In 1992, Fred Couples made history by becoming the first player on the PGA Tour to win $1 million before the start of May. That year Couples had two wins and two second place finishes heading into The Masters in April, which he also won, pushing him past the milestone. He would soon be joined by Davis Love III, who won the Players Championship in March and the two tournaments immediately following The Masters in April.
Move forward to 2022 when Cameron Smith and Hideki Matsuyama have each already won over $1million in January for just one week’s work by winning the Sentry Tournament of Champions and the Sony Open, respectively.
This season the PGA Tour is distributing a record $427 million in prize money in 47 official tournaments, up $60 million (16%) from the $367 million the tour paid out last season. That works out to an eye-popping average purse per event of $9.1 million. (these totals don’t include the four Majors). The 2022 Players Championship alone will pay out a whopping $20 million, the richest golf tournament ever staged in history.
In 1992, the biggest prize on offer on the PGA Tour was $360,000 for winning the Tour Championship. This season the smallest winning prize on offer is $660,000. In fact, only four tournaments will pay their winners less than $1 million this season, and all of them are alternate events staged in a week with another bigger event.
Last week John Rahm talked about the Tiger Woods effect on scoring on the PGA Tour. Well, the Tiger effect extends to prize money on tour too.
The Tiger effect
In a widely talked about analysis published in Sporting Intelligence in 2014, Roger Pielke Jr. calculated that Tiger Woods was single-handedly responsible for around half the increase in prize money on tour from 1997 to 2008.
Pielke went about his analysis as follows: Between 1990 and 1996, the average annual increase in prize money was 3.4% (adjusted for inflation). But starting from 1997 – Woods’ first full year as a pro (Woods debuted in late 1996) – prize money grew at an average of 9.3% through 2008.
That represents an almost three-fold increase from the previous rate of 3.4%, which Pielke attributes directly to Woods’ extraordinary excellence and popularity. He calculates that if the Tour had continued to grow at 3.4% from 1997 to 2008, it would have handed out $.15 billion to the players. What it actually gave out was $3.1 billion, so Woods was responsible for the difference – a staggering $1.6 billion.
To be sure, the assumption that the Tour would have continued to grow at the same 3.4% without Woods is questionable. Had there been no Woods, perhaps Phil Mickelson would have become the face of the Tour. Mickelson has a large fan following of his own and plays an attacking and entertaining style of golf. Maybe his popularity would have led to purses increasing by more than 3.4% too?
What is clear though is that the scale of Woods popularity was unprecedented, and we can safely assume that even if Woods was not responsible for 100% of the difference, he was responsible for the vast majority of it. It’s something Mickelson, who Pielke quotes in his piece, stated in 2014: “It’s unbelievable the growth of this game. And Tiger has been the instigator. He’s been the one that’s really propelled and driven the bus because he’s brought increased ratings, increased sponsors, increased interest, and we have all benefited, but nobody has benefited more than I have, and we’re all appreciative. That’s why we miss him so much; we all know what he’s meant to the game.”
Former PGA Tour Commissioner Tim Finchem deserves credit too
Of course, the Tour needed an astute leader who could capitalise on Woods’ popularity. Tim Finchem took over as commissioner on June 1, 1994, from Deane Beman, who had laid the foundation of the Tour and primed it to become the commercial juggernaut it is today.
As luck would have it, when Woods won the Masters in 1997, Finchem was in the middle of a TV rights negotiation. He saw his opportunity and seized it. Over the next 22 years, he more than tripled the value of the Tour’s TV contracts and increased prize money over four times from just under $100 million on three tours when he took over to more than $400 million on six tours when he retired in 2016.
He also played a pivotal role in the taking the PGA Tour beyond American shores, and in creating the Presidents Cup, the World Golf Championship events, and the FedEx Cup. In 2020, Finchem was elected to The World Golf Hall of Fame as a contributor to the game.
A new challenge
In November, current PGA Tour Commissioner Jay Monahan sent out a memo where he stated that: “We are positioned to grow faster in the next 10 years than we have at any point in our existence.”
The Tour has also created a Player Impact Program – worth $50 million this season – that will be distributed to the players with the highest social media impact. The FedEx Cup pot has also gone from $60 million to $75 million, an increase of 25%.
These changes, which benefit the top players the most, and Monahan’s bullishness, have been driven largely by the threat of a new world tour bankrolled by Saudi Arabia. Similar in concept to the since discredited Super League in football, the idea is for the world’s top players to play against each other in 10 limited field events with guaranteed prize money. Should the players sign up, that would deplete the U.S. Tour and make it less attractive to sponsors and broadcasters.
That said, the Tour has faced the threat of a world tour before. The last time it responded by creating the World Golf Championships, which took the Tour to Europe and Asia and offered the best players more prize money. How the PGA Tour continues to respond this time will determine the future of the tour, and the shape of world golf.
Photo – Golf Channel