Deep into PGA Tour CEO Brian Rolapp’s state-of-the-tour news conference on the eve of the Players Championship earlier this month, the following exchange took place:
What is your perspective on the tour not owning any of the five biggest properties in golf between the four majors [and] the Ryder Cup, and specifically, is there the potential that the tour would try to invest in or potentially outright purchase one of those properties?
ROLAPP: I mean, we focus more on – I sort of worry about the things I can control. We focus on making our tour and our events better. I do think, and I’ve talked to other governing bodies about this … I think it would be a benefit for the entire golfing ecosystem to work closer together commercially. I think it’s important. I think if you look at all of those golf organizations, at the end of the day, they are entirely financed by professional golf and professional golfers. So the entire ecosystem is funded by the success, or quite frankly – it wouldn’t be successful without the success of professional golf. That to me just lends that there should probably be more collaboration in that regard.
Brian Rolapp and Players champion Cameron Young
Ben Jared, PGA Tour via Getty Images
The fundamental issue that Rolapp telegraphed with his comments is that the PGA Tour derives very little economic value from the professional game’s five biggest events. The issue is not new but given the tour’s for-profit venture – PGA Tour Enterprises – created by its investment partnership with Strategic Sports Group, the issue is under a spotlight like never before. Yes, PGA Tour members are playing for big paychecks, but the tour itself has no ownership stake in any of the majors or the Ryder Cup, and these events do not deliver any value to the tour’s broadcast rights offering. Rolapp’s comments suggest he believes that this must change in order for the tour to deliver a satisfactory return on investment for its investors.
According to my sources, it is quite likely that the message Rolapp was delivering is that the pooling of media rights by the operators of the men’s majors is a first step that could provide significantly increased revenue for all. This is not a new notion, but it has new energy under Rolapp. Few are as knowledgeable or savvy when it comes to sports media rights fees in America than Rolapp, and so it is hard to argue against his presumed reasoning.
It’s fair to conclude that Rolapp’s National Football League background might give rise to a belief that a “majors package,” like a “Thursday night package” or a “streaming package” of NFL games, would generate more revenue for all to share. Such a scenario might also enable the tour to gain backdoor access to a piece of that revenue – and to major status for the Players Championship.
However, all parties would have to proceed very cautiously if they were to explore this possibility due to antitrust concerns. The U.S. Department of Justice investigation of the PGA Tour for anticompetitive behavior in its dealings with players following LIV Golf’s 2022 launch remains open, although it appears to be dormant now. The investigation began during the Biden administration, and the second Trump administration has not said anything about it or moved to close it thus far. There is a fine line that separates collaboration from anticompetitive behavior. It stands to reason that pro golf administrators hope the golf-loving president will make the investigation go away.
One way or another, the tour wants a piece of the action from men’s majors and the Ryder Cup because those events are “financed by professional golf and professional golfers” … which is to say Rolapp’s PGA Tour players. That piece could come in the form of higher purses for his members, or what one industry executive termed “a toll or a royalty.” Equity ownership in the majors and Ryder Cup would also be welcome.
The Masters trophy
Anthony Kwan, R&A via Getty Images
Consider the Masters. It is not a PGA Tour event, although casual pro golf fans would not realize this. The Masters is an Augusta National Golf Club-owned and -operated event, is typically the highest-rated televised golf tournament each year and enjoys bountiful revenue from media rights fees around the world. Augusta National has its own U.S. television deal with CBS, selects the very few sponsors and has its own eligibility criteria. Rolapp’s members make up most of the field, and while they play for a hefty purse, the PGA Tour does not receive any of the millions generated by the Masters each year. This is unlikely to ever change.
Augusta National leadership will listen politely to the PGA Tour’s overtures and equally politely pass on whatever it envisions. Simply stated, the Masters is bigger than the PGA Tour.
Then consider the Open Championship. Pretty much the same circumstances exist. The Open is owned and operated by the R&A. It too generates massive television rights fees, significant on-site ticket revenue and substantial merchandise sales revenue, but not a dime finds its way to Ponte Vedra Beach, Florida, even though much of the field is made up of card-carrying PGA Tour members.
The U.S. Open? It is organized by the USGA, a non-profit organization that, along with the R&A, governs the game. It has its own qualifying policies in place, but at the end of the day, it is usually a PGA Tour member who takes home the trophy. The U.S. Open takes in many millions of dollars that fund just about everything else the USGA does each year. Again, the PGA Tour is not participating in any U.S. Open revenue streams.
The picture at the PGA Championship is virtually the same. Gobs of television revenue from around the world, usually a PGA Tour winner, and the tour stands by and receives nothing as its members compete for a healthy paycheck.
The Ryder Cup
Naomi Baker, Getty Images
The Ryder Cup is slightly different. It is jointly owned by the DP World Tour (via an entity called Ryder Cup Europe) and the PGA of America. When the Ryder Cup is played in Europe, Ryder Cup Europe keeps all the profit, but it is required to share it with its partners: the PGA of Great Britain and Ireland (20 percent) and the Confederation of Professional Golf, an association of national PGAs from Europe and other parts of the world (20 percent).
In addition to some fees for the use of ShotLink and for producing the Ryder Cup website, the PGA Tour receives 20 percent of the American media rights fees associated with the Ryder Cup regardless of where it is played. This is the only meaningful revenue stream that comes to the PGA Tour from these five events.
This all likely seems very foreign to Rolapp given his NFL pedigree. In effect, these other organizations are using PGA Tour players to generate significant revenue, and the tour does not receive much in return, other than healthy purses for its members.
These arrangements help explain the speculation that was rampant for a while last year that the tour wants to own at least a portion of the Ryder Cup or it would merge with or acquire the PGA of America. Neither scenario has occurred to date. Neither scenario is completely off the table.
There is a viable path for the tour to acquire a piece of the Ryder Cup that Rolapp hinted at in his Players week news conference.
The PGA Tour and the DP World Tour entered into a 13-year operational joint-venture partnership in June 2022, expanding on the strategic alliance that had been announced two years earlier. There are many moving parts to it, including the PGA Tour’s now 40 percent ownership stake in European Tour Productions, the DP World Tour’s television production arm, as well as the PGA Tour’s willingness to subsidize DP World Tour tournament purses. When asked his feelings about this partnership at the news conference, Rolapp indicated that he valued it, which he reaffirmed on a DP World Tour board call last week.
The situation with the majors and the Ryder Cup has taken on new urgency now that PGA Tour members own equity in the organization. Scottie Scheffler winning a major is good for his bank account and for his résumé, but it does not enhance the equity value of the tour at all.
To that end, he has made an offer to extend the partnership ahead of a 2027 opt-out opportunity. Revisiting the agreement could include an option to purchase part of the DP World Tour’s interest in Ryder Cup Europe. Were that to come about, the PGA of America might consider an opportunity to sell a portion of its ownership in the Ryder Cup as well. Such a sale could enable both sellers to reap significant cash infusions.
It also has become a more pressing issue since the tour’s 2024 launch of the for-profit PGA Tour Enterprises with a $1.5 billion investment from the Strategic Sports Group. Like Rolapp, this investor group does not come from golf, and I suspect there is some head scratching going on in the tour boardroom. The investors must be asking, “Really… this is how things work in professional golf?”
The answer is yes; it has worked like this dating back to the Deane Beman era, when the majors got along just fine with the PGA Tour. Collegiality and collaboration were the keys to mutual benefit and success for several decades. Those two bedrock principles enabled PGA Tour commissioner Jay Monahan to deftly steer professional golf through the COVID-19 period of 2020-2021.
Now, the tour would like to add the word “contribution” to the mix. In other words, how does the tour receive a profit contribution for providing the talent to the men’s majors? How does the tour benefit more given the immense value it adds to these events by member participation?
The investors are likely being spurred on by a cadre of players who feel that the majors are rolling in so much cash that they ought to significantly hike the purses. For some players, enough is never enough when it comes to compensation. The empty threat of not playing in a major unless the purse is trebled would almost be conduct unbecoming if it weren’t so laughable.
Where do the entitled set of tour players think that money is going to come from? Yes, the USGA and the R&A have significant cash on the balance sheet. But part of their mission is to conduct national amateur championships. Those are expensive, non-cash-generating events. Are they to be sacrificed to line the pockets of already well-off professional players? Ask three-time U.S. Junior Amateur champion Tiger Woods how he might feel about scrapping that championship to fund a purse increase for the U.S. Open.
The winds of change have been blowing through the tour’s Global Home ever since LIV Golf first appeared on the worldwide golf scene. These winds will keep blowing for the foreseeable future. It will be fascinating to watch how Rolapp tries to compel the majors to compensate the tour for its players’ participation in the years to come, and how he is able to manage player compensation expectations.
Top: Winners of the Open Championship are engraved on the Claret Jug.
Patrick Smith, R&A via Getty Images
