PGA Tour Tax Filing Shows A Significant Rise In Fees Amid Saudi PIF and LIV Golf Clash

For the past two years, as LIV Golf has risen to rival the PGA Tour, money has dominated the discourse around professional golf.

Tour’s 2022 IRS filings revealed a number of important facts, including as raises in Commissioner Jay Monahan’s pay, the Tour’s overall spending, income, and legal fees.

PGA Tour Tax Filing Shows A Significant Rise In Fees Amid Saudi PIF and LIV Golf Clash

Monahan received $18.6 million in reported salary in 2022 compared to $13.9 million in 2021. In addition to an actuarial estimate of $7.4 million for non-cash benefits that Monahan would get upon retirement, the $18.6 million also includes a $1.8 million basic salary, $9.2 million in bonuses and incentives, and the Tour.

The PGA Tour’s 2022 calendar year IRS filings were discovered by Sportico. The filing emphasizes the cost of going up against the Saudis and LIV Golf, even though it was made before the June 2023 announcement of the merger between the Saudi PIF, the DP World Tour, and itself.

In August 2022, golfers who switched from the PGA Tour to LIV sued the Tour. The Tour swiftly responded with a countersuit. The report states that the $20.7 million in legal fees only covered the first five months of the Tour’s legal battle with LIV and the expenditures associated with the Department of Justice’s examination of the contract.

Following its new TV arrangements, The Tour reported revenue of $1.9 billion in 2022, up from $1.59 billion in 2021. In 2022, expenses increased and came to $1.87 billion as opposed to $1.55 billion in 2021.

Additionally, the Tour gave more than $5 million in severance payments to departing workers: former executive vice president Jeanne Lightcap received $1.5 million, former chief marketing officer Ty Votaw received $1.1 million, and former chief financial officer Kenneth Sharkey received $2.1 million.

As the Tour started its legal struggle with LIV Golf and the PIF in August 2022, its legal costs increased from $2 million in 2021 to more than $20 million in 2022. The sum also accounts for the expenses incurred by the U.S. Department of Justice investigation.

The PGA Tour agreed to the three-way merger mostly due to the associated legal expenditures. Commissioner Jay Monahan informed staff members two days after the announcement that the Tour needed to use its $100 million in reserves since it had already spent $50 million on legal defense.

“We cannot compete with a foreign government with unlimited money,” Monahan told staff, according to The Wall Street Journal. “This was the time … We waited to be in the strongest possible position to get this deal in place.”

It is a reasonable and legitimate justification for the Tour’s choice to enter into a business partnership with the Saudis to point to the mounting legal bills, but this does not alleviate the crisis in any way.

I don’t know what would demonstrate the Saudis’ strong desire to dominate professional golf as a whole more than this.

June 9, 2022, saw the opening of LIV Golf, and on June 6, 2023, the regime announced the framework agreement, forcing the PGA Tour to take initiative.

Furthermore, the PGA Tour raised purse sizes by $100 million in 2023 compared to 2022 in response to the threat posed by LIV Golf. It was believed that this would appease its elite players and prevent them from signing with LIV Golf.

The Player Impact Program (PIP), which was developed by the Tour, was intended to pay the most well-liked players using a system that took into account social media views, media rights, and other indicators.

One of the greatest stories of the past few years has been the rise of interest in global sports by sovereign wealth, with many of those funds’ financial tolerance being a major factor in the disruption of sports like golf and soccer. The Saudi government fund PIF, which owns LIV, disclosed having almost $600 billion in assets under control as of the previous year. That is much more than the aggregate net wealth of all NFL owners and thirty times the yearly income of the NFL, the richest sports league in the world.

One of the few significant American professional sports leagues that continues to function as a federal charity is the PGA Tour. With the potential agreement with LIV and a measure to remove corporate taxation exemptions for pro sports being offered in Congress, that status came under further scrutiny.

However, the bill has yet to even be voted on in the House Committee on Ways and Means.

What is the PGA LIV deal?

The Public Investment Fund (PIF) of Saudi Arabia would fund the new firm and have first dibs on any future investments from other parties. The new company intended to consolidate the commercial operations of all three golf tours.

What does LIV stand for in golf?

The professional golf tour is called LIV Golf (/lɪv/ LIV). The term “LIV” designates the number of holes to be played during LIV tournaments as well as the Roman numerals for 54, which represent the score if every hole on a par-72 course were birdied.

Are PGA players allowed to play LIV?

PGA Tour players are permitted to participate in LIV Golf Promotions qualifying tournaments while the leagues are still settling on agreements. Watch Now: Players on the PGA Tour will be able to play in the LIV Golf Promotions event without fear of being suspended.

Why did Jon Rahm go to LIV?

He expressed his admiration for the LIV product and company. He said that neither Sergio Garcia nor Phil Mickelson had any influence on his choice. He stated that he had not been given any guarantees or assurances regarding an agreement or the Ryder Cup. He said, “growing the game” once, twice, three times.

 

 

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