Putting the "Tiger Effect" into Context


#1

((I welcome sincere pushback and constructive criticism))

The True Tail of the Tiger Effect

In August of 2016, the golf world was in the sorrowful depths of withstanding a significant time apart from it’s most golden of children in the modern game: Tiger Woods. Ryan Harrington published “What Golf Looked Like Before Tiger Woods Turned Pro And Changed The Game Forever” for Golf Digest and wooed her readers with several impressive statistics. Sean Foley, Woods’ former coach, has been quoted as saying “I think when he came on the tour the purse was about $70 million and this year it’s $297 million. That escalation over 20 years is attributable to one person’s influence." But where Harrington and Foley err - and where many err in their laud of and admiration for Woods – is in looking at these statistics in a vacuum seemingly in order to bolster the messianic Woods narrative.

One of the most relevant (but possibly not as praiseworthy for Woods) interdisciplinary points is to compare the monetary statistics of the PGA Tour with those of other professional sports. This gives us an idea of how the sports entertainment business has changed – and in reality thrived as if one cohesive unit – in America. For this exercise in factual rhetoric, let’s choose an arbitrary date that just happened to be brought to attention by a social media post of Curtis Strange’s: 1988.

30 years in the past marks a reasonable starting point for two reasons: the four major American leagues in question (the NBA, MLB, NFL, and PGA Tour) were all being widely televised and were all comfortably lucrative. To preface, our comparisons of these years and leagues will be predicated on the basis of an inflationary rate of 114% percent, from 1988 to 2018. In some instances, modern average salaries of the professional sports leagues may be taken from years just adjacent to 2018, which in no way inflates the results (in some cases, it could actually deflate them). So, let’s dive right into the landscape …

In no later than 2016, the average salaries for these American leagues were as follows:

National Basketball Association: $6.2 million

Major League Baseball: $4.4 million

National Football League: $2.1 million

These organizations’ pay rate looked staggeringly different in 1988 (adjusted for inflation in secondary column) …

NBA: $530,000 $1.13 million

MLB: $240,000 $512,000

NFL: $440,000 $940,000

When each of these historical figures is compared to its contemporary, we get overall “wage” increases of:

NBA 5.4x

MLB 4.6x

NFL 4.1x

Now let’s turn the lens to the PGA Tour. In 1988, the average purse for a Tour event was roughly $750,000. Adjusted for inflation, that is $1.6 million per tournament. In 2018, we see what appears to be a staggering increase, with PGA events awarding $7.4 million per tour stop. Until …

7,400,000 / 1,600,000 = 4.625

The PGA Tour’s rate of “wage increase” is commensurate with and mirrors that of professional sport in America in general over the last 30 years. Is this to say that Woods had nothing to do with it? Absolutely not. But none of the other professional leagues detailed above have been willing to lay late 20th/21st century success at the feet of one man. So who’s responsible in the other major American sports? Or, because that line of logic fails to check out, could it be that the rise in PGA Tour prize moneys has been due to, in large part, a natural increase in the valuation of the landscape of American athletic entertainment?

But it is not at all difficult to anticipate the sentiments of those who hold Woods near and dear to their golfing identity. “How can you deny that Woods ushered in a new era of the PGA Tour?!” … “Look at the money these guys are making now! That was never the case before Tiger.” The irony is that, not only were there periods of very similar rates of growth in Tour moneys, but also the “Tiger Era” does not even represent the largest era of growth.

Let’s draw back thirty years B.T. (before Tiger) and examine the growth rate there. In Harrington’s article, it is stated that the average first-place check in 1996 was roughly $263,000. The average first place check over 40 Tour events conducted in 1966 was roughly $11,480. Again, adjusting for inflation from ’66 to ’96 at prescribed rate of 384%, our ’66 first-place figure comes to $55,600, representing a growth of 4.74x . If you recall, only a few paragraphs ago was it shown that the supposed amazing era of growth on the PGA Tour ushered in by only Tiger Woods grew at the rate of 4.63x.

Head back even further, and the results are ever more interesting, but unfortunately the data with which to play is more scant. To illustrate the rate of increase from 1936 to 1966, we can rely on two record sources; one being the reported first-place prizes for our modern Majors (omitting the British Open because of its paltry amount), and two being the wins of Sam Snead, which totaled 13 from 1937 through 1938.

The most lucrative championships in the United States in 1936 (the US Open, the Masters, and the PGA Championship) averaged champion pay-outs of $1,166. In 1966, these same events averaged $23,800. After adjusting for inflation (1,166 x 2.33), this represents an increase of 8.76x . To put this in perspective, these same events saw average growth rates of 3.7x from ’66 to ’96, and 5.59x from ’88 to 2018.

But indeed, this is a small subset of tournaments played during both years. However, we can also look at the evidence put forth by Snead’s victory records. Slammin’ Sammy, over the course of 13 events from 1938 to 1939 (none of which were “majors”), averaged a winning payday of $1,200 – and this figure includes a massive $5,000 check at the “West Chester 108-Hole Open”. We’ve already determined that the average first-place finish in 1966 earned you $11,480. With Snead’s earnings adjusted for inflation (1,200 x 2.33) and compared to the average prize in ’66, we see a growth rate of 4.1x . If you remove the outlier of the $5k payday (unheard of at the time and most likely a large promotional stunt carried out by very wealthy men), our growth rate then comes to roughly 5.6x .

So, in review …

                  **Growth Rate             Major Growth Rate**

1988 – 2018 ----------------------- 4.63 -----------------------------------5.59

1966 – 1996------------------------4.74-------------------------------------3.7

1936 – 1966-------------------4.1 – 5.6---------------------------------- 8.76

It is undeniable that the modern PGA Tour professional has the opportunity to earn more money than ever before. What is clear, however, given the statistical evidence that is laid out above, is that the modern gorging of tournament purses cannot, as Foley asserts, be “attributed to one person’s influence”. After all, the numbers were in motion long before we heard “Hello, world.”


#2

I must be missing something - but using your numbers I arrive at the following multiples?

NBA (5.5x)
MLB (8.6x)
NFL (2.2x)


#3

As silly as it is for Foley or anyone else to give Tiger full credit for the influx of cash into the game, I think it’s equally silly to look at strictly PGA Tour purse size to evaluate Tiger’s impact on the game. A couple things stand out to me. First and probably most important would be tournament attendance and its impact to the communities and charities involved with those tournaments he plays in. Tiger committing to a tournament literally requires infrastructure changes for these events. There are countless articles/interviews with tourney directors discussing the impact of getting Big Cat to play their event has. The second big one is the endorsement deals these guys now have. I’m comfortable believing Tiger was a singular game-changer in both those areas and that each has a vastly bigger annual economic impact than the inflation-adjusted delta between the annual purse sum in 1988 versus today.


#4

I’m going to have to go back and look at the numbers, because you’re right. What I have typed out here isn’t correct. It might be possible I adjusted one too many times, but thank you!


#5

Again, when viewed in a vacuum, it may very well seem like an increase in endorsement moneys means a great deal. But I’m the context of the American sporting culture as a whole, I doubt it’s that far out of line.

Also, I’d give more credit to Arnie than Tiger if we do have the vacuum discussion.


#6

Ahhh, I quite possibly flipped MLB and NFL wages from 88 accidentally.


#7

Arnie and his team absolutely had a huge impact in that regard. Probably moreso than Tiger since he was the first-mover, really. But Tiger spurned the next big growth wave in those endorsement dollars in my opinion. And Tiger’s impact on attendance and viewership, both overall and when he’s playing, completely dwarf the sponsorship deals. I just mentioned the endorsements because it’s money the players make beyond the tour purse comparison and I do think they have Tiger largely to thank in that regard. Reason number 1 being Nike doesn’t move into golf without Tiger (certainly not in the manner it did, anyway)…and Nike becoming a player in that game absolutely changes everything.


#8

I’d be interested to see data backing up both claims, especially in juxtaposition to other professionl sports.

As far as attendance and sponsorships of events go, again, data is king, but I’d be inclined to side with you. HOWEVER, I’d also like to see the evidence of a severe drop in Tiger’s absence… and not of just of television ratings. I’ll fully concede the TV numbers haha.


#9

One other metric would be the growth of golf courses getting built and overall participants during this Tiger explosion. The market became flooded and we’ve now reached the other side of this where participation has leveled off and courses that got built, have closed down.


#10

I’m not going to dig up any numbers regarding a tiger effect that’s not on a realistic timeline either. The tiger effect can only reasonably be considered on a timeline of 1997 or more realistically 1998 forward.

PS, this thread answers the question of “what would I do my thesis on?” If I ever bothered with an MBA, so thanks for that!


#11

Many of those courses were a result of reports put out and the economic boom in the late 80s, early 90s. Most do not coincide with Woods, in my opinion.


#12

This was a super interesting read. In my ignorance I was a Tiger Effect guy, thinking it was him and him alone for the increase in money on tour but in fact, I completely see the sports industry as a whole really sky rocketed the last 20-30 years and Tiger was a part of the majority of those years.

What’s hard is how to capture the “cool” factor of Tiger. How many more kids, including myself, play the game because he made golf cool. The money is the only hard number (and maybe viewership) that quantifies that factor but I see how flaws in that exist when considering inflation and the American sports industry.


#13

I didn’t feel like looking up the numbers myself so I found someone that already did. If we want to evaluate a tiger effect this seems a more appropriate look at it in terms of timeline.

Sometimes the obvious answer is the right one, I think that’s the case with tiger and money in golf.

http://www.sportingintelligence.com/2014/08/06/measuring-the-tiger-effect-doubling-of-tour-prize-money-billions-extra-into-players-pockets-060801/


#14

That’s a great find. The jump from 3 to 9% is pretty convincing. Even more so is the decrease post 2008 when he went through everything. Talk about being the damn needle. Will be fun to revisit in coming years to see how it tracks with his peaks and valleys.


#15

Some day when I’m bored I’ll dig into the attendance and viewership angle. Generally speaking, TV deals are what drive pro sports compensation. I’m guessing there’s pretty irrefutable evidence Tiger drove viewership higher, and thus the value of the TV deals, to a greater extent than all other factors combined. For me that would be the actual proof that tiger really is almost singularly responsible for the explosion of money in golf.

I actually believe the decline is primarily driven by the recession that coincided with his turmoil, but his issues could have contributed as well.


#16

I wouldn’t discount the recession in favor of “Tiger Turmoil” … historically speaking, we’ve seen several situations where a failing market had a terrible effect on golf


#17

I have not read the entire article, but it leads with “evidence” that I directly refute with my initial information. Again, I’d never deny that Woods had an impact, but the author tries to directly assert “Tiger effectively more than doubled the prize money for every other golfer, adding billions of dollars to fellow players’ pockets.” … This claim is totally hyperbolic and, again, is a result of looking at the game’s purses through a singular lens.


#18

In terms of the total purse analysis the guy did basically the same thing as you, except he used a timeline that’s actually appropriate for at least attempting to extrapolate a “Tiger Effect”. Was really only interested in the numbers.

Big picture I don’t think we really disagree. Tiger had a massive impact financially on the game of golf; but I agree he’s not 100% responsible for every last bit of cash influx.


#19

I think we’re in the same ballpark, but my main thesis - and the fact that the numbers historically back up - is that "… the numbers were in motion long before we heard “Hello, world.” "

And yes, he did almost the same thing, but he offers no historical perspective or similar-industry perspective. Again, looking at all this in a vacuum leads people to believe a correlation is truly causation. Also, he credits the fall-off in purse increase solely to Woods’ absence post-2008 without even alluding to one of the worst recessions the country has ever experienced. C’mon, now …

It has been my assertion for many years that people lay a hyperbolic amount of credit at Woods’ feet because of their emotional connection to him, all the while usually ignoring the eras and golfers that really laid the groundwork (… which is where more of my emotional connection lies. It just so happens the numbers back it up.)

E.G. - If Tiger has inspired a real, lasting passion for the game and made golf “cool” - like many would default to believing - why do reports indicate a steady decline in American participation from the mid-2000s on? https://www.statista.com/statistics/191907/participants-in-golf-in-the-us-since-2006/


#20

“The National Golf Foundation, in a moment of bear market lunacy, once issued its famous “one course a day” prediction on how many new courses would have to come into existence to satisfy the startling demand of the late 80s.”

In 2016, for instance, 190 courses closed.

Also, as far as participation is concerned, refer to the statista link I posted. Those numbers would tend to refute the idea that the Tiger era brought a huge influx of participants into the game AND KEPT THEM IN THE GAME