Fact: The Ryder Cup is a licence to print money. Fact: The Ryder Cup is the heart that pumps the lifeblood into the PGA European Tour. Fact: The Ryder Cup is a cash cow but none of Europe's players are paid. Fact: Paul McGinley is not paid directly for his role as captain, but it is still a very lucrative position that could ultimately be worth between €1.5-€2million.
So, whilst Europe’s unpaid players and the USA’s men – who each receive $200,000 for their chosen charities – indulge in one game for the next three days in their quest to win the prized trophy, another game is also in play: the money game!
The simple fact of the matter is that the Ryder Cup is the single most important contract for the financial welfare of the sport in Europe, primarily thanks to television rights – with Sky Sports paying a fistful of euro to get their money's worth –- but also with other income streams that include sponsorship, licensed merchandise, corporate hospitality and ticket sales.
For this year’s event at Gleneagles, there are five official partners – Standard Life, Ernst and Young, Rolex, Diageo and BMW – who, it is believed, have each paid around €2 million for their corporate association. And, then, there are a large number of associated sponsors, ranging from Nespresso, official supplier of coffee, to Canon, official suppliers of imaging solutions. It all adds up to keep the European Tour’s coffers healthy.
As Richard Hills, the Ryder Cup director for the PGA European Tour, has described it, “it would be fair to say that the Ryder Cup is one of the financial locomotives of the tour. It is central to our television negotiations. The players very much know what they are playing or working for their own company, if you like.”
Indeed, there is a stark reality in the European Tour’s balance sheets in Ryder Cup and non-Ryder Cup years: it loses money in those years that there is no Ryder Cup, makes a profit in the years it is staged in the United States (receiving a percentage share from the PGA of America’s profits) and then makes a substantial profit in the years it is staged in Europe. The last time it was staged on this side of the Atlantic, in 2010 at Celtic Manor, it produced a pre-tax profit of €18 million.
This money, in turn, is used to support loss-making tournaments on the European Tour. Over the past number of years, one of those events to be helped out where the tournament purse has been subsidised by the tour.
Indirectly, being a Ryder Cup captain ultimately proves to be financially beneficial.
Although McGinley is not paid for the captaincy, receiving only expenses for his tenure during which he has travelled extensively and engaged in numerous promotional duties, the job is one of the highest profile in sports.
And along with this profile come many business opportunities and especially so in providing a platform for that profile after the captaincy. Going forward McGinley is likely to benefit in his golf course design work, media deals and his existing sponsorships are many and wide-ranging with The Doyle Collection, Sky Sports, EY, Rolex, TaylorMade, Allianz, Investec, clubstohire.com, Eligo, BMW, Ashworth and adidas all part of an impressive bluechip portfolio.
It’s all a far cry, it must be said, from the time when
revolutionised the captaincy. The Englishman tells of receiving £50,000 and “a crate of Johnnie Walker” for doing the job. It was in Jacklin’s run of captaincy that the Ryder Cup was transformed, going from a loss-making event to turn a small profit for the first time at The Belfry in 1985 and, since then, growing into the monster it has become.
And feeding it all are the players, every one of them millionaires – in whatever currency you like – who, for this week, play for free (if you are European) or for a donation to charity (if you are American).
Up to 1999, and the infamous ‘Battle of Brookline’, American players also played for pride and honour. Mark O’Meara possibly harmed his own future chances of getting the USA captaincy when he became the unofficial spokesman for the American players following Brookline on the issue of payment – or lack of it – and eventually the compromise of making a donation to chosen charities was reached.
Admittedly, although not paid, it is hugely beneficial for players to feature on teams and have that platform to enhance their own sponsorship deals.
Make no mistake about it, though, the Ryder Cup is vitally important to the health of the European Tour. Every four years, when played in Europe, it generates sufficient profits to make up for the leaner years.