Jay Monahan at the 2022 Presidents Cup. | Photo by Brian Spurlock/Getty Images
The 2022 PGA Tour season experienced LIV Golf’s rise and the ensuing chaos, but it also saw increased salaries and legal fees.
No wonder the PGA Tour finally held talks with the Saudi Public Investment Fund (PIF).
The PIF, which reportedly has $700 billion in assets, was bleeding the PGA Tour dry. It launched LIV Golf in the spring of 2022—the week before the U.S. Open—and lured away dozens of major champions.
Numerous litigations followed as each side sued the other, citing antitrust violations, among other things. Players on both sides of the aisle became involved, too.
The PGA Tour’s legal fees thus increased exponentially, according to a report from Sportico.
In 2021, the PGA Tour hired legal counsel, which cost them $2 million. The following year, that number jumped almost tenfold, soaring to $20.7 million in 2022, per tax returns obtained by Sportico.
At the same time, PGA Tour Commissioner Jay Monahan saw his salary increase to $18.6 million, up from $13.9 million in 2021. His 2022 base salary is listed at $1.8 million. Still, when including bonuses, additional compensation, and non-cash benefits, that total equates to $18.6 million.
Photo by Kevin C. Cox/Getty Images
Jay Monahan poses with the winner of the 2023 Tour Championship, Viktor Hovland.
On top of this, to respond to the threat of LIV Golf, the PGA Tour increased purse sizes by $100 million in 2023 compared to 2022. They hoped this would satisfy its top players and keep them from joining LIV Golf.
The Tour also created the Player Impact Program (PIP), designed to compensate the most popular players through a formula incorporating media rights, social media views, and other metrics.
This year, the PIP paid the top 20 players $100 million, with Rory McIlroy taking home $15 million. McIlroy finished first in the rankings, while Tiger Woods received $10 million for coming in second.
But all of this spending is unsustainable.
And since the Tour’s assets dwarf that of the PIF, they had no choice but to approach LIV Golf’s benefactors.
In 2022, the PGA Tour reportedly had $1.9 billion in revenue while spending $1.87 billion.
Meanwhile, the PIF has spent over $1 billion in creating LIV Golf and recently spent north of $400 million to acquire Jon Rahm.
Money is not an issue for Saudi Arabia’s sovereign wealth fund.
But money is an issue for the PGA Tour, which explains the most critical provision stemming from the Jun. 6, 2023, framework agreement: the two sides dropped all lawsuits. That saved the PGA Tour millions of dollars, thus allowing itself to invest in its players while buying time to negotiate with the PIF to unite professional golf.
Photo by David Cannon/Getty Images
Rory McIlroy, one of the faces of the PGA Tour.
Yet, two days after this agreement became public, which shocked the golfing world, Monahan revealed to his employees that the PGA Tour had spent upwards of $50 million on legal fees.
“We cannot compete with a foreign government with unlimited money,” Monahan said, per The Wall Street Journal.
“This was the time… We waited to be in the strongest possible position to get this deal in place.”
Of course, the Sportico report does not include numbers from the spring of 2023, when the PGA Tour’s war with LIV Golf raged on. But it makes sense that the Tour spent roughly $50 million in legal fees during this entire saga.
Thankfully, the Tour does not have to worry about fighting LIV Golf in court, at least for now.
What it should be worrying about, however, is finalizing an agreement with the PIF ahead of the self-imposed Dec. 31, 2023 deadline.
Because these financial numbers tell us one thing: the PGA Tour cannot compete with the PIF. And if they cannot strike a deal with the PIF, LIV Golf’s beneficiary will continue to bleed the Tour dry, threatening its legacy, status, and future, thus completely changing the direction of professional golf for good.
So, if Monahan can avoid that and strike a deal successfully, he surely will receive a handy pay raise in 2024.
Jack Milko is a golf staff writer for SB Nation’s Playing Through. You can follow him on Twitter @jack_milko for more golf coverage. Be sure to check out @_PlayingThrough too.
