How Revenue is Spent at the PGA Tour (2021)

The PGA Tour, Inc. is a tax-exempt, non-profit 501 (c) 6 – a membership organization for touring professional golfers – up to a maximum of 156 who participate in 47 events (44 regular events and 3 playoff events). The exact number of members is difficult to determine since there are various exemptions and player status (the top 125 ranked players have their card renewed annually but players ranked between 126-150 can retain their card and play when other golfers are not playing, and winning certain tournaments also guarantees a tour card).

There are 40 related organizations taxed as a corporation or trust, 4 related organizations taxed as a partnership, and 4 related tax-exempt organizations (see the Form 990, Schedule R for details).

The PGA Tour, Inc is overseen by 10 voting members of the governing body, 6 of whom are independent, and 9 of whom are male and 1 female.

In 2021, the PGA Tour, Inc reported total revenue of $1.6 billion, most of which came from 5 sources:

• Media Rights ($583 million)
• Sponsorship ($352 million)
• Royalties ($240 million)
• Investment Income and Gains ($204 million)
• Tournament Management ($152 million)

Expenses totaled $1.6 billion with expenses categorized as follows:

• $596 million (38% of revenue):  Fees for Services (primarily player prize and other benefits)
• $276 million (18% of revenue):  TV Production and Broadcasting
• $181 million (12% 0f revenue):  Compensation
• $154 million (10% of revenue):  Player Retirement Earnings
• $ 99 million (6% of revenue):  Tournament Allocations
• $ 84 million (5% of revenue):   Interest and Other Expenses (no detail provided)
• $ 76 million (5% of revenue):  Office-Related Expenses and Equipment Maintenance
• $ 44 million (3% of revenue):  Grants
• $ 25 million (2% of revenue):  Travel and Conferences
• $ 18 million (1% of revenue):  Advertising and Promotion

As illustrated above, the largest expense was for Fees for Services which is primarily player prize and other benefits and yet it is unclear how these allocations are made to members as there is not enough information on the Form 990 (fees for services is generally fees paid to non-employees which technically the members (who do not pay membership fees) could be considered non-employees).  Given there are 47 tournaments with purses ranging from $4 million to $20 million, then an estimated $500 million for player prize and other benefits is possible ($500 million/47 = about $10 million per tournament).

The next largest expense is for tv production and broadcasting followed by compensation.  1040 employees received $181 million in compensation, or an average of $174,000.  340 employees received more than $100,000 in compensation with the most highly compensated employee reported to be Joseph Monahan, the commissioner who received $13.9 million in compensation in 2021.

Using the above information, every $100 in revenue was spent as follows:

$100:  Revenue

-$ 38:  Fees for Services (primarily player prize and other benefits)\

-$ 10:  Player Retirement Earnings

-$  3:  Grants

-$ 51:  Subtotal Fees and Player Retirement Earnings

 $ 49:  Remaining Revenue

-$ 18:  TV Production and Broadcasting

-$ 12:  Compensation

-$  6:  Tournament Allocations

-$  5:  Interest

-$  5:  Office-Related Expenses and Equipment Maintenance

-$  2:  Travel and Conferences

-$  1:  Advertising and Promotion

-$ 49:  Subtotal: TV, Comp, Tournaments, Interest, Office, Equipment, Travel, Advertising

 $  0:  Remaining Revenue

As illustrated above the PGA Tour, Inc. spent $51 out of every $100 on fees for services (primarily player prize and other benefits), player retirement earnings, and grants (256 grants of $5,000 or more were made).  $49 out of every $100 was spent on organizational expenses.

Finally, it is important to note the PGA Tour, Inc has $1.3 billion in net assets.

To read the IRS form 990 (2021), click here.