Advertisement

PGA Tour lays out how the Player Equity Program will work

PGA Tour lays out how the Player Equity Program will work

In February, PGA Tour commissioner Jay Monahan introduced the rough outline of the Player Equity Program, a vesting plan for the circuit’s new for-profit arm that will carve up a hefty portion of the initial $1.5 billion investment from Strategic Sports Group. On Wednesday, players were given a more detailed version of the program, PGA Tour chief competitions officer Tyler Dennis confirmed on "Golf Central."

The initial player equity grants will be approximately $930 million distributed to 193 players via four categories, starting with the game’s stars. Monahan informed players on Wednesday via a letter of their individual grants.

“There’s no other sports league in the world that has this significant number of their athletes as owners of their own sports organization,” Dennis said.

"We want to grow the PGA Tour in many different ways and having the alignment of players as player-owners with the organization is going to allow us to drive that quickly forward.”

The first group includes 36 players receiving $750 million in equity based on the last five years of play. “Career Points” will be awarded based on how many years a player has been a Tour member, how many times they earned a spot in the Tour Championship and how many times they have won, with extra points awarded for high-profile victories like the majors, The Players Championship and the FedExCup.

Group 2’s share of the initial equity will be much smaller ($75 million) and will be granted to 64 players. The group is considered “steady performers and up-and-comers” and will be based on FedExCup points earned over the last three years.

Equity to Group 3 will be $30 million going to 57 players based on career earnings and how many times a player finished inside the top 125 in FedExCup points.

The final group will include “past legends,” like Jack Nicklaus and Tom Watson, with $75 million going to 36 players based on the “Career Points” formula. Those grants will only be awarded to “past legends” that are living.

Perhaps most important to players will be the program’s eight-year vesting period. The grants will be worth 50% of their value after four years, 75% after six and 100% after eight years, when a player will be able to sell their equity in PGA Tour Enterprises, the for-profit arm the Tour created for the program. At each vesting benchmark players will be responsible to pay taxes on the grants.

The program has been created to encourage loyalty to the Tour in the face of ongoing challenges from LIV Golf, and the requirements of maintaining membership (which includes a minimum of 15 starts each year) would mean players who join LIV Golf would not be eligible for the program or would give up any unvested equity if they were to join the rival circuit.

“We want the players to be fully aligned with their organization,” Dennis said. “It’s something no other sport has done before and we’re seeing an incredible amount of excitement about that.”

SSG valued the PGA Tour at $12.3 billion when the group, which is led by Fenway Sports, became a minority investor and the assumption is that valuation will continue to increase like most professional sports franchises in the United States.

The remainder of the initial $1.5 billion investment (roughly $600 million) will be awarded in recurring player grants of $100 million each year, beginning in 2025 through 2030. These grants will be awarded based on performance and Player Impact Program results with an eye toward young talent, like Ludvig Åberg or Nick Dunlap.