How Revenue is Spent at PGA Tour, Inc (2023)

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, 3 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 2023, the PGA Tour, Inc reported total revenue of $1.8 billion (compared to $1.9 billion in 2022 and $1.6 billion in 2021), most of which came from 5 sources:

• Media Rights ($731 million)
• Sponsorship ($422 million)
• Royalties ($302 million)
• Tournament Management ($204 million)
• Investment Income and Gains ($130 million)

Expenses totaled $1.9 billion with expenses categorized as follows:

• $833 million (46% of revenue):  Fees for Services (primarily player prize and other benefits)
• $285 million (16% 0f revenue):  Compensation
• $258 million (14% of revenue):  TV Production and Broadcasting
• $144 million (8% of revenue):  Tournament Allocations
• $110 million (6% of revenue):   Interest and Other Expenses (no detail provided)
• $100 million (6% of revenue):  Office-Related Expenses and Equipment Maintenance
• $ 52 million (3% of revenue):  Travel and Conferences
• $ 51 million (3% of revenue):  Player Retirement Earnings
• $ 43 million (2% of revenue):  Grants
• $  5 million (less than 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).  Player prize  earnings in 2023 totaled $460 million among the 47 tournament with purses ranging from $4 million to $20 million.

The next largest expense is for compensation: 1,265 employees (about 100 more than in 2022) received $285 million in compensation, or an average of $225,000.  450 employees received more than $100,000 in compensation with the most highly compensated employee reported to be Rory McIlroy, a Player/Director who received $25 million followed by Joseph Monahan, the commissioner who received $23 million in compensation in 2023.

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

$100:  Revenue

-$ 46 :  Fees for Services (primarily player prize and other benefits)\

-$  3:  Player Retirement Earnings

-$  2:  Grants

-$ 51:  Subtotal Fees and Player Retirement Earnings

 $ 49:  Remaining Revenue

-$ 14:  TV Production and Broadcasting

-$ 16:  Compensation

-$  8:  Tournament Allocations

-$  6:  Interest and Other Expenses

-$  6:  Office-Related Expenses and Equipment Maintenance

-$  3:  Travel and Conferences, Advertising and Promotion

-$ 53:  Subtotal: TV, Comp, Tournaments, Interest, Office, Equipment, Travel, Advertising

 -$  4:  Excess Expenses 

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 (316 grants of $5,000 or more were made).  $53 out of every $100 was spent on organizational expenses.  In other words, PGA Tour, Inc. spent $104 for every $100 in revenue, which equates to spending $62 million more than the organization received.

Finally, it is important to note the PGA Tour, Inc has $1.2 billion in net assets.

To read the IRS form 990 (2023), click here.