Weekly Column: Off-the-Field Performance based incentives for Athletes

In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about the PGA Tour's Player Impact Program that has netted golf icon Phil Mickelson a $8 million reward for his off-the-course engagement.

You can read the full column below.

The Player Impact Program for the Professional Golfers’ Association (“PGA” or “Tour”) Tour may be the first of its kind to reward an athlete for performance off-the-field, e.g., not in the box score or on the scorecard. Golfing icon Phil Mickelson just netted himself $8 million for his work in 2021—specifically for driving media and fan attention to the game of golf. The measurables are based on predetermined analytics to show engagement.

Engagement, the all-important word in social media influencing and the growth of name, image, and likeness (“NIL”) in college sports and beyond that is now driving additional monies to athletes’ pockets. The PGA’s Player Impact Program is rewarded to the player who drives the most fan and sponsorship engagement to the game. The reward is also given to players who come in second and third place, and so on and so forth. The reward is also given regardless of performance on the course.

The new profit-making arrangement makes sense for a few reasons. For one, with Apple and Meta (Facebook, Instagram) vying for tech and health innovations and tracking devices that will inevitably be used to track fitness and performance on the court, field, or course, there should be tracking measurements for off-the-field success. After all, it is the players, coaches, and staff that make sporting events happen and that leads to media attention, fan, and sponsorship interest. Tracking will help the athletes and teams drive traffic to other areas and other profitable endeavors with brands.

Second, the interesting caveat here is that on-the-course performance is directly tied to off-the-course performance. Phil Mickelson had a very successful year on the Tour so that led to interest during matches and beyond. If Mickelson had not played well, there would be less interest.

However, third, there are iconic superstars that can drive media, fan, and sponsorship engagement even when struggles are apparent. For example, second place in the 2021 PGA’s Player Impact Program went to Tiger Woods ($6 million). By his own admission, Woods did not have a great year on the course. Nonetheless, Wood’s popularity and the media attention he brings warrants compensation for the impact he brings to the game.

Lastly, it makes sense that the players who are leading the fan and sponsorship engagement, or even garnering media attention that leads to higher purchase prices for media rights to stream and/or broadcast games and matches, be compensated for their success and efforts. In many ways, it is an additional bite at the apple for athletes. It is also a marketers dream to have access to data and insights to help future campaigns and for brands to divvy out endorsement dollars to athletes.

The new PGA Tour model is something that other sports leagues could follow. For example, a bonus or reward for landing on the cover of Madden, for leading in social media engagement, or for consistently leading in viewership ratings or streaming minutes/views. There are many other measurements, but it is somewhat of a drive to give athletes more ownership over their success and compensation. The National Basketball Association (“NBA”) nearly splits leagues revenues between the owners and the players pursuant to the collectively bargained agreement (“CBA”), between 49-51 percent, and any movement towards further compensation in sports is in that same vein.

The PGA may be doing this for competition. The PGA may also be a first mover in the space of compensating athletes for off-the-field performance in driving attention to the game. It is certain that players associations and owners will be looking to this new area of compensation in upcoming CBA negotiations.

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clientele in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.