PGA Tour Faces Financial Turbulence Amidst Tumultuous Year
The PGA Tour, facing a storm of controversy and mergers, saw both its employee compensation and overall revenue shift dramatically in 2023.
The organization’s tax returns reveal a 30% surge in employee compensation, reaching a staggering $284 million. This increase primarily benefitted upper-level staff, with payouts to officers, directors, and key employees soaring by 77% to $116.4 million.
Commissioner Jay Monahan’s compensation also sparked debate, with the initial figures from the tax return showing a hefty $23 million. However, a representative for the PGA Tour clarified that this figure includes deferred compensation, and Monahan’s actual received compensation for 2023 was $14.1 million.
"As reflected above, in accordance with the disclosure requirements to Form 990, the 2023 Form 990 includes both compensation earned and received by Commissioner Monahan in 2023 ($14,136,393) and also includes estimates of amounts earned and deferred to future years by Commissioner Monahan in 2023 ($9,156,952).
Included in the deferred compensation is an actuarial estimate related to his post-retirement benefits ($2,476,952) that he is not entitled to receive until he retires, along with long-term incentive compensation ($6,680,00) that he is eligible to receive in future years. These two amounts ($9,156,952) were not cash compensation received by the Commissioner,” the spokesperson wrote.
This increase in compensation coincides with a year marked by upheaval for the PGA Tour. In 2023, the organization navigated a public and legal battle with the Saudi-backed LIV Golf tour, culminating in a surprising partnership announcement that drew sharp criticism. The backlash to this decision led to Monahan taking an unscheduled medical leave.
Adding to the complexity, the PGA Tour reported its first financial loss in years, with revenues totaling $1.828 billion, $62 million less than expenses. Previous years saw the organisation boasting eight-figure surpluses, including a $32 million surplus in 2022.
The spokesperson for the PGA Tour attributed the loss to several factors, including the absence of a Presidents Cup year, increased player purses, and ongoing legal issues with LIV Golf.
"The overall loss is a result of decreased revenues associated with 2023 being a non Presidents cup year, and certain non-recurring payments for rights and royalties, as well as increases in player compensation, and other player benefits paid by PGA TOUR, Inc. The investment write-off was the result of a restructure of corporate subsidiaries of PGA TOUR, Inc. which were inter-company in nature and did not impact free cash flow generated by the business.”
“There were outside legal costs incurred during 2023 related to ongoing PIF discussions as well as costs incurred related to the standing up of PGA TOUR Enterprises,” they added.
Despite the financial challenges, the PGA Tour remains financially strong with $1.2 billion in net assets. The organization also successfully sold part of a new commercial and licensing arm for $3 billion in January.
The PGA Tour’s turbulent 2023 leaves many questions about its future direction and stability in the evolving landscape of professional golf. While the organization has faced significant financial setbacks and public scrutiny, it remains a major force in the sport.
