Norman says golf prize money will drop
Greg Norman, a two-time major tournament winner and former No. 1 golfer in the world, said purses for PGA Tour events will shrink because of the global credit crunch.
PGA Tour prize money, which comes largely from the sport's television contracts and sponsorships, has almost tripled to $280 million annually during the 11-year Tiger Woods era.
This year, 27 tournaments had a winner's paycheck of more than $1 million. At the same time, the PGA Tour has 11 title and three presenting sponsors from the financial-services industry, which has been embroiled in the worst financial crisis since the Great Depression.
"There will be a correction," Norman said in an interview with Bloomberg Radio's "On the Ball" program that will air this weekend. "I can't see anything other than that because prize money can't keep going up at the exponential rate that it has been going for the last 15 years. I don't see that taking place anymore."
The 53-year-old Australian is the chief executive of Great White Shark Enterprises, a privately held company that counts golf course design, apparel, golf equipment, wine and residential development among its business interests.
PGA Tour Commissioner Tim Finchem said last month there hasn't been any "major damage" from a sponsorship standpoint.
"Clearly, if the instability were to continue for a sustained period, we'll have real challenges," Finchem said at a news conference.
• About 15 PGA Tour events have sponsorship deals that expire after the 2009 season. Deutsche Bank AG, Morgan Stanley, Wachovia Corp. and Northern Trust Corp. are among financial-services companies that sponsored tournaments this year.
If a sponsor decided to end its contract, the PGA Tour could draw upon operating reserves until a replacement was found. Additional market declines may shrink the sport's reserve that's built on investment income.
"Golfers will probably feel it a year, two years down the line when corporations have to come in and renegotiate," said Norman, a two-time British Open winner. "Instead of being the title sponsor for $8 million, the title sponsor might be less than that. There will be some effect on the game of golf."