How Would You Structure PGA Tour Payouts?

[iacas]

I agree with Phil, Rory, and some others who say that the bottom players make too much compared to the top players. Pat Perez is outspoken, and while their careers don't overlap entirely, here are some stats:

Phil Mickelson

• Turned Pro 1992 (30 years)
• 45 wins
• 6 majors
• 197 top 10s
• $95M career earnings

Pat Perez

• Turned Pro 1997 (25 years)
• 3 wins
• 0 majors
• 64 top 10s
• $28M career earnings

I think when the #100 guy in the earnings makes $1.3M and Jon Rahm makes $7.8M, the gap should be bigger.

So, this topic is to discuss your ideas for how you would re-structure tournament payouts, the all-exempt list (top 125), etc. For reference, here are the current payouts.

PGA Tour purse payout percentages and distribution

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The PGA Tour has a standard formula for payout percentages and distribution of its purse and prize money for almost every event.

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Here's what I'd do, off the top of my head.

• Eligible players for the week (again off the top of my head, almost everyone except sponsor's exemptions) gets $2500 to $7500 depending on some things (haven't quite sorted this out yet, including whether they have to play in the pro-am). This covers expenses and signifies that you've made the PGA Tour and qualified, etc. If you're in any other top league, you earn a guaranteed salary. Golf can add a little bit of that, too. This money comes from the PGA Tour's pension plan, which has gotten FAT as heck. This money does not count toward year-end status or as official earnings. There may be tax status implications here, though.
• Currently the top ten make ~60% of the money. Shift this to 75% as such: 1: 20%, 2: 11%, 3: 9%, 4: 8%… 10: 2%. Take that down to about 0.1% (currently 0.215%, which means the guy who barely made the cut and finished last earns $26,875 in a $12.5M purse event).

That's all I have for now.

[saevel25]

  On 3/2/2022 at 5:37 PM, iacas said:

Eligible players for the week (again off the top of my head, almost everyone except sponsor's exemptions) gets $2500 to $7500 depending on some things (haven't quite sorted this out yet, including whether they have to play in the pro-am). This covers expenses and signifies that you've made the PGA Tour and qualified, etc. If you're in any other top league, you earn a guaranteed salary. Golf can add a little bit of that, too. This money comes from the PGA Tour's pension plan, which has gotten FAT as heck. This money does not count toward year-end status or as official earnings. There may be tax status implications here, though.

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My immediate thought was like, you get like $7500 for just playing in a tournament. So, if you play in 15 tournaments a year, you get $112,500 per year. 

 

[iacas]

  On 3/2/2022 at 6:12 PM, saevel25 said:

My immediate thought was like, you get like $7500 for just playing in a tournament. So, if you play in 15 tournaments a year, you get $112,500 per year.

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But that's only true if you're required to play in pro-ams (for example, which are more of the top guys), and it still barely covers your costs to get there.

In no other real top-level $1.5B-revenue league or whatever can players LOSE money.

I'm kinda with Pat Perez on that. I don't think $250k for the year is right, but something seems "okay."

[Big C]

If the premise is that the top golfers should make more, isn't that what the PIP is intended to remedy? I would suggest flattening out the purse for that (i.e. payout 20 guys instead of 10) before changing the payout structure for tour events.

Last year, the number 200 player on the money list pulled in $175,000. Once you factor in caddie payments and travel expenses, he's probably looking at just over $100k in taxable income. 

If you assume there are close to 1,000 guys that are attempting to make a living as touring pros at any given time, I think it's fair to say that less than 30% are actually pulling in a living wage. 

It's easy to point to someone like Pat Perez as a reason the system is broken, but I guess I disagree with the premise. Pat Perez is in the top .00001% of golfers worldwide and probably the top 10% of touring pros for most of his career. He has been solid and steady for a long time. 64 top tens is nothing to sneeze at. The guy is damn good and his $1.1 million dollar annual salary doesn't strike me as unreasonable or in need of fixing.

 

Edited March 2, 2022 by Big C

[iacas]

  On 3/2/2022 at 7:35 PM, Big C said:

If the premise is that the top golfers should make more, isn't that what the PIP is intended to remedy?

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I mean, kinda, but it's still not rewarding PLAY, it's rewarding "impact." Hence Tiger hit 0 shots in 2021, but won. And Collin Morikawa finished 11th and got $0.

So, no, it doesn't remedy that, really.

  On 3/2/2022 at 7:35 PM, Big C said:

I would suggest flattening out the purse for that (i.e. payout 20 guys instead of 10) before changing the payout structure for tour event.

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PIP ≠ actual player on-course performance.

  On 3/2/2022 at 7:35 PM, Big C said:

Pat Perez is in the top .00001% of golfers worldwide and probably the top 10% of touring pros for most of his career.

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And he should make some money, but the top guys should make quite a bit more, and that money has to come from somewhere. So unless you have a way of just adding money to the top, your plan doesn't do much to shift the balance of $ paid out.

[turtleback]

  On 3/2/2022 at 5:37 PM, iacas said:

I agree with Phil, Rory, and some others who say that the bottom players make too much compared to the top players. Pat Perez is outspoken, and while their careers don't overlap entirely, here are some stats:

Phil Mickelson

• Turned Pro 1992 (30 years)
• 45 wins
• 6 majors
• 197 top 10s
• $95M career earnings

Pat Perez

• Turned Pro 1997 (25 years)
• 3 wins
• 0 majors
• 64 top 10s
• $28M career earnings

I think when the #100 guy in the earnings makes $1.3M and Jon Rahm makes $7.8M, the gap should be bigger.

So, this topic is to discuss your ideas for how you would re-structure tournament payouts, the all-exempt list (top 125), etc. For reference, here are the current payouts.

PGA Tour purse payout percentages and distribution

---

The PGA Tour has a standard formula for payout percentages and distribution of its purse and prize money for almost every event.

---

Here's what I'd do, off the top of my head.

• Eligible players for the week (again off the top of my head, almost everyone except sponsor's exemptions) gets $2500 to $7500 depending on some things (haven't quite sorted this out yet, including whether they have to play in the pro-am). This covers expenses and signifies that you've made the PGA Tour and qualified, etc. If you're in any other top league, you earn a guaranteed salary. Golf can add a little bit of that, too. This money comes from the PGA Tour's pension plan, which has gotten FAT as heck. This money does not count toward year-end status or as official earnings. There may be tax status implications here, though.
• Currently the top ten make ~60% of the money. Shift this to 75% as such: 1: 20%, 2: 11%, 3: 9%, 4: 8%… 10: 2%. Take that down to about 0.1% (currently 0.215%, which means the guy who barely made the cut and finished last earns $26,875 in a $12.5M purse event).

That's all I have for now.

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I like the basic structure, but I would increase the winner's percentage to something closer to 25% and I would reduce the 125 exemptions to 90 or 100.  I'm old enough to remember when there were only 60 exempt player and the winner got 20%.  I think the 60 number is too low, but the current 125 is too many.

We can't really backtest a reduction in the number of exempt player, but the prize fund distribution can be backtested.  Not for every year, but say every 5 years starting in 1996 when the current era really began.  Say, 1996, 2001, 2006, 2011, 2016, and 2021.  That covers a representative selection of years, with varying levels of domination.  And maybe throw in 200 for a hoot.

[iacas]

  On 3/2/2022 at 8:04 PM, turtleback said:

and I would reduce the 125 exemptions to 90 or 100. 

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Oh yes, I meant to do that too.

[imsys0042]

I like everything that is being discussed.   I like the idea of something to cover basic expenses for the newbies and people who are starting out, or maybe have had a dry spell.  I also like the idea of concentrating money near the top more because this is a sport and people should be grinding and playing their hardest to win.  

I don't want to rag on Pat Perez at all, but if we are using him as an example then what are his stats for top-3, top-5 and top-10/20?   I see for the majors that he has one top-10 in majors (T6) for his career.  I'm sure he works hard to keep his game up to make the cuts that he has, but he could be an example of flooding so much money into the Tour that you don't have to work that hard for it.

Something that can skew the thinking is that the amount of money that is there is astronomical.  There's almost virtually no way to prevent the problem of paying tons for mediocrity when there is this much money.   It's like Marvel movie money.   They throw bags of money at voice actors for a days work, simply because the budgets are so large.

[SG11118]

I would give first place more - maybe up to 25% of purse.  I would give MCers at least $5K a week to cover their expenses for the week, and give their caddies something - probably more than $5K in the weeks where there are pro-am responsibilities on them that raise money for the tour and tour charities.  I would pay for the extra costs to 1st and MCers by giving 2nd-50th place finishers less percentage of the purse.  51-65 are probably about right as is.

They currently award the top 125 with a card for the next season along with 25 KF cards and 25 playdown cards from the KF and 126-200 series events.  That leaves 175 main cards plus maybe another 50 medical exceptions with active cards.  This works fine for the big money events where there is demand to play in the event and the 132, 144, or 156 field can be filled by those with cards.  It would be nice to figure out what can be done differently on the 2nd and 3rd tier events where they can't fill the field with cardholders.  Way too many lingerers on - who aren't very good currently, but were good players 5-25 years ago get into these fields due to some past priority status.  Figure out a way to offer the open spots in these fields to the top players on the KF Tour rather than to has-beens.  If a has-been wants to keep playing, they have to go down to the KF Tour and play their way back on to the big tour.  If a KF Tour player wants to play in PGA Tour events, they need to weigh whether they are willing to pass on the opportunity to play in a KF Tour event to cement their status vs the opportunity to play on the bigger stage for the week.

 

[Ty_Webb]

I would say the thing is you have people who have put everything into the game and worked really hard to get there. The top level of the game is so competitive now that I think someone who's retaining their card should be making quite a lot of money. In baseball for example, the salary minimum for 2021 was 570,500. There's 750 players on the 25 man rosters, so that's way more than the top 125 on the PGA tour and it's guaranteed. Kevin Stadler had 21 starts last year and won $32,000.

In the business world, if you're top 125 in the world, you're making a metric f***ton more than $1 million a year. Add longevity to that and I think if you slant the money too far to the top you'll actually make the standard worse because the PGA tour will be less tempting. Can you imagine being 15 years old in 2000 and knowing that if you make it you'll be playing against Tiger Woods and you'll have to win some to put food on the table. 

Next problem, what do you do about the Korn Ferry Tour? Do you think it's reasonable that top 10 on the KFT is better than 125th on the PGA tour? If 125th is shaved by let's say 25%, it's only $750k (Molinari won $997,000 last year for 125th place). 10th on KFT last year was $422k. Bump that up similarly and they're close. 1st was 758k. 

I'd also add that Pat Perez has maintained his playing privileges for a long time. I don't begrudge him earning just over a million a year for 25 years. Phil's made orders of magnitude more money than Perez has in other ways - sponsorship deals etc. 

The one thing I might think about changing is the number of exempt players. Make that 90 and have the FedEx for the top 90 players plus top 10 KFT and then 91-150 go into something similar with 11-50 on the KFT. Those 100 in the FedEx have PGA tour status following year and the top 50 from the KFT finals get the same. Bottom 50 plus 51-100 get KFT status and 50 from Q school get KFT status. Or whatever those numbers actually need to be to make it work.

[cedrictheo]

To those of you who like the idea of reducing the number of exempt cards… why is 125 too many? 

[iacas]

  On 3/2/2022 at 11:19 PM, Ty_Webb said:

In baseball for example, the salary minimum for 2021 was 570,500. There's 750 players on the 25 man rosters, so that's way more than the top 125 on the PGA tour and it's guaranteed.

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MLB had revenues of over $10B.

  On 3/2/2022 at 11:19 PM, Ty_Webb said:

In the business world, if you're top 125 in the world, you're making a metric f***ton more than $1 million a year.

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Businesses make a metric f***ton more "$B" than the PGA Tour.

  On 3/2/2022 at 11:19 PM, Ty_Webb said:

Add longevity to that and I think if you slant the money too far to the top you'll actually make the standard worse because the PGA tour will be less tempting. Can you imagine being 15 years old in 2000 and knowing that if you make it you'll be playing against Tiger Woods and you'll have to win some to put food on the table.

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I don't think any of the suggestions do that. Plus they're making maybe $100k just playing 22 events to cover expenses. If they can't earn on top of that, they don't deserve to make that much.

  On 3/2/2022 at 11:19 PM, Ty_Webb said:

I'd also add that Pat Perez has maintained his playing privileges for a long time. I don't begrudge him earning just over a million a year for 25 years. Phil's made orders of magnitude more money than Perez has in other ways - sponsorship deals etc.

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This is about payouts, not how marketable you are. That Phil makes Steph Curry still makes a lot of money… PLUS he gets his marketing revenue. It's not held against him in salary talks.

  On 3/2/2022 at 11:57 PM, cedrictheo said:

To those of you who like the idea of reducing the number of exempt cards… why is 125 too many? 

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Because it leads to too many people "hanging on" too long, IMO.

[iacas]

Shit, look:

The PGA Tour Will Pay $50K to Every Pro Who Plays 15 Events

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The PGA Tour's “Play 15" bonus program will pay $50,000 to any member who competes in at least 15 tournaments — which is pretty much everyone in the top 150.

I didn't know about that!

[boogielicious]

  On 3/3/2022 at 12:29 AM, iacas said:

Shit, look:

The PGA Tour Will Pay $50K to Every Pro Who Plays 15 Events

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The PGA Tour's “Play 15" bonus program will pay $50,000 to any member who competes in at least 15 tournaments — which is pretty much everyone in the top 150.

I didn't know about that!

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Isn’t that in the Participation Trophy realm now?

[iacas]

  On 3/3/2022 at 11:45 AM, boogielicious said:

Isn’t that in the Participation Trophy realm now?

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No.

[saevel25]

Businesses routinely pay employees for travel expenses. 

PGA Tour is requiring golfers to go across the globe. That is not cheap. 

Last year, there was 27 golfers who made under $50K in earnings from tournaments. This was out of 250 golfers who earned money. 90% of golfers made more than that $50K. 

I honestly, wouldn't mind seeing a baseline salary for the players. Only 37 players made less than $100K in earnings from tournaments. 

Is 100K a good baseline? That would cover the bottom 15% of those who made earnings. 

 

[Carl3]

  On 3/3/2022 at 2:46 PM, saevel25 said:

Businesses routinely pay employees for travel expenses. 

 

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So if more of the winnings get pushed up towards the top as some in this thread suggests then perhaps there can be a safety net for the new talent trying to break in.

I like the thought of the tour covering base travel expenses perhaps for those with low earnings and net worth. The ones early in their career. Coach travel for them and a caddy. Not a charter or bussiness class. Making the transition from college and/or KF tour could be hard for some. Also like a public defender for those who can't pay for an attorney, maybe the newer/low net worth players can apply for a caddy allowance?

 

[SG11118]

  On 3/3/2022 at 12:29 AM, iacas said:

Shit, look:

The PGA Tour Will Pay $50K to Every Pro Who Plays 15 Events

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The PGA Tour's “Play 15" bonus program will pay $50,000 to any member who competes in at least 15 tournaments — which is pretty much everyone in the top 150.

I didn't know about that!

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I didn't either.  I like it as a way to give the guys a base income.  It probably would make sense for them to look at having a higher tier to for guys who play more than 25-30 rounds.  Give some of these players incentive to play in events to increase the quality of the fields.  

Looking at 2021 there were 207 golfers who played in at least 15 events.  Looking at this list there were probably 5-7 guys who technically did not have a card, but still had enough status that could get into 15+ events, who wouldn't have been eligible for the bonus.  So you are probably looking at 200 guys a year.  There were 36 guys at 30+ events.  There were ~125 cardmembers at 25+.

This past weekend, the PGA had the limited field Arnold Palmer event, so to give their cardmembers a chance to play in an event they had a second event in Puerto Rico.  This provided 240 spots for the approximately 225 healthy card members.  Only 108 of 120 and 57 of 120 were card members.  165 of the ~225 healthy card members played.  That is a lot of spots (75) open to mediocre golfers.