Growing Your Income

LIV Golf has gotten one thing right, and the PGA Tour might have to copy it

LIV Golf has gotten one thing right, and the PGA Tour might have to copy it

There must surely be days when Jay Monahan can empathize with Winston Churchill’s wry observation that the best argument against democracy is a five-minute conversation with the average voter. As commissioner of a “member-led” organization, Monahan is bound by the political reality that the PGA Tour’s lower orders—many of whom couldn’t be identified in a line-up by fans—wield power equal to its upper echelon, upon whom the success of his product depends.

Those are some awfully tight handcuffs when you’re fighting an outfit fueled by personal animus and financed by Saudi Arabian oil money, with no apparent accountability on either. Which raises the question of whether the PGA Tour’s very business model may one day be a sacred cow that Monahan and his board are forced to slaughter.

The negatives associated with LIV Golf are almost as plentiful as the social media bots it employs to “whatabout” critics and otherwise rally those whose susceptibility to automated arguments is painfully evident in the body politic. There’s the sportswashing on behalf of a loathsome regime, the questionable competitive standards, the laughable shotgun starts, the shallow fields, the ever-changing teams component. But LIV also may have gotten one thing right that its rivals face an uphill battle to copy: contracting its talent.

It has long been the self-congratulatory gospel of golf professionals that they only eat what they kill, that they don’t get paid if they don’t perform. That isn’t true in most major sports, where guaranteed contracts are the norm. LIV has brought that concept to golf, but predictably bastardized it. Contracts don’t assure athletes of a place in the game nor protect them from being benched in big moments, but the washed-up beneficiaries of LIV contracts will remain in tournaments no matter how lousy their performances. They are required to continue soiling themselves publicly with execrable scorecards.

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In normal commercial endeavors, contracting talent makes sense. Athletes trade freedom over their schedules for financial security, and teams or leagues have the ability to control their product and protect assets. The response to LIV by the PGA and DP World tours has been to apply lipstick to a dated model that might no longer be fit for purpose. The increases in prize money and bonus payouts that have been announced come with a significant caveat: they are performance-based, the money has to be earned. The only guarantees are a tee time and an opportunity, and enough poor showings will jeopardize both.

LIV is being widely mocked over the amounts it has spent on contracts (spare a thought for some hapless fall guy at the Public Investment Fund when the Crown Prince peruses the cost of financing Greg Norman’s grievances), but the problem is less the cash than who it is bestowed upon. In the context of sports contracts, paying Rory McIlroy or Jordan Spieth $100 million over three years makes more sense than flushing a fraction of that on Lee Westwood or Henrik Stenson. Relevancy matters, and as of now all of the relevant players are all still aligned with the PGA Tour.

Ensuring that remains so means ring-fencing talent for the future, and the success thus far of the LIV model means the PGA Tour may need to consider offering guarantees too. As with every sport, contracts would be scaled to stature. Most player guarantees would be nominal, only enough to cover expenses, with the potential of fresh deals for fast-rising talent. Stars who drive the product would be rewarded commensurate with their contribution. Members sacrifice some control of their schedules, tours gain the ability to deliver elite fields to key sponsors and broadcast partners.

I asked one top player if he would give up his much-ballyhooed independent contractor status for a guaranteed contract. “Yes,” he replied quickly, saying that LIV is exploiting a weakness in the existing model.

“Fans don’t know where PGA Tour stars are going to play week in and week out, sponsors don’t know what they are buying, and ditto for NBC/CBS. [Full disclosure: I am a contributor to Golf Channel, which is owned by NBC Sports.] If you can create 12-14 ‘big’ events where the stars have to sign up for a majority of them, say 10 of 12 or 12 of 14, plus majors and a couple more then that starts to look more attractive to sponsors, TV and fans. The era of maximum playing opportunities needs to go and the era of the best against the best more often needs to start.”

PGA Tour insiders would likely dismiss concerns about fans or partners not knowing who is playing any given week since that has never been reflected in commercial terms, like broadcast rights, sponsorship deals or prize money, all of which have grown through recessions and tough times. But these times demand new thinking, even if the hurdles are many and obvious.

Start with the reluctance of the Tour to blow up a business model that, while stressed, has not failed. Nor would it be an easy sell to players content with their well-cushioned mediocrity. Financing any new structure could mean foregoing tax-exempt status and soliciting private equity that would demand a return on its investment (a business imperative that seems quaint next to the profligacy of Norman). Lastly, there is the reality that looms large in every discussion about LIV: in almost every other sport, the leagues giving the contracts control the biggest events, but not in golf.

At the Open Championship, the R&A’s chief executive, Martin Slumbers, made explicitly clear that the first two LIV events—limited fields, limited talent, no cuts—didn’t rise to a level of competition worthy of securing a spot in the Open. His view isn’t a minority position among those who run the major championships. But guarantees need not be antithetical to competition nor a dilution of the product. Performance must still count for a lot—not least access to majors—regardless of the contract a player enjoys

Whether the PGA Tour feels the need to contract players will probably be determined in part by what changes the majors make to their eligibility criteria, and whether that hobbles LIV’s prospects. That shouldn’t be the decisive consideration. The member-led mantra that has governed the Tour for a half-century is commendable as a philosophical position, but ill-suited to the commercial realities of the modern sports business world. Just because Greg Norman wants to destroy the PGA Tour, doesn’t mean there aren’t aspects of it that ought to be dynamited on merit.


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