By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
Mitchell hatched the Sportsband idea in 1986, and Rice eagerly signed on to the project. Golf tournament crowds seemed like a captive audience for closed-circuit radio broadcasts. But Mitchell saw that as only the beginning. As long as Sportsband had to buy equipment and hire announcers for its on-site broadcast, Mitchell figured the company could also sell its feeds to radio stations. Ultimately, Mitchell says, Sportsband would provide a full-service network of slick golf broadcasting specifically tailored for radio, where coverage had languished after television stations began airing tournaments live.
If the idea worked at golf tournaments, Mitchell even dreamed of some day expanding it to other sports, like auto racing. "I saw it as another Goodyear blimp," Mitchell says. "We would be able to roll into a sports event, set up, and provide this service. This was going to be a great corporate Trojan horse."
The first big step, of course, was obtaining permission to try out the idea at some golf tournaments, and that meant a trip to see professional golf's overlords in Ponte Vedra, just outside of Jacksonville in Florida. "We were a couple of unknown guys from Texas," Mitchell says. "Just a couple of guys who came down and said, 'Here's our idea.'"
Mitchell and Rice were seeking admission inside the gates of the PGA Tour, but they had no idea of the price to be exacted.
It might surprise you to learn that the PGA Tour is a nonprofit organization. In fact, the Tour is the only governing body of a major sport in this country that is not required to pay taxes. But the Tour isn't a nonprofit in the manner of, say, the Salvation Army, with volunteers standing on street corners clanging bells and asking for quarters to help the needy.
Rather, the Tour is quite a rich organization. In its 1995-1996 annual report to members, the Tour reported total 1995 revenues of $284 million, and projected that 1996 revenues would top $300 million.
The Tour doesn't have to beg people to throw quarters into its kettles. Companies practically line up to give it money. Television networks, for instance, pay top dollar to broadcast golf tournaments, and the Tour gets a cut of that money. In 1995, the Tour received $86.9 million as its share of the television rights. All that money was tax-free.
Through a for-profit affiliate, the Tour also owns golf courses across the United States that pour more than $70 million a year into the nonprofit entity's coffers.
The justification for the Tour's nonprofit status is the millions of dollars that professional golf tournaments raise each year for charity. Mind you, the Tour itself doesn't raise that money. Each golf tournament has a local organizing group--like the Salesmanship Club of Dallas, which runs the Byron Nelson. It is the local groups and their volunteers who sell tickets, work the tournaments, and generate the proceeds that are donated to worthy causes.
The Tour simply serves as an all-powerful facilitator of these local charitable efforts. It schedules tournaments. It finds big companies willing to pay to be designated as official Tour sponsors. But most importantly, the Tour delivers the golfers. Every pro golfer playing in the United States is under contract to the Tour and agrees to play in a minimum number of PGA tournaments each year. They cannot play in non-PGA events--or appear on television in non-sanctioned golf competitions--without the Tour's permission.
Credit for the Tour's power and affluence is largely accorded to Deane Beman, a middling golfer who took over as PGA Tour commissioner in 1974. Beman was the longest-reigning boss of a major sport in the country when he stepped down in 1994. Golf writers nervously took to calling Beman the "Dictator of Golf" because of his total control over the sport and ability to fine players who displeased him. Pro golfers had to agree in their contracts not to make any comments which reflected badly on the sport or the Tour.
In a searing 1994 series of articles examining Beman's tenure, Golf Digest described Beman as "management leader, labor boss, and commander in chief. He is the setter of policy and the exacter of fines. He is pro golf's judge, jury, and executioner. He is one of the least known but most powerful men in sport." (Beman could not be reached for comment by the Dallas Observer.)
One of Beman's first acts as commissioner was to reconstitute the Tour as a tax-exempt, nonprofit organization. Then he went on to exponentially increase the wealth and reach of his empire.
Under Beman, tournament purses and Tour revenues grew proportionally faster than the money raised for charitable causes. Beman increased the number of tournaments and created the Senior Tour for older golfers. He set up enviable health and pension plans for players. Beman made the Tour rich.
His reign sparked occasional rebellion and derision in some quarters. When the Tour began leasing a private jet to shuttle the commissioner about the country, disgruntled players dubbed it "Air Beman." Golfer Tom Watson told Golf Digest in 1992 that Beman "created an albatross of bureaucracy on tour. There are so many people involved and under salary to the tour...every time I go down to [Ponte Vedra], it looks like a new wing or a new building has been added on for administration."