The alarms are sounding at PGA Tour headquarters in Ponta Vedra Beach, Florida.
Not only because Jon Rahm bolted for LIV Golf, but also because the tour is losing a significant sponsor after the 2024 season.
Wells Fargo, which has sponsored the PGA Tour’s annual event in Charlotte, North Carolina, since 2011, will discontinue its partnership with the tour after the 2024 season, according to Erik Spanberg of the Charlotte Business Journal.
The Financial Services company wanted to stay on as a sponsor beyond 2024, but did not want to commit to the rising financial costs that the PGA Tour demanded, per Josh Carpenter of Sports Business Journal.
That, of course, is a direct result of LIV Golf, and the endless sum of money that the Saudi Public Investment Fund (PIF) has in its vaults.
The PIF has over $700 billion in assets, whereas the PGA Tour is a $1 billion not-for-profit.
Players on LIV compete for more money, with every 48-man event offering $20 million purses. LIV golfers also receive bonuses based on how their teams finish at these tournaments, too, truly raking it in without any corporate allegiances.
The Tour, meanwhile, relies on its corporate partnerships to help fund purses and bonuses.
But to counter the rise of LIV Golf, Commissioner Jay Monahan instituted “Signature Events” in late 2022 for the 2023 season. With these in place, Monahan hoped more players would stay loyal to the tour instead of jumping to LIV Golf.
However, like LIV, these PGA Tour events carry $20 million purses, have zero cuts after 36 holes, and employ smaller fields. The idea was to have more stars play in these eight tournaments throughout the year.
But the PGA Tour insists on sponsors covering a large percentage of these purses, which many companies—like Wells Fargo—are unwilling to do anymore.
Plus, these Signature Events will have more amenities for players in 2024, such as better fitness areas, greater bathroom accessibility, and improved food options. That only increases costs, something corporate dollars are not necessarily willing to pay.
But this is not the first time the tour has recently lost a significant sponsor.
Last year, Honda ended its relationship with the PGA Tour following its annual event in Palm Beach Gardens, Florida. Until 2023, the Japanese Auto Manufacturer sponsored this event since 1982, being one of the longest-tenured partners with the PGA Tour.
Next year’s iteration of this event is scheduled as ‘The Classic at The Palm Beach Gardens,” as a new sponsor has yet to be named—a troubling sign.
But so, too, is the news of Wells Fargo ending its relationship with the PGA Tour. After all, the Wells Fargo Championship was a Signature Event in 2023, and it will be once again in 2024.
It’s not known whether this development has any correlation to Rahm’s departure. But one thing is certain, the timing creates poor optics for the Tour.