HOYLAKE – The R&A is not ruling out taking money from Saudi Arabia’s national wealth fund as prize money in golf keeps increasing to the point CEO Martin Slumbers thinks the sport will have to reassess its business model.
The R&A runs the British Open, where the prize fund of $16.5 million this year is slightly double more than it was 10 years ago. The Open still has the smallest purse of the four majors.
The Public Investment Fund already is the primary source of money for LIV Golf, which offers $25 million in prize money at each tournament. The PGA Tour and European Tour last month reached an agreement with the PIF to pool commercial business and rights.
According to a PGA Tour official at last week's Senate hearing, PIF is expected to contribute more than $1 billion to the new partnership.
Is the R&A next?
“We have a number of large corporate partners that help us make this thing happen,” Slumbers said Wednesday. “I think the world has changed in the last year. It’s not just golf. You’re seeing it in football. You’re seeing it in F1. You’re seeing it in cricket. I’m sure tennis won’t be that far behind.”
PIF is involved in all those sports, buying 80% of Premier League soccer club Newcastle. Aramco, the state-owned oil and gas company of Saudi Arabia, is a global partner for F1 and for the International Cricket Council. It also sponsors a series of Ladies European Tour golf events.
“The world of sport has changed dramatically in the last 12 months, and it is not feasible for the R&A or golf to just ignore what is a societal change on a global basis,” Slumbers said. “We will be considering within all the parameters that we look at all the options that we have.”
Slumbers said Wednesday the oldest championship in golf is not interested in a sponsor that would appear in the title — that stays as “The Open Championship.”
The R&A, like the other organizations that run golf's majors, has plenty of corporate support from big companies.
Of greater concern is the spike in prize money.
The total purse was $7.8 million at Muirfield in 2013. A year ago, it was at $14 million. This year's winner gets $3 million.
The PGA Tour, before it proposed becoming partners with the Saudi backers of LIV Golf, elevated its top tournaments to $20 million purses and The Players Championship is $25 million. Scottie Scheffler, the No. 1 player in golf, already has topped $19 million in earnings with a month left in the season.
“Significant increases in prize money in the men’s professional game has resulted in the long-term reassessment of the business model for professional golf,” Slumbers said. “As custodians of the game, we have to balance the prize fund at The Open with ensuring the appropriate investment in grassroots and new golf initiatives.”
The R&A views its remit growing the game, and said it would be investing 200 million pounds ($258 million) over the next 10 years to promote the game at all levels. Its latest project is creating the African Amateur Championship starting next year.
The R&A already works with Augusta National and the USGA in staging the Asia-Pacific Amateur and the Latin American Amateur.
“There's no doubt that our ability to achieve this has been impacted by the much more rapid acceleration in men’s professional prize money than we had anticipated or planned for,” Slumbers said.
The Daily Telegraph reported that Yasir Al-Rumayyan, the governor of PIF who negotiated the proposed partnership with the PGA Tour, was expected to attend the British Open as a guest of a corporate partner. Al-Rumayyan is an avid golf fan.
Among the documents the U.S. Senate obtained ahead of its hearing on the proposed deal was a “wish list” for the start of a compromise. It included Al-Rumayyan becoming a member of the Royal & Ancient Golf Club.