I watched a few minutes of this summer’s Senate hearing investigating the proposed combination of the PGA Tour and LIV Golf. The parties repeatedly referred to the tour's “990.”
Every tax-exempt organization must file an annual return identified as IRS Form 990. An employee-benefits attorney, I have examined a number of them over the years, mostly forms 990P for tax-qualified retirement plans (I always assumed that the “P” referred to “pension”). Those forms are available to the public.
So, I thought I’d examine the PGA Tour’s Form 990 and exhibits (49 pages!). The most recent Form 990 available online covered calendar year 2021 and can be found here.
In the final analysis, the tour paid 2.8 percent of its receipts to charity and, in one form or another, 14 percent of its receipts to itself.
In all public statements, interviews and written articles, the tour emphasizes the “large amount” that it raises for charity. During the hearing, its representatives repeatedly returned to that chant.
During 2021, the tour paid $43.7 million to charity, a significant sum.
Its revenue totaled almost $1.6 billion (that’s billion); so, 2.8 percent of the tour’s receipts went to charity.
At the same time, it paid its executives and employees $181 million – four times the amount going to charity – to administer the tour, not the PGA of America in its entirety or the larger USGA, but only the tour.
It also reported an operating excess of $33.4 million – in effect, a profit – which the tour added to its investments of $1.25 billion.
That does not include the hundreds of millions paid to the golfers individually as prize money or other rewards, an amount lost in the $1.3 billion category of “other expenses.”
The compensation total included:
● $8.4 million (plus $5.5 million from related sources) paid to its commissioner, Jay Monahan;
● $3.1 million (plus $6.1 million from related sources) paid to its chief operating officer, Ronald Price (who appeared in the televised hearing);
● payments greater than $1 million to 11 other individuals;
● payments of substantial amounts to golfers Jordan Spieth, Kevin Kisner, James Hahn and Charley Hoffman, who sit on its Board of Directors.
The tour claims its tax-favored status pursuant to subsection 501(c)(6) of the Internal Revenue Code, exempting trade associations from income taxation. Its 990 declares that the tour seeks to “promote the sport of professional golf and the common interests of touring golf professionals.” I guess it does that.
The tour’s tax exemption saved it $263 million in federal income taxes (at today’s corporate tax rate) on its $1.25 billion of accumulated “profits.” If the tour paid those taxes, the federal debt would equal more than a quarter of a billion dollars less than it does today or the rest of us could have paid over a quarter of a billion dollars less in our own income taxes.
The tour, in fact, raises money for charities by providing the players who compete in the weekly tour events (run by local organizations which, in turn, donate a portion of their proceeds to charity).
For our purposes, the RBC Heritage Classic, one of the tour's most successful tournaments and now labeled a “signature event” for the FedEx Cup, can exemplify the individual tournaments’ relationship to charities. Its promoters boast that the Heritage generated $51 million for charity since 1987 and that the 2024 purse will equal $20 million, an amount which likely will increase in subsequent years. Restated, it means that, in three years, the tournament will pay at least $9 million more to the golfers than it paid to charities in 36 years!
For some reason, this information sickens me, but what do I do? My wife and I will continue watching golf on TV, cheering Steve Stricker, et al., and occasionally will attend a tournament in person. For more than 20 years, we were among the thousands of suckers who volunteered to work at tour events – for free! Not to mention the myriad ways our purchases and payments, at least indirectly, add to the tour's $1.6 billion in revenue.
Will the exposure attendant to the tour’s accommodation of LIV induce a public outcry and the tour’s loss of stature and respect, a change in its ways or relinquishment of its tax-exempt status? I doubt it.
Those truly important to our society – teachers, nurses and certain other health-care workers, police and firefighters and a long list of others – often struggle with modest incomes while a collection, admittedly an elite collection, of those who play a game, golf, and their hangers-on reap millions.
We live in a crazy world!
Donald J. Christl
Bonita Springs, Florida
I wonder if the hat incident at the Ryder Cup has had a bigger effect on Rory McIlroy than people realize. Think about the two major announcements he made shortly after Rome: He was resigning from the PGA Tour Policy Board, and in a few years he's moving back to Europe (“McIlroy shines brightly as protagonist of the year,” December 1 GGP+).
McIlroy spent the better part of 2023 being the player point on LIV. He and Tiger Woods orchestrated the plan to use LIV as a bargaining chip to dramatically increase the potential wealth for the elite players on the PGA Tour. McIlroy is correct in that these outside activities probably affected his play. He probably put in far more time and energy on those issues than any other active player.
Then came Saturday afternoon in Rome. Not a single member of the U.S. team came to his defense in the dispute with Patrick Cantlay’s caddie, Joe LaCava. They said things like “Joe didn't mean anything” and “Joe's a good guy,” but no one said McIlroy had a point. And the U.S. team was made up of 12 elite players, players whom Rory went to bat for with LIV and the tour.
Maybe McIlroy now sees these elite tour players not as friends, but business associates. He saw the way Shane Lowry and other European team members supported him. Maybe he sees the Europeans as his real friends.
I don't know how the PGA Tour and LIV will come together. But whatever happens, I suspect the DP World Tour will benefit. Connect the dots: The DP World Tour gets richer, McIlroy will live in the U.K. and play a significant amount on the DP World Tour, which owns 60 percent of the Ryder Cup in Europe, and McIlroy is all in on the Ryder Cup.
Maybe pick up where Seve left off?
Charlie Jurgonis
Fairfax, Virginia
It was so nice hearing from the Marxist in St. Paul, lecturing us on golf’s future by quoting this beauty: “Revolutions are the locomotive of history,” by none other than Karl Marx himself (“It’s Your Honor,” November 20 GGP).
Who is Blaine Walker to tell those of us who love the history and tradition of the game that we are wrong? Good grief, don’t we have enough of Marxism’s long march through the institutions going on elsewhere? Do we now have to acquiesce to even more insanity when we go to the golf course for some peace and quiet among the leaves?
And I speak as a public-course player, not a stuffy, elitist, private-club snob.
Ron Garland
Prescott Valley, Arizona
I enjoyed reading Blaine Walker’s comments (“It’s Your Honor,” November 20 GGP). A bit too dramatic at times for me, but otherwise he’s spot-on.
It’s naive to ignore change, and the game we love is not doing itself a favor by fighting it tooth and nail. There is room for everyone here. Pick the venue that pleases you and go enjoy.
There’s no right or wrong here, only opinions.
John Gardner
Fort Myers, Florida
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