Tiger Woods is set to receive $100m
Tiger Woods is set to receive $100m
The PGA is rewarding golfers for their talent and contributions
Tiger Woods and others like Rory McIlroy are set to receive equity stakes in PGA Tour Enterprises as a reward for their loyalty to the PGA Tour, rather than joining the rival LIV Golf circuit.
Woods is expected to receive a $100 million stake while McIlroy's share will be valued at $50 million according to The Telegraph, $930 million of equity will be shared among 193 golfers, with $750million reserved for 36 of the world's best, based on a performance-based formula, and $75million given to retired legends.
The equity program is intended to reward top-performing players and legends who have made significant contributions to the PGA Tour's growth. To receive these grants, players must participate in at least 15 PGA Tour events or meet other service requirements in line with the value of their grants.
The equity grants come as the PGA Tour continues merger negotiations with LIV Golf, a Saudi-backed venture. The PGA Tour is seeking to maintain loyalty among its members by offering them a stake in the new for-profit entity.
Due to U.S. Securities and Exchange Commission regulations and the private nature of the financial information, the PGA Tour has not publicly commented on the details of the Telegraph's report. However, the move signifies a significant shift in how the PGA Tour aims to retain its top talent amid the ongoing competition with LIV Golf.
Top Projected Payouts
Tiger Woods: $100 million
Rory McIlroy: $50 million
Jordan Spieth: $30 million
Justin Thomas: $30 million
These equity payments will vest over eight years, with 50% coming by year four, another 25% in year six, and the remaining 25% in year eight.
John Nucci (sports law attorney) posted some information about the vesting period.
Vesting, in short, means that players will receive ownership/membership interests in PGA Tour Enterprises, but the players will forfeit those interests if they leave the Tour in a specified timeframe.
Example:
Player 1 receives $100 million in membership interests that vest over 8 years.
If the player leaves in years 1-4, they forfeit the full $100 million.
At year 4, $50 million becomes vested, and that amount is no longer forfeited if the player leaves.
At year 6, another $25 million vests.
At year 8, the remaining $25 million vests.
John Continued
For equity awards that are subject to vesting, it is not uncommon for them to accelerate upon the occurrence of a specified event.
For example, if a large investor from Saudi Arabia happened to invest a couple of billion dollars into PGA Tour Enterprises, these awards might become fully vested at the closing of that investment.
This structure accomplishes two things for the PGA Tour:
it incentivizes current members to stay in order to ensure their awards become fully vested over 8 years;
if there is an acceleration clause triggered by a PIF investment, their awards become fully vested which acts like a reward for staying loyal to the PGA Tour.
While we await the outcome of the PGA and LIV Golf merger, it’s good to see the PGA securing some assets to ensure it remains a desirable option from a financial standpoint.
I’ve seen many comments from people saying ‘Tiger isn’t a top player anymore’ and while I understand that, he’s included due to his impact on the game. Still to this day, people want to see Tiger, he’s the biggest draw on any golf event due to us golf fans finding it hard to let go of what was one of the most iconic eras in the game.
It’s business and he brings the eyeballs which helps to generate the revenue so it’s fair that he’s compensated for what he’s done and continues to do. I mean, some people follow his son’s career closer than they do many tour pros.
That’s all for this week, don’t forget to reach out to Baller Golf on X/Twitter
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