All of which would be bad news for the European
Tour in particular and cast doubt on its ability to
remain independent, risk being either taken over
by the PGA TOUR, or vulnerable to a hostile
approach from the Premier Golf League, which,
like Coronavirus, has certainly not gone away
or fall prey to one of the increasing number
of private equity actors, such as CVC Capital
Partners picking at the carcasses of struggling
sports.
Short-to-medium-term, the importance of the
43rd Ryder Cup proceeding as planned cannot
be underestimated in the context of the European
Tour’s ability to ride out the COVID-19 storm,
which some observers – this one included – view
as a �ght for independence and survival in its
current form.
An, ‘Away’ Ryder Cup is not as lucrative for
the Wentworth-based circuit as one staged on
European soil; the PGA of America is said to
take a 5:1 share of pro�ts when the event is on
US soil, but when the event is held in Europe, the
Wentworth is entitled to 60% of the pro�ts, just
under GBP25m (Approx. US$31m) from Paris
2018.
Given the four-yearly cycle of the Ryder Cup
on which the very �nancial foundations of the
European Tour are built, there’s one-year of
‘Feast,’ a ‘Home’ Ryder Cup, two of ‘Famine,’
two fallow years with no Ryder Cup whatsoever
(when heavy losses are incurred) and one year of
banking a �fth of the pro�ts generated by a USbased
Ryder Cup.
According to its of�cial accounts, the European
Tour Group, including Ryder Cup Europe, its
majority-owned trading vehicle for all matters
Ryder Cup reported a loss of £10.37m in 2017,
when Ryder Cup revenues would have been at
a four-year low, compared to a pro�t of £11.6m
in 2018, when the rewards of the Ryder Cup in
France would be included.
And, whilst not exactly awash with liquidity, the
European Tour sits on substantial cash reserves,
£22.7m in 2018 - down £1.9m on the previous
year - and it is likely those cash reserves will
have been signi�cantly eroded once 2019 / 2020
of�cial accounts are �led, re�ecting the loss of
bread-and-butter tournament income and an ever
increasing reliance on internal funding for ever
more tournaments.
Substantially higher costs and signi�cantly
lower revenues, never a good look, a recipe for
rationalisation and restructuring.
Hefty �xed costs, not the least of which, a wage
bill for its 270-odd employees – estimated
between £15m - £20m annually - won’t help
either, job losses in a slimmed down organisation
a distinct possibility.
But, for the avoidance of doubt, the Wentworthbased
out�t is not going under anytime soon.
However, for an organisation planning for its
Golden Jubilee in 2022, these are treacherous
times, senior leadership trying to navigate a
steady course towards calmer waters.
But, the loss of tournaments – some of which
it would not be unreasonable to speculate may
never return – together with a sports sponsorship
market already in decline before COVID-19
came along, with many economists suggesting
the 2008 �nancial crisis was modest compared
to a deep and lasting recession following in the
footsteps of the pandemic, the commercial future
of golf in general and the European Tour in
particular looks far from rosy.
Add into the mix a gradual but inexorable
decline in playing and watching golf over recent
years, the inevitable transatlantic migration of
the European Tour’s top talent, things down
Wentworth way may well get somewhat worse
before they see a chink of light at the end of a
very long, dark tunnel.
Postponement / cancellation of the Ryder Cup
could represent the genesis of a ‘Perfect storm’
from which it would take time, investment,
imagination and a large slice of luck if the
European Tour was to emerge intact and
unscathed, qualities not typically found in
abundance down Wentworth way.
Meanwhile, closer to home, the Asian Tour may
– perversely – �nd itself least affected by the
Coronavirus crisis, with several factors going in
its favour.
First, the Singapore-based out�t is – by necessity
– leaner and meaner than its larger rivals, carrying
a fraction of the �xed costs – especially headcount
– and overheads of the larger circuits, running a
tight ship by comparison, and, second, mainly
for reasons of climate, there is traditionally a
summertime hiatus on Asian Tour, meaning it has
only lost around half-a-dozen events.
And �nally, because Asia in general, and
especially South Korea and China were �rst into
- and out of - COVID-19 crisis mode, the Asian
Tour may be ahead of the curve in reclaiming lost
ground, and, in seeking sponsorships in the highsix
and low-seven-�gure sums, in the new post-
Coronavirus economic landscape.
Never mind sport, or indeed golf, life itself has
been changed - and beyond all recognition – by
COVID-19, socially, economically and culturally
both during and after the pandemic and how the
royal and ancient game – elite and recreational –
embraces change and adapts to the, ‘New normal’
will inevitably de�ne golf for a generation and
more.
So, watch this space, and hold onto your hats –
there could be testing, turbulent and tempestuous
times ahead.
GolfPlus JULY 2020 25