Dusek: LIV Golf is wreaking havoc on equipment endorsement deals.
More than a century before Instagram Reels, Twitter takeovers and highly-polished YouTube videos started being made, Harry Vardon signed a deal with Spalding. The company paid him to tour the United States and play scores of exhibition matches using the brand new Vardon Flyer golf ball. That made Vardon, the winner of six British Opens, one of the first golf influencers.
In the years after he inked that deal in 1900, pros from Gene Sarazen to Jack Nicklaus to Joaquín Niemann have been signing lucrative sponsorship agreements with golf equipment companies.
The model for endorsement deals has not changed much since Vardon’s day. Companies pay players and supply them with equipment and technical assistance in exchange for the right to use their name, image and likeness in advertisements and commercials.
Players also agree to be involved in photo shoots, be available for a negotiated number of corporate functions and wear the brand’s logo on their bag, hat or shirt. Incentive clauses for things like winning a PGA Tour event, a major championship, finishing first on tour in driving distance and making a Ryder Cup team are also common.
Fulfilling the contracts is usually easy for pros because they just need to play golf, smile, shake a few hands and stay out of trouble, but with the emergence of the LIV Series, brands are being forced to reevaluate their marketing plans and reassess the value of players.
According to several brand insiders that Golfweek has spoken with, all of whom insisted on anonymity, golfers are typically obligated to compete in at least 15 to 18 PGA Tour events in a season to fulfill their endorsement contracts. If the player gets hurt, brands make accommodations and adjustments.
For elite players, reaching that threshold is easy. Last season, competing in the four major championships, the Players Championship, the WGC-Dell Technologies Match Play Championship, then at Rivera, Bay Hill, the Memorial and the three FedEx Cup playoff events would get you to 12 tournaments. Sprinkle in a few events in preparation for the majors and you’re set.
However, the PGA Tour indefinitely suspended golfers who decided to play in LIV Series events. Many high-profile (and high-priced) players who participated in the first LIV Series failed to play in 15 PGA Tour events last season.
Kevin Na played 14 PGA Tour events last season, Sergio Garcia played 13 and Dustin Johnson and Louis Oosthuizen each played 12. Lee Westwood played in 10, Bryson DeChambeau (who was injured for part of the year) played in nine, while Phil Mickelson played six.
Now, imagine you are the CEO or the head of marketing for an equipment maker. What would you do if a player who was contractually obligated to compete in 15 PGA Tour events, and who did not sustain an injury, signed with LIV Golf, knowing he’d be suspended, and only played 11 or 12? Are you holding the player in breach of contract and not paying him, maybe pro-rating his payment based on how much he did play? Or just paying out the whole thing?
“If you pro-rate, you risk pissing off the player or the agent and creating some bad blood,” said one insider. “And if there is a deal struck between LIV and the PGA Tour and golfers get to do both at some point in the future, you may have burned a bridge with a star.”
Clubs, balls, and equipment have been flying off the shelves over the last few years, so as lucrative as some endorsement deals are for star players, brands may pay golfers their full contract payment even if they failed to play enough.