Ever wondered about how the business of sports is different for golfers?  Unlike other sports, they are self employed.

I was attending the RBC Canadian Open in the pouring rain.  Quite a few of the professional golfers competing here bolted after the first and second day.  They just left because of the delays and their early poor scores.  Eleven, in fact, left after the first round.

In what other sport will players simply leave in mid game?  But these golfers are compensated based on performance.  If they don’t make the half way cut, they get nothing.

True some get appearance fees and Pro-Am money, but that’s not from the competition.  So eleven guys would rather leave than pay for hotel bills and travel costs.  That’s different.

The PGA Tour is owned by the players.  That means workers control production.  The MLB, NFL, NHL and NBA are owned by owners of teams.  In those sports, players are employees.  They get paid whether they are successful or not on any given week.  Their expenses are paid when they travel, uniforms and equipment also paid for by the teams.

To cover costs, golfers will sell their hats, shirts, bags, clubs and even their balls for money.  That’s right the workers source revenue for the enterprise.

It gives them a steady cash flow as long as they are prominent enough to get some visibility.  They also sell their likenesses and appearances much like other sports figures do, but golfers can actually play their sport with customers – for a fee.  Presidents famously play golf with Tiger Woods, but I would hate to see one play hockey with Sidney Crosby.

So which sports business model works best?  Hard to say if there is any way to compare.  But one thing is absolutely true, there are no feather-bedders in golf.  Every dollar earned is from performance.

In other sports, players can make big bucks riding benches based on previous year’s performances.  There are many stories of inequality in compensation.  Toronto Blue Jays recently released their former closer who lost his zip.  He was making $12,000,000 this year and had 2 saves.  He made the same last year and got 38.  Hard to equate compensation with results.  Baseball, like other sports, allows players to live on their rep.

Doesn’t happen in golf.

So while the golfers may be communists — that is employees owning their source of income — they are also the ultimate capitalists.  Paid for performance.

Revenue sharing has always been a bone of contention in other sports.  Who should get more?  The team owners?  The cities?  The players?  The league?  Certainly not the fans.

The only consistency is that the taxpayers in the host cities bite the biscuit.  The remaining groups squabble over the millions and millions on the table each claiming a “poor and hard done by” status.

Now what about golfers?

They have to pay their own expenses and entry fees.  They pay for membership on their Tours.  On some of the minor league tours those entry fees and membership fees are sometimes what the prize money is created from.  The golfers are independent contractors, affiliated with Tours.

Consider the economics of someone who is not well established on the PGA, European or LPGA Tours.  Just to show up and compete might cost $70 to $80K per year.  If you are not among the gifted, you have to struggle — some driving from tournament to tournament, often sleeping in your car or sharing a room with a buddy, just to get the experience needed.

Today, in the pouring rain, no one is getting paid diddly.

The leaderboard includes some players who are still trying to break even.  Canadian Chris Baryla has made the cut and will get a payday likely better than any other he will have this year.  He is working on the Nationwide Tour where so far he has earned about $60K in five events as he plays himself onto that Tour after losing his card due to lack of performance in the past.

This weekend the winner at the Open takes home $900K US.  In his current spot he would take home $36K+. But today that means no play, no pay.

And getting on the PGA Tour doesn’t result from being  “drafted.”  It means fighting your way through all kinds of Qualifying tournaments, Q-schools as they are called.  Rare is the player who can go directly to a Tour and start playing.  You’ve got to earn your card.

Isn’t that capitalism at its core?

Capitalism gets tainted by unions that demand too much and won’t accept cuts when the going gets tough.

Consider the Toronto Trash Union who are currently on strike.  They get 18 sick days a year and can bank them for use as paid days off, maybe playing golf on the City tab.  They refuse to reduce these from when they were granted them by more charitable City governments in better times.

They are cousins of the non-performing baseball player, assuming entitlement for past year’s adequate performance.  Same is true of the auto workers who seemed more bent on letting their employer go broke than reducing their rates when the company’s performance took them to the brink.  Why are they entitled to any pay security?

Take a lesson from the golfers.  You should earn it every day.  When your company is floundering, it is like being demoted to the Canadian Tour to play for $150,000 in total money instead of the $5 million at the Canadian Open.

Post Script:  Our example, Chris Baryla came raging in with a final round 66 and finished with a share of eighth place to win $123,037 – double his winnings so far this year.  Nice payday.  Better than that he gets an automatic invite into next week’s PGA event, the $5 million Buick Open.

  • Share/Bookmark

Leave a Reply

Powered by WordPress.
Calotropis theme by itx