Finding the Fairway: How the PGA Tour could Change the Sporting Landscape... ⛳️
The PTO's success in building community among its athletes through equity ownership serves as a compelling precedent for the PGA Tour, who in following suit, could disrupt the status quo of pro sports
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BIG IDEA
Over the past few years, the Professional Triathletes Organisation (PTO) has been rewriting the playbook for the sport of triathlon, introducing a business model that stands apart from its competitors.
One distinctive feature is that the PTO has operated under a commercial entity that grants its triathletes a 50% ownership stake in the league (with the remaining 50% held by investors).
Rather than taking from the world of professional sport, this innovative approach mirrors a structure more often seen in successful tech startups in places like Silicon Valley, where individuals benefit directly from the growth and profitability of the organisation.
This doesn’t mean that the PTO has taken nothing from professional sport, though.
Departing from the traditional path trodden by triathlon, the PTO has adopted a tour format reminiscent of professional tennis or golf. The organisation has also introduced a 'Team US' vs 'Team Europe' competition called Collins Cup, which has drawn comparisons to golf's Ryder and Solheim Cups.
Interestingly, the roles may now be about to reverse, with professional golf considering taking a leaf out of the PTO’s playbook.
The PGA Tour, which is in the process of finalising an agreement with Saudi Arabia’s Public Investment Fund over a tie-up with LIV Golf and Europe’s DP World Tour, has announced plans to offer equity to its top golfers.
Traditionally, as is the case in almost every major sports league currently, golfers have received compensation through salaries, endorsements, and performance bonuses. However, the introduction of equity ownership would fundamentally change this dynamic, aligning the interests of the players much more closely with the long-term success and growth of the Tour.
The PTO's success in building a sense of community and shared responsibility among its athletes through equity ownership serves as a compelling precedent for the PGA Tour - particularly given how fractured player relations have become since the introduction of LIV.
As well as fostering a collaborative spirit that benefits both individuals and the sport as a whole, the adoption of this approach by the Tour would be a significant first and seriously challenge the norms set and currently practiced by other established sporting codes.
While leagues like the NBA have conceded some ground on this front, recently approving a new collective bargaining agreement that gives players the ability to invest in NBA and WNBA teams, the NFL has adopted a rule that prohibits the giving of equity in franchises to its players or other employees.
Strangely, while the concept of employee ownership is not new, it is often overlooked (both inside and outside professional sport) - despite studies indicating its positive impact on productivity, growth, and business longevity.
According to numerous academic studies cited by Harvard Business Review, companies where at least 30% of the shares are owned by a broad-based group of employees, where all employees have access to ownership, and where the concentration of ownership is limited are more productive, grow faster, and are less likely to go out of business than their counterparts.
This is likely as equity ownership establishes a direct link between the financial success of the organisation and the earnings of its athletes, creating a sense of partnership. This encourages athletes to actively contribute to the league's growth and success, a sentiment echoed by PTO CEO Sam Renouf, who aptly noted,
“if you’re an owner, you operate differently to if you’re an employee… No one cleans their rental car, but if it’s your car, you look after it for the long term.”
(please remind me to never lend my car to Sam…😅)
As athletes express growing interest in investment opportunities, evidenced by the demand for funds like The Players Fund, Athletico Ventures, and Apex Capital’s Elite Performance Fund, leagues offering equity will become increasingly relevant - and even sought after.
George Pyne (Founder & CEO, Bruin Capital) recently suggested that this transition of current/ex-athletes into investing and entrepreneurship is the result of the increasing “power of personality,” particularly as a pull among younger, Gen-Z audiences.
“Look no further than the rumors of Caleb Williams seeking team ownership in his first pro contract,” states Pyne, for anyone doubting the trend.
“Real or not,” he continues, “a level of ownership (current or future) will be used as negotiating leverage over time.”
The PGA Tour's decision to offer equity to its top golfers marks a monumental step towards this reality.
By aligning athletes' financial interests with the success of the league, the move exemplifies a shift towards a culture of collaboration and shared responsibility, paving the way for a brighter and more inclusive future - one that will surely soon extend well beyond triathlon and golf…
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