Key Points of Possible PGA Tour and European Tour Merger

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Key Points of Possible PGA Tour and European Tour Merger
Ross Kinnaird/Getty Images
Are European Tour CEO George O'Grady (left) and PGA Tour commissioner Tim Finchem talking merger?

It has been rumored in golf circles over the past month that the PGA Tour will purchase or merge with the European Tour. Golf Channel’s Rex Hoggard reported on August 13 that PGA Tour commissioner Tim Finchem called reports of a proposed bid to buy the European Tour, “inaccurate.”

Hoggard had cited reports posted in the Daily Mail and Daily Telegraph that mentioned an “audacious bid” made by the PGA Tour to purchase the European Tour.

With Tiger Woods, television coverage, corporate sponsorship and large tournament purses, golf has become a global game.

The LPGA Tour has been a leader in global expansion, with many events held outside the friendly confines of the United States in far-off places such as Asia, South America and Europe. Annika Sorenstam from Sweden, Mexico’s Lorena Ochoa, Yani Tseng from Taiwan and South Korean Inbee Park have dominated the No. 1 spot on the Rolex Rankings over the past 20 years.

The PGA Tour has made business moves over the past year that has pushed its game outside U.S. boundaries with the purchase of the Canadian Tour and birth of the Latinoamerica Tour in 2012.

Top European players have embraced the PGA Tour and, just like Jed Clampett, have uprooted their families and moved to America for the lucrative PGA Tour.

Lee Westwood, Rory McIlroy, Graeme McDowell, Justin Rose, Luke Donald and Ian Poulter all have residences in Florida and play full time on the PGA Tour. That is a lot of star power missing from the European Tour on a regular basis.

When Tiger Woods joined the PGA Tour in 1996, the total amount of prize money available on the PGA Tour was slightly less than $80 million. With the addition of the FedEx Cup playoffs and bonus pool, the total amount of prize money available in 2013 has grown to over $300 million.

Who can blame the European stars' defection to America? Top 10 finishes on the PGA Tour provide a very nice living for a professional golfer’s family.

One of the biggest keys for the PGA Tour wanting ownership of the European Tour is the Ryder Cup. The five largest golf events, the Masters Tournament, the U.S. Open, the Open Championship, the PGA Championship and the Ryder Cup are all owned by someone other than the PGA Tour.

One of the main assets the PGA Tour covets is a piece of the Ryder Cup.

The PGA of America and the European Tour jointly own the Ryder Cup. A purchase of the European Tour by the PGA Tour would give Tim Finchem and the PGA Tour a piece of one of the richest tournaments in golf.

After the 2013 Tour Championship, the PGA Tour season will officially end and the 2014 PGA Tour season will begin with the Frys.com.

Six PGA Tour events will be held in the fall of 2013, offering prize money and FedEx Cup points that count toward the 2014 FedEx Cup rankings. Two of these tournaments visit Malaysia and China. The PGA Tour understands that the growth of golf must embrace Asia and the millions of golfers it can woo to buy new TaylorMade, Titleist and Ping equipment.

Purchase of the European Tour would enhance and expand PGA Tour exposure in Asia. The European Tour already visits Asia for two events, plus it jointly sanctions the WGC-HSBC Championship in Shanghai.

The European Tour also visits the Middle East with tournaments in Qatar, Abu Dhabi and Dubai. Several PGA Tour players annually begin their season in the Middle East and earn large appearance fees.

With the European Tour’s biggest names playing in the FedEx Cup playoffs to earn a piece of $67 million, it struggles to attract sponsorship money. European Tour fields suffer and are in danger of becoming a developmental tour for the PGA Tour.

The PGA Tour needs to expand worldwide and the European Tour needs the strength of the PGA Tour brand.

European Tour and PGA Tour officials deny any pending deal, but where there is smoke there is fire.

A merger or outright purchase seems to be in the best interest of all parties involved.

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