You're Reading: Merits of the New Saudi Super League
Money talks, right? That’s certainly the hope of the new Saudi Golf League (SGL) that has threatened the current status of the PGA Tour as the world’s ultimate competition grounds for the world’s best. How much money? Well, Ian Poulter and Henrik Stenson, currently ranked 63rd and 190th in the OWGR, respectively, have reportedly been offered $30 million each. Bryson DeChambeau’s rumored offer of $135 million dwarfs Poulter’s and Stenson’s deals.
Remember, these are just signing bonuses and the events, which will have no cuts and thus guaranteed winnings, are expected to have “huge, huge purses.” However, despite these mammoth figures, there has been a fallout of interest from top players, and Rory McIlroy believes that the new tour is “dead in the water.”
What we are seeing is the limitations of money. In the words of the Beatles, golf’s stars “want the kind of things that money just can’t buy.” Instead, the McIlroys and DeChambeaus in the game want to achieve success and legacy. To do so, they have play against the best in the world and win at prestigious and coveted championships. The PGA Tour has prestige in spades. Home to golf’s four majors, by which the best players are always measured, and the Player’s Championship, the PGA Tour has the premier events and courses. Furthermore, it doesn’t hurt that golf’s most popular athlete, Tiger Woods, has his “legacy” on the PGA Tour. Other greats such as Jack Nicklaus and Arnold Palmer also built this legacy and host regular PGA Tour events – Jack, the Memorial Tournament, and Arnold, the Arnold Palmer Invitational.
Greg Norman’s SGL is lacking in these aspects, and players have openly acknowledged it. Time and again, interviewers’ questions about the potential of the new league have been answered by ‘I will play where the best players in the world play.’ “Right now, you look at the best players that I see and they’re all sticking with the PGA Tour and that’s where I kind of stay and that’s where I belong,” observed Collin Morikawa, the current World No. 2. Norway’s young start Viktor Hovland shares this sentiment saying, “I just want to play against the best players in the world.” For Justin Thomas, his goal is simple: “create a legacy and win as many times as I can on the PGA Tour.” While there are still others, recent winner at the 2022 Genesis Invitational Joaquin Niemann summed up the lure of the PGA Tour best:
"Obviously everyone’s here to compete against the best players in the world. I’m here to do the same. I want to compete with the best players in the world, I want to be No. 1 one day. I think there’s nothing better than what I’m feeling right now. Winning a PGA Tour event, getting a trophy, having Tiger there, all the history behind, there’s nothing that can compete with this."
— Joaquin Niemann
Ultimately, this dynamic and fallout from the Saudi League can be explained by 20th century, American psychologist Abraham Maslow and his pyramid of needs. At its core, Maslow’s Hierarchy of Needs categorizes human motivations into stages, each with a prerequisite to the stage before. The hierarchy is often used by economists and professionals in marketing and human resources to predict human behavior and includes five main motivations: Physiological Needs, Security and Safety Needs, Social Needs, Esteem Needs, and Self-Actualization Needs.
Physiological Needs and Security and Safety Needs reflect the essential needs of life – food, water, shelter, clothing, and security, both financial and physical. However, once these essentials are achieved, individuals seek social gratification. In the context of the PGA Tour and the SGL, the top two needs on the hierarchy in Esteem and Self-Actualization needs are most relevant.
Professional golfers, particularly the top golfers and those contacted by the SGL, have achieved Maslow’s basic needs. In 2021, Jon Rahm led the PGA Tour’s Money List, having netted $7,705,933. 100th on the list was Gary Woodland, who brought home still over a million dollars. This accounts strictly for prize earnings and not for sponsorships, endorsements, or even the FedEx Cup bonus, which benefited its 2021 winner Patrick Cantlay with a cool $15 million and the rest of the top 150 in the standings with at least $70,000. Safe to say that Cantlay is striving for more than the foundation of the pyramid. Instead, he has progressed to seeking esteem by claiming trophies and creating a legacy and seeking self-actualization by achieving personal growth and becoming the best golfer he can be. The only way to challenge yourself to be the best is to play the best.
In this way, the SGL was not without hope initially. DeChambeau’s Twitter Statement highlights this.
— Bryson DeChambeau (@b_dechambeau) February 20, 2022
While he has been vocal about winning the Masters being his “ultimate goal,” had the world’s best left the PGA Tour, he very well might have done the same. In many respects, this uncertainty and mystery about the SGL has been the theme of its dialogue and how the saga has played out thus far. However, with the recent news that has unshrouded the unknowns and seen players breakaway from Norman’s tour, it very likely is “dead in the water.”
If the concept of a super league where the elite few in a given sport dominate sounds familiar, it’s because it is. Anyone who keeps an eye on the FIFA, UEFA, or European Football in general remembers the proposed European Super League whose rise and fall transpired in April of 2021.
There are some significant parallels between the European Super League and the Saudi Golf League. The most notable being the lucrative payout promised to joining member teams. Indeed, the new league was simply “about money” with clubs cashing in $400 million (four times more than the winner’s payout from UEFA’s Champions League). Furthermore, having limited and the most popular teams, the Super League aimed to increase revenues for its select teams.
Next, both the European Super League and the SGL planned to offer guaranteed money. The fifteen founding members of the European Super League would be granted permanent memberships unlike the Champions League which accepts the top teams for annual competition. Similarly, the proposed Super Golf League would have 40 player events with no cuts, distributing the enormous purses to each position. Manchester City’s manager Pep Guardiola asserted “It is not a sport where success is already guaranteed or it is not a sport when it doesn’t matter if you lose.” Speaking to the appearance fees and guaranteed payouts of the SGL, Rory McIlroy argued that “It’s the competitive integrity to me that’s one of the biggest issues here.”
There is also a shared theme among the figure-heads of the respective leagues. Greg Norman, the CEO of the SGL, is a Hall of Fame golfer who was consistently the top-ranked player in the 90s before Tiger. Moreover, as Golf Digest’s Dan Rapaport explains, Norman has had a long-standing grudge against the PGA Tour and been interested in establishing an alternative tour to compete. Real Madrid’s president Florentino Perez, who has been a critic of the Champions League and has had designs on creating a new league since 2009, has spearheaded the football’s Super League.
Lastly, the major governing bodies in UEFA, FIFA, and the PGA Tour each worked to deter any interest in the new leagues and threatened to ban players who left from competition within their organizations. For UEFA and FIFA, they proved successful. Just three days after the official announcement of the Super League, the league had disbanded after facing backlash from fans, players, managers, brands, and even royalty and political leaders. It appears that Norman’s league will face the same fate.
Back in 1994 when Greg Norman initially attempted to dethrone the PGA Tour and establish an international tour, there was significantly more reason for doing so than today.
At the end of 1994, eight of the top ten players in the Official World Golf Ranking were international players – only two were from the United States (Fred Couples ranked 6th and Corey Pavin ranked 10th). Despite the allocation of talent, the PGA Tour still dominated other world tours. This dissatisfied Norman, who reluctantly missed opportunities to rake in appearance fees outside of the PGA Tour, where appearance fees are banned.
In order to play an event on a competing tour during the same week as a PGA Tour event, players were and still are required to request exemptions from the tour, like many top players did back in February to play in the Saudi International (hosted the same week as the AT&T Pebble Beach Pro-Am) and collect the associated appearance fees (up to seven figures).
Norman also dislikes the number-of-events requirements and stipulations that the PGA Tour imposes. Golfers must play a total of 25 events on the PGA Tour, or a little more than half the scheduled events. If they fall below this number, they are required to play in a tournament that they have not played in any of the prior four years. At the minimum, players are required to play 15 events. Failure to meet these requirements can result in fines and tournament suspensions. Thus, the vision for Norman has always been to create a new league with limited events. The proposed Saudi league would have maybe 14 events with plans to host a handful of events outside of the U.S.
It is important to note that since 1994, when the PGA Tour only hosted two events internationally, the Canadian Open and the British Open, it has expanded globally through the World Golf Championships (first contested in 1999) as well as through regular PGA Tour events, like the Zozo Championship in Japan whose inaugural 2019 champion was Tiger Woods. All in all, the PGA Tour schedule includes 10 events in its 2021-2022 season that are not held in the United States. Furthermore, due to the restrictions inflicted by the pandemic, the CJ Cup, which normally would have been played in Seoul, South Korea, was relocated to Las Vegas.
From this perspective, the PGA Tour is understanding a growing global golf audience and has accordingly reflected the growth in its schedule. The need for an international tour is not as relevant as it was when Norman first broached the concept. Even still, the proposed league will still revolve much around the United States, with 10 of its 14 events predicted to be in the states. This is no coincidence. The economy and number of golf fans in the United States presents the best money opportunities for golf tournaments. The European Tour, which hosts events in Africa, the Middle East, Asia, and of course Europe, struggles to compete with the attendance, revenues, and purses of those of the PGA Tour.
To compare and contrast, prior to the pandemic, the European Tour’s flagship event The BMW PGA Championship had an attendance of 113,640 for the week while the PGA Tour’s flagship event The Players had roughly 200,000. For the 2022 BMW PGA Championship, ticket prices will range from £13 to £50 ($17.16 to $66 based on the current exchange rate). At this year’s The Players, Thursday and Friday ticket prices will be $75 and Saturday and Sunday will be $85. While both tours have recently increased purses, the European Tour did so more notably by doubling the overall purse money to hit $200 million. Still, with at least 47 events, this works out to an average of $4.3 million per event. The PGA Tour’s average for a regular event: $9 million.
One could argue that the reason for the disparities in interest and thus affluence can be attributed to the caliber of players that regularly compete on the PGA Tour versus that of the European Tour. There is probably some truth to this, but the fact is that golf in other nations simply does not lead to as much money as it does in the United States.
As far as appearance fees are concerned, it’s not just as simple as the best golfers in the world are paid handsomely to play at non-PGA Tour events around the world. The reason players are worth as much as they are is because they have built a legacy and standing in the game that is much fueled by their success on the PGA Tour and the promoting the tour does as well as the sponsorships that come with the PGA Tour brand. In other words, the PGA Tour plays a critical role in making possible the things that Greg Norman wants. Theoretically, the new league could replace it and in doing so, it would disrupt the game of professional golf by all of a sudden reducing the number of events and players involved.
Perhaps fewer events could drive interest. However, in recent years, the NFL has expanded its schedule, both by adding a week to the regular season and inviting more teams to the playoffs for Super Wild Card Weekend. Similarly, the NBA has established its Play-In Tournament, which will have the same effect of creating more action and content for fans.
With so much attention on Phil Mickelson and his comments and “support” of the Saudi Golf League, it is certainly worth discussing their merits.
To give a brief backstory, since discussion of the SGL grew in 2021, Phil Mickelson was seen as a potential player. In February of 2022, he observed that the PGA Tour’s use of players’ shot footage and other media rights exhibited a “type of greed [that] is … beyond obnoxious.” The topic of media rights is not just of interest to Phil; Tiger responded to a reporter’s question on the subject with a more diplomatic answer. Then, during the 2022 Genesis Invitational, a conversation Mickelson had with author Alan Shipnuck in November of last year surfaced. The bottom line: “I’m not sure I even want [the SGL] to succeed, but just the idea of it is allowing us to get things done with the [PGA] Tour.”
A putative belief is that competition leads to fairness. This is the scenario for which Mickelson is hoping. However, claims by Mickelson and Norman that the tour will benefit fans is perhaps misleading. From a business/economics perspective, PGA Tour golfers are suppliers to the PGA Tour while the fans are the customers. In order to be financially viable, the PGA Tour already must cater to its fans. Especially in today’s social media and streaming world, golf fans have a multitude of options when it comes to entertainment. This is the type of competition that will benefit fans. As a consequence, the PGA Tour has adjusted its summer season, switching the order of its major championships, so that the season-ending FedEx Playoffs do not conflict with the start of the NFL season. This year, the PGA Tour changed the event order of its West Coast swing and positioned the Farmers Insurance Open for a Saturday finish, both moves to avoid conflict with the later-starting NFL playoffs.
Additionally, the PGA Tour has made efforts to bring fans closer to the PGA Tour with its newly announced partnership with Netflix to produce an inside-the-ropes documentary. After the success Formula 1 has had with Netflix with its own series Formula 1: Drive to Survive, the PGA Tour hopes to increase interest in the game as well.
In contrast, the Player Impact Program (PIP) is a $40 million prize fund that redistributes the revenues generated by the tour to the most popular players – those who drive ratings and attendance. In many ways it is seen as a response/defense to first the Premier Golf League and now the SGL. While there is also the hope that the PIP will incentivize players to interact with fans more on social media, the criteria for the program are not focused on this metric and the results from the program’s first year are not consistent with the objective. Tiger Woods and Phil Mickelson led the list. Many fans and players are surprised that Tiger finished 1st considering he was absent from PGA Tour events for the entirety of 2021. However, even without playing, Tiger grabs attention via internet searches and awareness. Ultimately, this is a clear example that while competing tours may give players more control, fans see little improvement. Currently, the MLB’s lockdown, over revenue disputes between teams and players, has shown itself to be bad for fans. The league has been forced to cancel games after failing to find a resolution.
The PIP list is what you’d get if you asked my dad and his friends who the “biggest golfers on the tour” are. Not saying it’s a good thing or a bad thing. But that’s what it is. pic.twitter.com/gTiF4tP1Te
— Dan Rapaport (@Daniel_Rapaport) March 3, 2022
To Phil’s credit, there is perhaps some things the tour is doing incorrectly in its relationship with its players that spell missed opportunities to better the experience for fans. For example, Mickelson has discussed how he would put a camera and microphone on him and his caddy during events except for the fact that the PGA Tour will not pay him for doing so. It is unclear as to whether these actions will improve fan experience, but there is clearly a lack of incentive for players in this area.
Players and fans alike may look at Mickelson, who has amassed great wealth as a professional golfer, and argue the point that he does not need this additional income stream. While this may be true, there is principle involved and the feeling of equity. Again, analyzing from a business/human resources perspective, behavioral psychologist John Stacey Adams developed the equity theory which says that “employees view a situation as equitable when employees who give similar inputs receive similar outputs.” Perhaps Mickelson believes that he offers more to golf fans and the PGA Tour than many players. Consequently, he should be benefited accordingly by the PGA Tour, specifically through its handling of media rights. Furthermore, while the PGA Tour has found new ways to capture profits through evolving media, even though top players are already making millions, they may wish to see some of those additional profits going to them.
Thanks to the proposed leagues, this money objective has been accomplished via the PIP and increased purses for 2022. But again, unless the increased payouts alleviated a risk of a lockdown or a PGA Tour boycott by prominent players, fans did not see this benefit.
Nevertheless, there is perhaps one way in which competition amongst the PGA Tour and new leagues could benefit the game: growing the game globally. The strategic alliance formed by the PGA Tour and European Tour for 2022 is an example of the possibility of global growth. Through this alliance, the two tours will have co-sanctioned events such as the Genesis Scottish Open, held the week prior to the British Open. In past years, the Scottish Open competed with the PGA Tour’s John Deere Classic. While the Scottish Open had already attracted several of the top PGA Tour players, who were trying to reacclimate themselves to links golf, the event should benefit from an even greater pool of talent. In this way, the competition from the SGL, which likely spurred the alliance, has helped to grow the game outside of the United States.
A final note about Mickelson. The point that money can’t buy me love was made earlier in this article. However, the sticky situation in which Mickelson has found himself reveals that despite the massive contracts promised to players joining the SGL, the net proceeds may not be positive. Recently, Mickelson has lost his endorsements with KPMG, Workday, and Amstel Light, and has had his partnership with Callaway Golf paused.
Clearly, there are many moving parts, ranging from motivational psychology to the growth of an international game, involved in the whole debate over a new Saudi League. Interestingly, throughout it all are examples from other major sports organizations with parallels to the current situation and speculation about the PGA Tour and its future. As for the future, the PGA Tour season is heating up, and it looks as though the focus will be a little more on the golf than the drama of the SGL.
