PGA, Champions tours gauge fiscal health
Tuesday, September 15, 2009
Even in the midst of a recession, the PGA Tour is proving to be a stout revenue machine. But the same can’t be said for the Champions Tour.
Culling details from the tours’ recently released annual report, it’s evident the Champions Tour has financial difficulties. In 2008, the Champions Tour reported a net loss from operations of nearly $9.1 million and is projected to post a net loss of $7.3 million this year. The loss a year ago was reduced, thanks to a $5 million “resource allocation” from the PGA Tour, and similar financial assistance is budgeted again this year.
For 2009, the Champions Tour is budgeted to generate revenues of $86.9 million, down about 2 percent from $88.4 million a year ago.
Meanwhile, the PGA Tour is projected for a revenue gain – an expected increase of 3.3 percent to $482.9 million this year compared with $467.2 million in 2008.
The lion’s share for 2009 is attributable to budgeted direct revenues including television ($268.1 million) and tournament events ($95.2 million). However, the PGA Tour also is expected to benefit from a 13 percent revenue gain from what it calls “supporting tour businesses:” corporate licensing, retail licensing, Tournament Players Clubs, and pgatour.com, new media and productions. These ventures combined are projected to generate $34.6 million compared with $30.5 million in 2008.
After direct expenses such as tournament operating costs and allocating funds to players (including prize money and retirement plans), charity and reserves, the PGA Tour is expected to have excess net financial resources of $6.7 million. By comparison, the PGA Tour had an excess balance of $2.2 million a year ago.
Finchem has been adamant about maintaining the PGA Tour’s support of charities. Projected contributions are $31.1 million compared with $30.1 million in 2008.
At a time when nonprofit organizations, in particular, are struggling, it’s good to see that the Tour’s commitment hasn’t wavered.