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Measuring the ‘Tiger effect’ – doubling of Tour prizes, billions into players’ pockets
By Roger Pielke Jr. on August 6, 2014.
With the final Major of the golf season starting on Thursday at Valhalla Golf Club in Louisville, Kentucky, most of the talk in anticipation of the PGA Championship is about a player who almost certainly has no chance of winning, even if he were to play. I’m of course referring to Tiger Woods.
Woods reinjured his back last week at the WGC-Bridgestone Invitational leading to questions about his future – not just this week, but as a professional golfer. With Tiger on everyone’s mind, I thought it worth taking a look at his impact on the game, specifically Tiger’s role in boosting purses and the corresponding financial benefits to his peers.
From 1990 to 1996 the total purses on the PGA Tour increased from $82 million to $101 million, a respectable increase of about 3.4% per year. (All data in this post comes from PGATour.com and is adjusted to constant 2014 dollars to eliminate the effects of inflation). Tiger burst on the scene as a professional in 1996, winning 2 of the 8 events that he entered.
Before the Masters this year, Phil Mickelson explained what Tiger’s success and corresponding fame did to the game:
.“Look at what he’s doing for the game the last 17 years he’s played as a professional. It’s been incredible. .. I remember when I was an amateur and I won my first tournament in Tucson in 1991, the entire purse was $1 million, first place was $180,000 and Steve [Loy, my agent] and I would sit down and say, ‘I wonder if in my lifetime, probably not in my career, we would have play for a $1 million first-place check.’
“[Now] it’s every week. It’s unbelievable the growth of this game. And Tiger has been the instigator. He’s been the one that’s really propelled and driven the bus because he’s brought increased ratings, increased sponsors, increased interest and we have all benefited, but nobody has benefited more than I have, and we’re all appreciative. That’s why we miss him so much; we all know what he’s meant to the game.”
.The numbers bear out Mickelson’s observations. By 2008 purses totaled $292 million, representing an increase of 9.3% per year since Tiger joined the Tour. This difference in the growth in prize money from 3.4% in the years before Tiger joined the Tour to 9.3% in the years after can be called the ‘Tiger Woods effect.” I was curious as to what financial impact the “Tiger effect” had on his peers, so I looked at the data.
The results are astonishing. Tiger effectively more than doubled the prize money for every other golfer, adding billions of dollars to fellow players’ pockets. How can we demonstrate this?
Here is what I did. I considered all players who earned a pay cheque on the Tour in 2013. I then calculated their total earnings from 1997 to 2008 (176 players). I then calculated how much of those earnings were due to the “Tiger Woods effect” under the assumption that golf purses would have grown at the earlier rate of increase. I then subtracted this value from what they actually earned leaving a residual due to the “Tiger Woods effect.”
photo by New Brunswick Tourism, Wikipedia Creative Commons
