What Parts of PGA Tour Could Be Included in A Future Deal with PIF?

In his fast explanation of the proposed new deal between the PGA Tour and PIF on CNBC, Jay Monahan did not really have enough time to get into the weeds about the various parts of the PGA Tour as he was trying to explain the possibilities to people. If you knew about the number of parts under the umbrella PGA Tour, you’d know why he didn’t. So, here we go.

A cursory look at the Florida Division of Corporations search for PGA Tour shows two-and-a-half pages of entities. There are 45 in all.  But there are a couple from the PGA of America in the same list and something that gives Tours that doesn’t belong to either organization, so there are a couple of traps in it. I counted 45.

Clicking on each name reveals whether it is a non-profit entity, such as the PGA Tour, Inc., or a for-profit company, such as PGA Tour Golf Course Properties, Inc., and whether it is currently an active organization, inactive, or dissolved, meaning it no longer really exists.

There are also some LLCs, making it more confusing. Presume the LLCs, like PGA Tour Gaming, is designed to make money, but it could be money that flows to the players, not money that is classified as a profit for the Tour.  It might fund the PIP for all we know. We do not know if gaming makes any money now.  We don’t know what it’s designed to do.  And goodness knows, few if any golf writers have business degrees, so most of them just don’t know any of this stuff.

However, what the total list of various PGA Tour entities shows is that there are various parts of the PGA Tour that are divided into sundry mini-companies that either are set up as non-profits or to make money…

All 45 of those PGA Tour-related companies are under the general giant umbrella of what we all call the PGA Tour. But only the one non-profit called PGA Tour, Inc., runs all the tournaments which raise money for charitable donations and pay the Tour pros.

The officers and directors of the corporation called PGA Tour, Inc., are listed as:

"Secretary, Hoffman, Charley; Director,  Dunne, James J, III;  Chief Legal Officer, EVP-Licensing, Brown, Leonard D., Jr.;  COO, Price, Ronald E.; Director, President,  Herlihy, Edward  D.; Director, Stephenson, Randall, L.;  Treasurer, McIlroy, Rory; Director, LInert, John; Commissioner, Monahan, Jay W., IV;  Chief Media Officer, Anderson, Richard D.; Chief Administrative Officer, Assistant Secretary, Keller, Allison W.; EVP, CFO, Madara, Jay M.; Chief Tournament & Competitions Officer, Pazder, J. Andrew; Director, Meeker, Mary G.; Director, Flaherty, Mark A.; Director, Cantlay, Patrick; Director, Malnati, Peter; Director, Simpson, Webb."

However, to make it more confusing, there are other non-profits under the umbrella, like PGA Tour Charities, Inc., a not-for-profit corporation, and the PGA Tour Wives Association, also a not-for-profit entity. You can see some of the PGA Tour Charities on their web page.  And learn about PGA Tour Wives Association.

Then there are parts of the PGA Tour that do make money on purpose.

In the for-profit side of things, there’s PGA Tour Licensed Properties, Inc., and even PGA Tour Media Center, which one presumes is the building that’s used to house media during THE PLAYERS Championship.

They may hold money-making events in the building on the other days of the year but managing a herd of media people during one week of the year is definitely a money-loser, not a money-maker. On the other hand, they may need to separate the media as a cost, and that is one way to do it.

However, what the total list of various entities shows is that there are various parts of the Tour that are divided into sundry mini-companies that either are set up as non-profits or to make money, depending on what they are supposed to do to support the overall organization.

One reason for these separations, I was told decades ago but cannot for the life of me remember by whom, is because of the old FTC antitrust lawsuit, the one that was finished in 1995.  An old Los Angeles Times story about the lawsuit only covered part of it, mainly the part that dealt with politics. The part the article didn’t mention was that after the suit, the Tour separated its business into things that made a profit and things that didn’t.

That is, so far as the Florida Division of Corporations shows, the way it is organized today.

After the time of the separation, there were two basic buildings where the PGA Tour was housed.  The non-profit people were in one building on the right side of the road called Championship Way as you turn into the road up to the TPC Sawgrass clubhouse. The for-profit people were in an almost identical building on the left side of the road.  Then there were overflow bits and groups as the Tour grew, and they began to take up space in offices just outside the gates of the TPC Sawgrass development, meaning they were likely for-profit parts.

So, that takes us back to the original question which was what parts of the PGA Tour could be put into a new organization, if they wanted to do that.

They have a whole host of for-profit companies that they could spin off for purposes of making more money that would not even touch the part of the Tour that runs tournaments, raises money for charities, and pays players.

But they could just as easily make entirely new companies as Monahan said on CNBC with the PGA Tour as a partner. The new endeavor could easily be a for-profit company, whether it is an LLC or a corporation.

If it’s a new business, it could easily be separate from the existing PGA Tour, Inc., and its current 45 parts. A new business could be like Starbucks and Dairy Queen forming a new company to offer coffee-flavored ice cream. It’s not one, it’s not the other. It’s something different.

An example is the new TMRW Golf with Rory McIlroy, Tiger Woods, Mike McCarley, and the PGA Tour as partners.

Here’s an off-the-top-of-the-head for instance: It could be a for-profit company created to design and operate miniature golf courses all over the world with the PGA Tour brand and backed by PIF.  Miniature golf is a gateway activity for real golf.

Think of the NewCo like the commercial with the guy who has the peanut butter running into the guy with a hunk of chocolate. Voila! New candy called Reese’s peanut butter cups.

So, while it’s possible to take any one of about 40-plus Tour companies and make new organizations out of them, it’s more likely that both the PGA Tour and PIF will actually want to create something new.

It could be a growth vehicle for the PGA Tour as well and end up raising more money for charities and providing more cash for players. Maybe it’s several specialized team events that are optional for PGA Tour players, DP World Tour players, and Asian Tour players, held at times when those Tours have space on their calendars.

Making a new entity with the PGA Tour as a partner does give weight and panache of the PGA Tour to whatever company is created.  It does not necessarily take anything away from the Tour.

After all, as has been said by Jimmy Dunne, one of the members of the board of directors of the PGA Tour, the PIF is determined to be in golf, and why not have the Tour and charity benefit from it?

In other words, one of them may have the peanut butter and the other may have chocolate.

Maybe they make a brand new Reese’s.