The PGA Tour has eliminated the annual contribution with which players on the senior circuit accumulated rights for their retirement. The measure removes a savings route linked to participation and results.
From ten million dollars to eight. And from eight to zero. The PGA Tour has removed the annual allocation intended for the retirement programme of the Champions players, a decision that has provoked a strong reaction among its protagonists. Billy Andrade, David Toms and Scott McCarron consider that the organisation is turning its back on a generation that helped build the circuit from which their successors now benefit.
But, before getting to the anger, it is worth clarifying exactly what has been taken from them. It is the removal of new annual contributions to the programme, not a confiscation of amounts previously accumulated. Even when the cut from ten to eight million was made, that distinction was explained: money was not being removed from the existing fund, but the amount players could continue to generate through their results was being reduced. Now that allocation disappears.
That is, it has not been announced that a veteran already receiving a benefit will stop receiving it because of this decision. What is being removed is the new money that fed that retirement saving. And that difference, although important, has not softened the rejection of those who still expected to keep increasing it
How that retirement was built
The system did not consist of handing the same amount to all players for turning 50 or for belonging to the circuit. Players had to earn the right to take part in the distribution through activity and results.
Players earned credits towards their retirement by finishing among the top 48 in a tournament. In addition, they had to play a minimum of twelve events during the season to be eligible for the programme. Therefore, occasional appearances were not enough: the system also rewarded commitment to the Champions schedule.
Those credits were used to accumulate retirement benefits, separate from the cheque corresponding to the leaderboard position each week. A player could win money in a tournament and, in addition, have that performance contribute to their savings for the future. They were two different concepts: the prize for competing and the contribution for retirement.
The overall allocation was approved each year. The programme was born in 1985 with $250,000 and grew until it reached ten million. The first cut left it at eight million, a 20 per cent reduction of the annual budget. That did not mean that each player lost 20 per cent of a pension already accumulated, but that there was less money available for new contributions
How much did each player receive?
There was no identical pay for everyone that can be expressed as a common monthly amount. The individual contribution was linked to the credits earned and the money available in the programme. Hence why participation and results had consequences beyond tournament prizes.
The ten million — later eight — was the allocation for the entire programme, not a player’s pension nor an amount to be simply divided among 48 people. Position 48 was the limit to generate credits in each event, not the number of beneficiaries for the whole season. Different players could occupy those positions over the course of the year
When could they collect it?
It is also necessary to distinguish the moment when the rights were accrued and the moment when they were paid. It was not a second cheque handed over immediately at the end of each tournament. Nor should it be assumed that all Champions benefits were an identical life annuity.
A documented example is that of Al Geiberger. In 2013 he had started to receive his Champions benefit at 65 and finished at 75. In his case, it was an annuity for ten years, not a monthly payment for the rest of his life
The anger: money for the present, cuts for the veterans
With that context the protest is better understood. Players are not saying that all their pensions have been emptied overnight. They complain that part of their deferred remuneration disappears while the PGA Tour mobilises much larger sums in other projects.
“It went from ten million to eight and now to zero”, laments Billy Andrade, 62, and a three-time winner on the Champions. His criticism targets both the money and the recognition he believes veterans deserve.
“There are millions circulating everywhere for the Championship Series, for this series, for that one, for all those leagues this man —Brian Rolapp— is creating, and then they withdraw this money that was intended for the Champions players. These are the players who helped turn the circuit into what it is today and create the jobs enjoyed by executives and current players… It is a real crime“, he says to Golfweek.
David Toms makes a similar comparison: “On the PGA Tour they are playing for twenty million almost every week, and they can’t afford ten million for our retirement? In my view it looks very bad, and I think most of the players here feel the same”.
McCarron points directly at the organisation’s leaders: “What they have done to the Champions Tour players is absolutely terrible. Taking it away from us without more and without a way to recover it seems terrible to me. I am very angry with the leadership of the PGA Tour, especially with Jay Monahan and Brian Rolapp”.
The circuit’s response: fund itself by its own means
The leadership presents another perspective. Miller Brady, president of PGA Tour Champions, explains that the aim is for the circuit to be financially sustainable without depending on funding from the PGA Tour.
“We have reached the point of generating profits for the organisation and, if we can improve, we will be able to reinvest in ourselves. It may take time, but the financial performance of this circuit is as good as it has ever been”, he says. His priority, he adds, is to increase prize funds through higher-value sponsorship deals.
The Champions is distributing $69 million in prize money this season. However, current prize money and the retirement programme serve different functions: one remunerates today’s competition; the other allowed accumulation of benefits for later.
In the background appears the new corporate structure. Strategic Sports Group initially invested $1.5 billion in PGA Tour Enterprises, the commercial company linked to the circuit. Several players link the profitability demands of that model to the decision, although that connection is their interpretation, not an instruction from the investors evidenced in the reporting.
Not everyone reacts the same way. Paul Goydos, a former member of the Champions governing board, admits disappointment but understands the financial argument: “The PGA Tour is a business. Those in charge are trying to run it like a business. The accounts are what they are. You cannot spend at a loss. Is it disappointing? Yes. It is not good, but it is understandable”.
