Following the emergence of LIV Golf, the PGA Tour introduced changes to counter the threat posed by the big-money start-up, including increased purses at many of its 2023 tournaments.
The shift has led to questions over how prize money of up to $20m can be sustained. While there are similar sums on offer at the biggest events in 2024, in an exclusive interview with Golfweek’s Adam Schupak, PGA Tour Policy Board member Webb Simpson has admitted “the model is broken" and fears it could lead to more sponsors pulling out after Wells Fargo and Honda ended their associations with the Tour.
Speaking at the Sony Open, Simpson began by conceding that, even with investment from the Strategic Sports Group (SSG) and amid the ongoing negotiations between the PGA Tour and Saudi Public Investment Fund (PIF) behind LIV Golf, the Tour doesn’t need dramatic changes.
He said: “We don’t need to re-shape a ton of things but we’re in a dire situation with LIV being a threat, and for the first time ever players are not seeing the PGA Tour as the greatest place in the world to play.”
However, he also warned that the amount of money available at the tournaments is not proportional to the popularity of the game. He continued: “The amount of money we’re playing for is astonishing considering how many people watch our sport.
“That’s why I’m glad SSG is coming on board, because the way I see it, without SSG, kind of where we were, it’s not sustainable to keep playing for $450 million, or however much we do on Tour, without some kind of subtle to major shift in how we’re thinking about everything.”
Simpson also stressed that the elevated purses had begun to impact the sponsors: “The model is broken at the purse sizes we’ve been going the last year,” he said. “And the sponsors are starting to feel it. Sponsors are pulling out. Wells Fargo, Farmers, there will probably be a couple more this year I would think, maybe one or two more.”
The news that Wells Fargo was ending its long-time sponsorship of one of the PGA Tour’s signature events came in December, and Simpson claimed the leap in prize money from $9m in 2022 to $20m a year later had forced the company's hand.
He explained: “They’ve been extremely happy up until having to continue to increase their purse, and they just didn’t feel like it was a good fit for them. So the product is really good. We’ve just got to sell it at the right price. We’ve got to be careful there.”
Webb Simpson thinks the increased purses is leading to sponsors including Wells Fargo pulling out
That news came after Honda brought its partnership with the PGA Tour to an end, while, earlier in January, it was also reported that Farmers Insurance would become the third long-time tournament sponsor to walk away.
Despite the seven-time PGA Tour winner's concerns, though, he remains hopeful that the involvement of SSG will help convince other sponsors to retain their interest in the Tour: “I think the sponsors will be very happy with SSG and the group of business guys involved," he said. "I think it will make sponsors feel a little more comfortable with the future of the Tour and us asking for bigger purses.”
The PGA Tour’s talks with the PIF of its framework agreement are due to conclude in April.
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