Blake Davis
The loyalty shown by Tiger Woods, Rory McIlroy and other golf stars to the PGA Tour will be officially rewarded on Wednesday. Woods is set to receive $100 million in equity as part of the newly created for-profit PGA Tour Enterprises, with McIlroy getting about half the equity, according to the Telegraph,
The bets awarded to Woods, McIlroy and other PGA Tour stars are part of compensation from the league to thank players for sticking by their side rather than leaving for big-money contracts with LIV Golf (with support from Public Investment from Saudi Arabia). Bottom).
Earlier this year, PGA Tour Enterprises received an investment of up to $3 billion from Strategic Sports Group, a group of high-profile billionaire sports owners. While it is unclear how this investment will be spent, this capital distribution will be supported by these funds.
Payments are being delivered to players based on several factors, including career success and cultural popularity. Several hundred players will receive bets, although the majority of that equity – up to $750 million – will go to the top 36 players, as determined by an undisclosed formula that takes into account the aforementioned factors, among others.
Although the numbers are exaggerated, it is not simply a cash payment, as explained by the Telegraph.
After four years, 50% of your capital will be acquired, another 25% two years later and the remaining amount two years later. They will also have to comply with the rules, which in addition to not leaving the camp, imply compliance with the minimum requirements for joining the Tour and, otherwise, the provision of services such as sponsor meetings and appearances in the media.
It will be interesting how this plays out going forward. There will reportedly be $100 million in equity distributed annually, which will add up quickly. Even with the support of US$3 billion, it is a lot of equity destined for current and future players.
Regardless, the intent is clear: the PGA Tour rewards players for their loyalty. It’s also trying to align incentives within the organization. PGA Tour commissioner Jay Monahan said as much at The Players Championship earlier this year.
“Historically, our structure has limited our ability to make transformative investments in sport,” he said. “With PGA Tour Enterprises, our 13-member board of directors now in place and the partnership with Strategic Sports Group, we have changed that dynamic and unlocked our potential for future growth.
“With our player equity program, which is the first in professional sports, our interests and those of our players will be more deeply aligned. Our business thrives when together we are all focused on serving our fans. If we fail on this front, we fail on every the fronts.”
Players will begin receiving emails with the amount of equity they received this week. The capital numbers will be based on the $12 billion valuation from earlier this year, when SSG received 25% from PGA Tour Enterprises for its investment of up to $3 billion.
