyone to give a percentage of winnings might be unfair to those who are barely making a living playing golf.
At least if purses are cut, players still have a chance to make more money the old-fashioned way -- by playing better.
For what it's worth, the LPGA announced this week that two tournaments on its schedule later this year will have purse reductions of $200,000 each, while another tournament next year has a purse reduction of $400,000 -- although that tournament likely would have gone away without such a cut.
The PGA Tour, meanwhile, has seen just one tournament purse lowered this year -- by $500,000 -- and that was at the Memphis event formerly sponsored by the Stanford Financial Company, which is enduring numerous legal issues.
"Our objective is to do the things that we need to do to continue to grow as we come out of a downturn, and it's not our intention to go backwards to get ready to go forwards," Finchem said. "Our intention is to slow our growth during this period and then come back and grow more, and that's what we want to do."
Bob Harig covers golf for ESPN.com. He can be reached at BobHarig@gmail.com.
