2004: Newsmakers - West Coast purses hit plateau
Wednesday, September 28, 2011
The large-scale growth of PGA Tour purses may be coming to a screeching halt if next year’s early-season West Coast events are any barometer. With the exception of the WGC-Accenture Match Play, which will increase its purse from $7 million to $7.5 million, only one of the West Coast’s eight other events (Mercedes Championships, Sony Open, Buick Invitational, Phoenix Open, Bob Hope Chrysler Classic, AT&T Pebble Beach National Pro-Am, Nissan Open and the Chrysler Classic of Tucson) will be increasing its purse.
The Hope, which did not raise its purse in 2004, will move from $4.5 million to $4.7 million in 2005.
A contributing factor to the slowing growth of purse levels is the loss of a $2.4 million supplement that was part of the former West Coast Swing sponsorship package, but not part of a new deal signed by Allianz last month. Under the former sponsorship package with The St. Paul, the company designated $300,000 apiece to the purses of eight West Coast events, the exception being the WGC-Match Play.
Thus, West Coast events opting to keep their purses at 2004 levels will need to find $300,000 elsewhere, which in many cases will come from the bottom line.
“We didn’t want to go backward,” said Buick Invitational tournament director Tom Wilson, whose event will stay at $4.8 million in 2005. “Essentially, we will have less go to charity.”
Since 2000, when the PGA Tour played for $164 million, purses have grown 46 percent, an average of 11.5 percent annually over four years. The PGA Tour is playing for more than $240 million in 2004.
Duke Butler, vice president of Tournament Business Affairs for the PGA Tour, said he didn’t believe the West Coast events would be affected much, and chose to focus on the large TV ad buy that is the cornerstone of the new deal with Allianz Life. (The top three players in the West Coast Swing will divide a pool of $1 million, with $500,000 awarded to the winner.)
“There is no longer a purse subsidiary to the Tour,” Butler said. “But it’s not as significant a factor as it was in the mid-’90s.”
Instead, Allianz Life will buy more ad time to promote its brand and the West Coast Swing. Allianz will get more than 100 commercial spots during the nine West Coast events and will be part of other Tour telecasts as well. Allianz CEO Mark Zesbaugh told Street & Smith’s SportsBusiness Journal the two-year deal was worth “north of $5 million a year.”
Said one tournament director who wished to remain anonymous: “Little comfort to those eight events that will gain little from advertising that doesn’t promote the tournament, but the (West Coast) swing, the sponsor and the PGA Tour.”