PGA Tour signs 10-year deal with FedEx with one huge setback

The PGA Tour and FedEx have just signed a 10-year deal for the company to remain as the sponsor for the FedEx Cup Playoffs. While this deal is gaining exposure for its financial stability towards the Tour, there is a clause in the contract that may cause issues for players in the future.

FedEx has been a sponsor for the PGA Tour since 1985 at its first FedEx St. Jude Classic in Memphis. For over 30 years, FedEx has grown to be more than just a partnership for the Tour but a huge support system as well. The new sponsorship agreement reprises the contract that was built by the inaugural FedEx Cup in 2007.

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New PGA Tour commissioner Jay Monahan, believes this deal with the largest sponsor in the sport is a testament mostly to the players.

“To know that you’re in business with one of the greatest companies on the planet on a long-term basis is something that I think is a great testament to our players.

I think that’s what gives us the greatest sense of pride is knowing that the way our players comport themselves, knowing they’re relatable, they’re purposeful, they’re global and represent the game so well, I think lends itself extremely well to this announcement.”

The FedEx Cup is a season-long competition where players rack up points with each tournament for a chance to be a part of the playoff event post season. Established for the first time a decade ago, the 125 top-qualifying players attempt to advance through the elimination rounds of three tournaments, the last seeding a field of the top-30 point getters in to the four playoff event, the Tour Championship, where the FedEx Cup champion is crowned and awarded a $10 million bonus.

Source: Stan Badz

Obvious incentive for players to get points throughout the season. Past winners of the FedEx Cup include Tiger Woods (twice), Vijay Singh, Jim Furyk, Jordan Spieth and, last season’s winner, Rory McIlroy.

A decade of success surely warrants another decade of partnership. The FedEx tournaments currently offer $35 million in bonus money. No new numbers were disclosed in the extended deal, although Monahan said, “we expect the Cup and the payout to increase significantly.”

One major clause in the contract that wasn’t there when this all started in 2007, is the guarantee that FedEx remains the spotlight sponsor. What this means is that players who are/get sponsored by a competitor to FedEx will be penalized, and not eligible to compete in the playoff event.

“All I’m going to say on that front is when you’re in business with someone for 30 years, and you’re about to commit to 10 more, you do some things to protect each other on a long-term basis,” commissioner Jay Monahan told Hoggard.

“That’s what we’ve done in this agreement, and our players know that; our players understand it; our players think so highly of FedEx and what they’ve meant to them in terms of playing financial opportunities. So we do everything we can to protect our partners.”

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Fortunately for Lee Westwood and Louis Oosthuizen, who have sponsorship agreements with FedEx rival UPS, are to be grandfathered in. For any other golfer, who may get sponsored by UPS, will not have the same luck in matter.

As currently constructed, the player’s handbook only warns of agreements with companies affiliated with alcohol and gambling, but nothing regarding contention with potential tournament sponsors. Golfers are independent contractors, so for the Tour to be able to exclude players just by who they are sponsored by (aka put money in their pockets), can hinder extreme debate. FedEx is the sports largest sponsor, and for new players who may not have the caliber to gain such a prestigious name to back them, will be penalized.

Source: Twitter @upsers

This contract also alienates UPS, who still has a presence in the sport. The company currently backs two of the four majors as an International Sponsor for the Masters and the Official Express Carrier to the Open Championship. UPS is also the Official Logistics and Express Partner to the BMW Masters in China. So while the PGA Tour is ensuring business with one sponsor, they are jeopardizing the support from another. But again, like Monahan said, “you do some things to protect each other.”

For the future of golf, this contract is extremely comforting, for the future of some players and for UPS, not so much.