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Prize funds rising, but
slowing
The growth rate of PGA Tour prize money likely will slow during the next four-year
television contract because of the recession, although commissioner Tim Finchem
said Wednesday he still expects an increase of at least $100 million.
``We don't see significant impacts,'' Finchem said during his annual state
of the tour news conference.
He also said he is working on restructuring the Senior PGA Tour, although lowering
the age requirement is not ``part of that equation.''
The economy's effect on golf has raised serious concerns over the past few
months, especially because three tournaments have said since July that their title
sponsors will not renew their contracts after the 2002 season.
The tour negotiated this summer another four-year TV deal -- for 2003-06 --
worth close to $1 billion. The next step is get each tournament to agree to new
contracts, a process the tour hopes to complete by the first quarter of next year.
Finchem said the tour already has received commitments from half of the tournaments.
``There is no question in my mind that, regardless of the recession, our tournaments
will be fully sponsored over the next four years,'' Finchem said.
The question is how much tournaments -- specifically their corporate title
sponsors -- can help raise prize money. There were 17 tournaments, including the
majors and World Golf Championship events, that had purses of at least $4 million.
At the end of the previous TV contract in 1998, only two tournaments -- The
Players Championship and the Tour Championship -- had $4 million purses.
Total prize money on the PGA Tour at the end of 1998 was about $96 million.
When the new deal began in 1999, prize money increased to $131 million. Finchem
said it will be at about $200 million next season, the final year of the current
contract.
That would be a 100 percent increase in prize money for the last two contracts.
``I think it is not unreasonable to assume that our prize money the next four
years would grow to somewhere upwards of $300 million by the end of that cycle,''
he said.
That would be about a 50 percent increase, and even higher purses. Finchem
has said he expects the World Golf Championships to worth $7 million in a couple
of years and ``north of that'' by 2006.
``The PGA Tour is stronger than it has ever been. Over the next five years,
it will be stronger still,'' Finchem said. ``The strength of the product is going
to allow us to fully sponsor our tour in a way that we will be able to continue
to increase financial benefits back to the players and contributions to charity.''
The senior tour, meanwhile, remains a work in progress.
There has been talk in recent months of restructuring a tour that is getting
increasingly lower ratings on CNBC.
``The senior tour needs to compete better in the overall sports environment,''
he said.
Finchem said one possibility is to expand the eligibility, although he nixed
the idea of lowering the age requirement from 50.
``It's important to provide some strengthening of the senior tour's marketing
capability,'' he said. ``We do not think ... for a lot of different reason, changing
the age is one of those things and I am not going to recommend that to our board.''
Finchem is considering an increase of senior tour players who had full careers
on the PGA Tour, but ``that's only one part of the puzzle.''
He expects to have a solution by the end of the year.
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