“Unsustainable”, the increasingly worrying business model of professional circuits

Will the speculative bubble that exploded the “prize money” of the professional circuits last much longer? The question deserves to be raised since according to specialists, the colossal sums of money circulating on the two main circuits do not resist any economic logic. It also endangers the entire ecosystem. Explanations.

In addition to the earthquake caused by the irruption of LIFE Golf on the world golf scene, the injection of several billions has profoundly disrupted the economy of the professional circuits.

Whether they are those recruited at a high price by Greg Norman and its teams, to legitimize its circuit, or those remaining on the PGA Tour new-look, increasingly elitist and structured around boosted tournaments (Signature Events), the main beneficiaries of this significant influx of money are undoubtedly the players.

There is no agreement on TV rights. There is no big partnership with big groups. Despite the millions of dollars invested, no one really wins except the players on both sides.

If some have even sheltered themselves financially for several generations as explained to The Irish Independent Paul McGinleyit is also to the detriment of other actors.

Economically irrational

“The media, the production teams, the people employed by the organization of tournaments on the PGA Tour, the sponsors, the charities receive a third or a quarter of what they received before…” explains in this podcast the Irishman, now a consultant for Golf Channel.

He is concerned about a development in the situation which he considers artificial and therefore not sustainable.

“It is not sustainable, says McGinley. Financially, the PGA Tour cannot maintain this level unless something changes. The LIV, even if the Saudis have a lot of money, is not going to continue to spend without counting 40 to 50 million dollars per tournament. »

The divisions caused by the departure of several major stars of the game (DeChambeau, Koepka, Dustin Johnson and Rahm at the end of 2023) on the dissident circuit had the immediate consequence of a notable drop in the number of spectators and television viewers. So much so that negotiations with the major networks for TV rights are slipping.

“There is no agreement on TV rights. There is no big partnership with big groups. Despite the millions of dollars invested, no one really wins except the players on both sides. »

The omnipotence of players

McGinley regrets that this money is simply used to finance endowments which reach “ridiculous” amounts.

“If you are Shane Lowryyou earn three or four times more money than before the arrival of LIV. Same if you are Ian Poulter or Lee Westwood. For them, life has never been so beautiful. »

He predicts an explosion of what he considers to be a bubble because according to him the players who have taken power in the boards of directors of the circuits do not have the skills to deal with these situations and they most often favor their personal interests without worrying about the future of the circuit.

“The players have too much power,” he added. As a former player, I can say that. They will vote for what is best for them rather than what is best for the sport. »

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