Posted on 01/31/2022 12:24:28 PM PST by Kaslin
The PGA Tour has temporarily avoided a battle royale with its membership over the decision by a handful of golfers, including current world No. 3 ranked Dustin Johnson, to play in the Saudi International, an Asian Tour event set to take place in February at the same time as the Pebble Beach Pro-Am, one of the PGA Tour's most high-profile events. This did not sit well with the PGA Tour, which initially drew a line in the sand, declaring it would not grant the necessary releases and threatening fines, suspensions, and potential lifetime bans for players who chose to participate in the Saudi event.
However, in late December, the PGA Tour granted the releases, but with conditions attached—the golfers must commit to play the Pebble Beach event at least once, and in some cases multiple times, in the next few years. Confident in the tremendous amount of power it wields over the sport and the players, the PGA Tour is clearly flexing its muscles. Yet its actions raise red flags about the organization's nonprofit status and its monopolistic dominance in the golf world.
The PGA Tour is classified as a business league under Section 501 (c) (6) of the Internal Revenue Code, which allows it to obtain coveted nonprofit status and receive all the accompanying benefits, namely exemption from paying taxes. A business league is defined as "an association of persons having some common business interest, the purpose of which is to promote such common interest."
In short, they do not operate for profit. Organizations with this classification are not allowed to have net earnings that benefit any one shareholder or individual. Still, they are permitted to distribute cash "where such distributions represent no more than a reduction in dues or contributions previously paid to the organization to support its activities." It is a point that is challenging for the PGA Tour to defend, given it has lavished millions more on executive compensation than on direct charitable contributions over four years.
Padding the wallets of executives is hardly in line with the PGA Tour's claimed commitment to charity, just as steamrolling other golf tours runs counter to its claim of promoting the common interest of professional golf. Furthermore, its IRS Form 990 states that the organization also promotes professional golf by "provid[ing] opportunities for the touring professional golfer to compete and earn prize money and benefits." If that is indeed the case, why stifle players' opportunities to do just that by putting up roadblocks?
In addition to these questions, the PGA Tour's dominant and looming presence over the golf universe and its impact on the game and players raises the question of whether the organization complies with a federal statute prohibiting activities that restrict interstate commerce and competition in the marketplace.
Monopoly power is a prerequisite for a violation of the century-old Sherman Act. And while monopoly status in and of itself is permissible under certain circumstances, it is a violation to willfully acquire or maintain that power.
In that context, it is reasonable to question the PGA Tour's efforts to stop its members from competing in another league —first with lifetime ban threats, then with releases with strings attached. Requiring releases, conditional or otherwise, undoubtedly gives the PGA Tour the power to torpedo competing tournaments, as players will be leery of risking the organization's wrath by participating. Without top golfers playing, rival organizers would be hard-pressed to draw media attention and sponsors, making it difficult to have a successful tournament.
Antitrust allegations are nothing new to the organization. Back in the 1990s, the Federal Trade Commission (FTC) concluded that the PGA Tour violated antitrust laws and recommended the federal government act, citing the requirement that players get permission to participate in non-Tour events as one of the reasons. The FTC eventually backed down, but times have changed. And as Facebook and Google can attest to, lawmakers are more inclined to crack down on anti-competitive behavior.
In an indication that it has no desire to loosen its grip on the sport, the PGA Tour noted that the conditioned releases for the Saudi International were not considered to be "precedent setting." The organization is well aware that golf is struggling to keep up with more popular leagues as viewership is dropping and participation has stagnated.
Perhaps the PGA Tour can take a few lessons from the NFL, America's most popular sports league. The NFL was born in 1966 when the National Football League and the American Football League ended their bitter rivalry and merged into one league. Then, 50 years later, the NFL abandoned its tax-exempt status after persistent questions over why a multi-billion-dollar business should be tax-exempt.
It's long past time for the executives at the PGA Tour to live up to the organization's mission to promote golf for the sake of the players, the fans, and the game itself.
I don’t care.
Well, where else would you draw a line for a tournament in Saudi ???
Hear are some of the “celebrities” that will be playing, no wonder DJ wants out.
Bret Baier — Lefty News anchor
Don Cheadle — outspoken liberal progressive Actor
Bill Murray — Liberal Actor and comedian
The funniest part of this article is that DJ is ranked 3rd.
The sand traps in Saudi must be awesome!....................
The PGA is a “non-profit”? That’s hilarious. It wallows in corporate money.
All types of “non-profit” status should be ended. People will still donate to actual charities that help truly needy people. “Non-profit” status is just a way for the government to exert control by granting and getting favors.
In short, they do not operate for profit......Nor does the NFL.
What they do, though, is use their non-profit status to shower the employees with insane pay and benefits and the league pays 0 in taxes.
No different than “non profits” whose officers make insane amounts of money, but not too many ever seem to ask where the money is supposed to go. If you do, you don’t care about the starving kids in Africa.
Just watch the most recent episodes of This Old House. The wife runs a non-profit. And the couple were so kind, caring and compassionate that they were saving the old kitchen cabinets to they could be sent to a deserving family in Haiti. And folks believe that BS. Of course, no one questions how much money the ‘non profit executive’ makes to afford, what I’d say was a $400-500-18th century farm house and then dump, at least, $500k into it. With every imaginable accoutrements...heated floors throughout, an insane addition with floor to ceiling glass, you name it.
And of course, the typical Occupy Wall St moron, cannot fathom or understand why companies like GE and Amazon pay ZERO corporate taxes.
IIRC, the Saudis pay 7-figure appearance fees in advance of any other winnings a competitor may earn.
As opposed to Pebble Beach, where the golfer is charged an entry fee.
Nothing like the free market at work.
I watch golf, and I have never cared for the “Pro-Am” aspect of the Pebble Beach tournament. I don’t care to see any of the “stars” and has-beens take up screen time. I only want to watch the professional golfers.
same for me. I think that it is a huge money-maker for the PGA Tour
I am not a golfer, but one of my more memorable days was on a spouses tour bus where we pulled into the country club at Pebble Beach for a short visit. It was maybe 10AM, and the CEO’s wife turned to me as we entered the parking lot and said “I bet they make a great Bloody Mary.” I replied “I think you’re a genius, I bet they do, too.”
They did. There is little nicer than looking out over the course, and the water, from the clubhouse bar, with a proper Bloody Mary in hand.
The poor spouses, of course, were in a room with no windows doing the board meeting thing.
Neither my wife nor I golf, but she always talks about how she'd love to visit the beautiful course at Pebble Beach. Your view with the breakfast of champions in hand sound like it was splendid.
“PGA Tour’s efforts to stop its members from competing in another league.”
Dodgers and Yankees have been dealing with players for over 100 years. PGA needs to learn quickly and catch up.
decades ago I was in the San Mateo area on a due diligence meeting day off. The group of 40-50 had to decide if they wanted to play a round at Pebble Beach or tour the Sonoma vineyard country and stop at 3-4 vineyards. Only two of us wanted to golf, so we toured the wine vineyards. Memorable for the wrong reasons.
I assure you, with this crew there was plenty of wine involved, and good stuff. I think we were actually staying in Monterey, and I’m sure we went to some of the Carmel Valley vineyards on one of the days.
I assume the PGA operates pretty much the same way.
Do the pros have any say in who they get paired with?
Many years ago, I played the pitch-and-putt par 3 course across the street from the famous Pebble Beach course. Beautiful views of Carmel Bay and the mountains at a bargain price. This was before Tiger Woods got involved in designing The Hay.
http://www.montereypeninsulagolf.com/Peter-Hay-Golf-Course
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