Mike Whan's Take on Purse Equality for LPGA/PGA Tours

[jmanbooyaa]

The LPGA has an uphill battle. Before they can raise the purses they need to put a product out that sponsors are going to want to add dollars behind. I think it was @iacas mentioned Wie. That is a prime example of the LPGA struggles. She had all the qualities to move the needle and get higher pay per tourny. Unfortunately she did underachieve and was not able to do this. Paula Creamer is another example only in the US however. 

[ChetlovesMer]

57 minutes ago, jmanbooyaa said:

The LPGA has an uphill battle. Before they can raise the purses they need to put a product out that sponsors are going to want to add dollars behind. I think it was @iacas mentioned Wie. That is a prime example of the LPGA struggles. She had all the qualities to move the needle and get higher pay per tourny. Unfortunately she did underachieve and was not able to do this. Paula Creamer is another example only in the US however. 

That's a good point. 

The LPGA really lacks for a superstar right now. Sure there are good players. But I don't see anyone who has that "it" factor to really move the needle. 
I just don't see the Korda Sisters becoming golf's version of the Williams Sisters. 

[Darkfrog]

Not making an argument here, but this is more of a philosophical line of thought.

Why does purse equality between men and women need to be coupled to revenue/profit?

Couldn't the USGA, or R&A simply make the purses for their majors equal?

Couldn't the LPGA pursue sponsors that are willing to pay more and not get a 1:1 return on the marketing for the sake of promoting the brand in other ways?

This line of thought came into my head thinking about places I have worked. Many of the companies I have worked for have executive boards filled with middle aged, white, European men (most of my employers have been Europe based global companies). In the last 10 years or so, they have made an effort to change this, partially by intentionally advancing more women and minorities into leadership positions. The concept being to develop more female and minority leaders in the long term and eventually change the makeup of executive boards.

So maybe purse equality requires some sacrifice/affirmative action. Not sure how or when that happens, and I voted for the 25+ years, because I think there is a lot to overcome, in spite of Mike Whan's optimism.

[iacas]

8 hours ago, chspeed said:

I doubt the LPGA has the cash to do this. I think it's very hard, but not impossible. Maybe you can convince the USGA (for their events) to split the purses fairly (or at least give more to women's events than they get now). It's a matter of getting the ball rolling. I'm sure that the LPGA has been trying to figure this out for years.

Why should the USGA offer $7M more than they do now, more than doubling the purse size ($5.5M) to $12.5M, when they're already offering the largest payout in golf?

This is old but the USGA was over $1M ahead of second place in 2018, and it's gone up to $5.5M I believe:

Ranking LPGA Tour tournament purses from biggest to smallest

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Which LPGA Tour events have the biggest and smallest purses? We look at the full 2018 LPGA Tour season, ranking from most money to least.

5 hours ago, Darkfrog said:

Why does purse equality between men and women need to be coupled to revenue/profit?

Couldn't the USGA, or R&A simply make the purses for their majors equal?

Sure, of course, and a company could decide to lose a bunch of money and offer an equal sized purse for a regular LPGA Tour event, but why would/should they?

Is the $7M the USGA would have to spend to make the women's U.S. Open purse the same size as the men's not perhaps better spent on girl's youth programs, turf grass research for lower-water strains of grass, etc.?

Just because the USGA is a non-profit doesn't mean they can just spend their money however they want.

5 hours ago, Darkfrog said:

Couldn't the LPGA pursue sponsors that are willing to pay more and not get a 1:1 return on the marketing for the sake of promoting the brand in other ways?

What "other ways"?

5 hours ago, Darkfrog said:

The concept being to develop more female and minority leaders in the long term and eventually change the makeup of executive boards.

Those people are still doing a job, offering returns and value for their work. There's a difference between an artificial glass ceiling and the USGA just lighting $7M on fire that could be better spent elsewhere (in their opinion).

[Big C]

5 hours ago, Darkfrog said:

 

Couldn't the LPGA pursue sponsors that are willing to pay more and not get a 1:1 return on the marketing for the sake of promoting the brand in other ways?

When it comes to marketing, do "other ways" really exist?

Sponsors are essentially paying for two things - goodwill and name recognition. You can argue that inflating the purse artificially might increase good will (aka: "CME doubles their purse in a dramatic statement about gender equality"), but even so, there would come a point where pumping additional dollars into the purse would have no marginal benefits in terms of the goodwill created. 

And I'm pretty sure that point would come well before purse sizes would match those on the PGA Tour. 

So at that point, what else could you call it but a charitable donation? And I'm pretty sure if I'm a CMO in charge of a marketing budget, I can think of a lot more worthy recipients for my donation dollars than golfers that are already raking in 6 or 7 figures annually.

[Darkfrog]

46 minutes ago, iacas said:

Sure, of course, and a company could decide to lose a bunch of money and offer an equal sized purse for a regular LPGA Tour event, but why would/should they?

 

53 minutes ago, iacas said:

What "other ways"?

7 minutes ago, Big C said:

When it comes to marketing, do "other ways" really exist?

Well, I guess the LPGA would have to have a really good pitch person that could sell the sponsor on the vision, and what the extra cost for a higher purse might achieve in the long term for that sponsor. Honestly, I don't have a great answer, and I am just questioning if the immediate financial return on sponsorship is the only thing that creates value for the sponsor. Maybe the sponsor decides that the additional cost to provide a higher purse is aligned with their company values or something, and then uses that to promote the brand outside of golf sponsorship.

Like I said in my post, I'm no making an argument for/against equal purses, or the reasons why/why not it could happen. Just trying to figure out if there some nuance to it aside from TV viewership demographics.

[GolfLug]

All affirmative action towards battling inequality has an underlying assumption/expectation of the benefactor creating equal value. 

I understand that a boost can possibly help in creating the value and subsequent increase in purses, but approaching this from an angle of gender inequality and random Twitter scolding from from folks like Brennan seems to be misplaced. 

Having said that, I love watching LPGA, and find it to have lot of exciting fun players. They can get there in 10 years I think.

Edited February 23, 2021 by GolfLug

[Big C]

7 minutes ago, Darkfrog said:

 

Honestly, I don't have a great answer, and I am just questioning if the immediate financial return on sponsorship is the only thing that creates value for the sponsor. Maybe the sponsor decides that the additional cost to provide a higher purse is aligned with their company values or something, and then uses that to promote the brand outside of golf sponsorship.

 

Immediate? No. But Immediate and long term? Yes, I think that is the only consideration to a sponsorship. 

I would be careful about conflating sponsorships with charitable works and donations. If a company decided that equal purses sizes between men and women was more aligned with their company values than serving the underprivileged in their community (or something similar), I would have serious doubts about that company's judgement.

[chspeed]

7 hours ago, Darkfrog said:

Many of the companies I have worked for have executive boards filled with middle aged, white, European men (most of my employers have been Europe based global companies). In the last 10 years or so, they have made an effort to change this, partially by intentionally advancing more women and minorities into leadership positions. The concept being to develop more female and minority leaders in the long term and eventually change the makeup of executive boards.

This is a great point. The decision makers at Fortune 500 companies are driven by more than just company profit.

 

1 hour ago, iacas said:

Sure, of course, and a company could decide to lose a bunch of money and offer an equal sized purse for a regular LPGA Tour event, but why would/should they?

Because $7M for a Fortune 500 company is a rounding error. And the publicity that can generate could have a lot more ROI than 60 seconds of a lame ad during the Superbowl.

7 hours ago, Darkfrog said:

Why does purse equality between men and women need to be coupled to revenue/profit?

I agree. It doesn't. And if it was that way in the past, it doesn't have to be in the future.

 

58 minutes ago, Big C said:

Sponsors are essentially paying for two things - goodwill and name recognition.

I'm no expert on sports sponsorships. But how do you know that? I, for one, would not be surprised is some Fortune 500 companies sponsor a golf tournament because the CEO likes golf and wants to play in pro-ams. In my opinion, most corporations are a lot less rational in their spending than it seems.

28 minutes ago, Big C said:

f a company decided that equal purses sizes between men and women was more aligned with their company values than serving the underprivileged in their community (or something similar), I would have serious doubts about that company's judgement.

OK. You're entitled to those doubts. But what if they market specifically to women athletes? (e.g. Lululemon)

Edited February 23, 2021 by chspeed

[Big C]

7 minutes ago, chspeed said:

I'm no expert on sports sponsorships. But how do you know that? I, for one, would not be surprised is some Fortune 500 companies sponsor a golf tournament because the CEO likes golf and wants to play in pro-ams. In my opinion, most corporations are a lot less rational in their spending than it seems.

A CEO that spent 7 figures worth of shareholder equity on a sponsorship because he loved golf and wanted to rub elbows in the Pro Am event would also be showing poor judgement. And would likely be setting himself up to be a short term CEO.

 

8 minutes ago, chspeed said:

OK. You're entitled to those doubts. But what if they market specifically to women athletes? (e.g. Lululemon)

Then they would have a profit motive for the decision - increasing goodwill among their targeted demographic.

[iacas]

2 minutes ago, chspeed said:

Because $7M for a Fortune 500 company is a rounding error.

I was talking about the USGA, specifically, which is not a Fortune 500 company.

And $70 is a rounding error to you, so why don't you just give $70 to every bum you see or anyone that ever asks for it?

2 minutes ago, chspeed said:

OK. You're entitled to those doubts. But what if they market specifically to women athletes? (e.g. Lululemon)

Then they really know what kind of bang for their buck they can expect to get.

You're talking about going from $5.5M to $12.5M, btw, in just the U.S. Open. That's more than doubling the current purses.

Good luck.

1 minute ago, Big C said:

A CEO that spent 7 figures worth of shareholder equity on a sponsorship because he loved golf and wanted to rub elbows in the Pro Am event would also be showing poor judgement. And would likely be setting himself up to be a short term CEO.

Yeah, this.

[Darkfrog]

21 minutes ago, Big C said:

I would be careful about conflating sponsorships with charitable works and donations.

I'm not talking about charitable causes, and I this only popped into my head today randomly thinking about some work-related policies, so it's not like I have a well fleshed out idea on this.

But for example - what if a company buys an LPGA sponsorship which includes a prize purse equal to the men's event on the same dates. The company accepts there will be a financial loss but gain of goodwill among their target audience. Then the run a separate marketing campaign focusing on equal pay for women which states that they were the first LPGA sponsor to provide a prize purse equal to the men, and maybe the marketing campaign also highlights other women's rights/equality issues the company supports too. And maybe this drives talented women to want to work at this company, and gains a bunch of new women as customers who believe in the messaging, and ultimately creates more value then the initial investments.

Again, not fleshed out, and perhaps not really viable in any circumstance, and I'm not a marketer, so perhaps this is crazy talk.

[chspeed]

2 minutes ago, Big C said:

A CEO that spent 7 figures worth of shareholder equity on a sponsorship because he loved golf and wanted to rub elbows in the Pro Am event would also be showing poor judgement. And would likely be setting himself up to be a short term CEO.

Very true. But not very unusual.

1 minute ago, Darkfrog said:

Again, not fleshed out, and perhaps not really viable in any circumstance, and I'm not a marketer, so perhaps this is crazy talk

None of this is fleshed out. And even if you were a marketer, they differ in strategy, opinion, and values. But it's a good conversation!

[iacas]

1 minute ago, Darkfrog said:

The company accepts there will be a financial loss but gain of goodwill among their target audience.

For several million dollars on top of what they'd already be spending to put on the tournament, that's got to be a helluva lot more goodwill!

Let's say it costs $4M to put on an LPGA tournament. You want them to give $9M, maybe. So they've decided that for $4M, it's worth it… what's the other $5M going to do beyond "goodwill"? They're already getting their money's worth for $4M. The $5M sounds like throwing bad money after good. That $5M would probably generate MUCH more "goodwill" by not paying LPGA Tour players more money, but putting the money into the local communities. Into the USGA/LPGA Girls Golf program. Into Tiger's foundation. Into countless other things that will generate a LOT more "goodwill" than an extra $5M on top of the $4M they're already donating.

1 minute ago, Darkfrog said:

Then the run a separate marketing campaign focusing on equal pay for women which states that they were the first LPGA sponsor to provide a prize purse equal to the men, and maybe the marketing campaign also highlights other women's rights/equality issues the company supports too.

You seem to be assuming that they'll get goodwill for that. Some people - including shareholders - might not like that much at all.

Businesses exist to make money, not to generate "goodwill."

1 minute ago, Darkfrog said:

And maybe this drives talented women to want to work at this company, and gains a bunch of new women as customers who believe in the messaging, and ultimately creates more value then the initial investments.

This is a long trail of maybes.

[chspeed]

4 minutes ago, iacas said:

And $70 is a rounding error to you, so why don't you just give $70 to every bum you see or anyone that ever asks for it?

Good one. 🙄

5 minutes ago, iacas said:

You're talking about going from $5.5M to $12.5M, btw, in just the U.S. Open. That's more than doubling the current purses.

Good luck.

I was just saying that it would be great if they could match or increase, and it might pay off. I could even see men agreeing to lower theirs if it was presented in a certain way. I appreciate the rational capitalist argument, I do, but the world doesn't always work that way. And if we want change, we can dream. And yes, it would take a lot of luck.

[iacas]

1 minute ago, chspeed said:

I was just saying that it would be great if they could match or increase, and it might pay off.

Like I just said to @Darkfrog, lotta "maybes" and "mights" here.

Some of the sponsors are already just barely making it worthwhile at maybe $4M, now you want them to spend an extra $5M on a "maybe" or a "might."

1 minute ago, chspeed said:

I could even see men agreeing to lower theirs if it was presented in a certain way.

Ha! No. Some would say it, but… no.

[ncates00]

7 minutes ago, chspeed said:

I could even see men agreeing to lower theirs if it was presented in a certain way.

🤣

17 minutes ago, Darkfrog said:

The company accepts there will be a financial loss

Maybe if they want to claim losses for tax purposes. 

 

18 minutes ago, Darkfrog said:

but gain of goodwill among their target audience.

 

18 minutes ago, Darkfrog said:

And maybe this drives talented women to want to work at this company, and gains a bunch of new women as customers who believe in the messaging, and ultimately creates more value then the initial investments.

I doubt people are going to flock to a company for a job or their product just because they paid women golfers the same as men golfers. I’d say most women golfers don’t even watch the LPGA Tour. It’s certainly a small sample size and an anecdote, but none of the female golfers I know care about women’s golf except for their own. When they watch golf, they’re watching Tiger and the guys. 

[Big C]

39 minutes ago, Darkfrog said:

I'm not talking about charitable causes, and I this only popped into my head today randomly thinking about some work-related policies, so it's not like I have a well fleshed out idea on this.

But for example - what if a company buys an LPGA sponsorship which includes a prize purse equal to the men's event on the same dates. The company accepts there will be a financial loss but gain of goodwill among their target audience. Then the run a separate marketing campaign focusing on equal pay for women which states that they were the first LPGA sponsor to provide a prize purse equal to the men, and maybe the marketing campaign also highlights other women's rights/equality issues the company supports too. And maybe this drives talented women to want to work at this company, and gains a bunch of new women as customers who believe in the messaging, and ultimately creates more value then the initial investments.

Again, not fleshed out, and perhaps not really viable in any circumstance, and I'm not a marketer, so perhaps this is crazy talk.

I kind of see where you are going with your thinking, but I just don't think it's realistic for reasons that others have mentioned. 

If you are talking about an investment that won't show returns for many years (if not decades) and one that has no real way to quantify it's success or failure, then realistically I see no way any company of size would take that plunge.