News & Opinion

PGA Tour chief merits his millions

Anyone can do that job!

Or to be more specific, how much money should a commissioner of a major sports organization make?

It’s not an easy answer, but if you listen to many golf observers on Twitter, media members who cover the sport or some of the golfers who actually play the game for a living, the PGA Tour commissioner makes far too much money.

In the PGA Tour’s recently released 2016 tax return, Tim Finchem was paid $9,256,004 in total compensation as PGA Tour commissioner.

Tim Finchem, Former PGA Tour Commissioner
With his $9.256 million salary in 2016 as PGA Tour commissioner, the since-retired Tim Finchem would have ranked second on the Tour’s money list. 

No one disputes that $9.256 million is a lot of money. If Finchem, who retired at the end of 2016 after 22½ years as commissioner, were a player, he would have ranked second on the Tour’s 2016 money list.

Interestingly, 107 players earned more than $1 million in 2016 with Finchem guiding the Tour. Dustin Johnson led the millionaires club, with $9,365,185 in prize money. 

In 1994, when Finchem was appointed commissioner, only six players earned $1 million-plus, with Nick Price topping the money list at $1,499,927.

At any measure, this type of growth is a success, and the commissioner deserves a considerable amount of credit, but many believe that $9 million-plus is too much credit.

For the sake of comparison, NFL commissioner Roger Goodell was paid $31.7 million in 2015, the most recent year for which his salary was available. The New York Times reported that Goodell signed a five-year deal in late 2017 that, if all incentives are met, would be worth up to $200 million. The NFL was projected to make $14 billion in revenue last season.

The PGA Tour is a nonprofit organization, with the vast majority of its tournaments structured as nonprofits that donate their net proceeds to charity.

As the de facto chief executive officer, the PGA Tour commissioner – it’s now Jay Monahan, who replaced Finchem in early 2017 – makes hundreds of decisions, small and large. Many of his actions remain unseen, and many others are done in full view of players and the public. Some of those decisions are reviewed under a microscope and criticized by fans, players and media, but as commissioner, he must own them. 

And then sometimes, the commissioner gets a lift from the likes of a Tiger Woods or a Phil Mickelson to boost interest in the sport.

But on a daily basis, the buck stopped at Finchem’s desk in Ponte Vedra Beach, Fla. From any measure, Finchem did a pretty good job.

According to its 2016 tax return, the PGA Tour generated gross receipts of more than $2 billion. To the Tour’s shareholders, e.g., the players, they compete for more than $300 million in prize money and have a retirement plan that is the envy of every professional sports league.

But of course, anyone could do it, right?

Just ask shareholders of Wells Fargo, which is in the midst of a consumer-fraud crisis, or BP, which forever will be linked to the worst oil spill in U.S. history, nearly a decade ago in the Gulf of Mexico. Their well-compensated CEOs made decisions – and indecisions – that cost their companies billions.

Beyond the effects of Wall Street, consider another golf entity. The LPGA still is digging out from under the disastrous 4½-year tenure of former commissioner Carolyn Bivens.

The LPGA remains saddled with a television deal that includes no rights fees, and the players have a skimpy retirement plan. A player revolt forced Bivens out of the job in July 2009.

In his 22-plus years as PGA Tour commissioner, Finchem faced few, if any, issues that might have threatened the brand and the organization. Instead, Finchem had to wade through mistakes made beyond his control to ensure that the PGA Tour continued to thrive.

The 2008 economic downturn put the PGA Tour’s entire business model in harm’s way, but the Tour hasn’t missed a beat during the past decade. Finchem and chief commercial officer Tom Wade filled title-sponsorship spots with significant contracts.

At the same time, the PGA Tour started negotiating an extension of its TV rights deal, eventually extending its contract through 2021.

Much of this was done during a time when Woods was not playing a prominent role on Tour.

To question Finchem’s compensation is simple-minded, at best, and ludicrous, at worst. Ask the shareholders of General Electric. They have seen their share price fall by more than half in the past year and the dividend cut by 50 percent, and that might not be the end of the cutting.