PONTE VEDRA BEACH, Fla. — The PGA Tour’s lucrative sponsorship extension announced this week with FedEx will apparently come with a costly stipulation for those who sign endorsement deals with competing delivery companies — the inability to compete in the FedEx Cup playoffs.
PGA Tour commissioner Jay Monahan said the 10-year extension of FedEx’s umbrella sponsorship that begins next year would have some new provisions that “protect each other on a long-term basis.” Golf Channel first reported that endorsement deals with FedEx competitors would preclude a player from competing in the lucrative playoff series that concludes with the winner receiving a $10 million bonus.
Agent Chubby Chandler of International Sports Marketing said such a provision was unclear in his dealings with the tour. Chandler represents Louis Oosthuizen and Lee Westwood, both of whom have deals with FedEx competitor UPS and wear the branding on their shirts. According to Chandler, those players would be exempt from the new rule due to their pre-existing contracts. (Westwood is presently not a member of the PGA Tour.)
But Chandler acknowledged the perils of putting such a stipulation in place and the fear of it leading to other restrictions.
“The tour [believes] that FedEx is different because it’s [a] much bigger [sponsor] than anybody else,” Chandler said Thursday at the Players Championship. “You can see BMW having a problem with Mercedes, for example. We had an issue like this in Europe about 15 years ago, and they sort of settled on as long as you didn’t have [logos] on headwear.
“It’s a tough one. I see both sides. FedEx is such a big deal, so if they toss in a couple of bits and pieces, you’re not going to say no. And FedEx knows it.”
FedEx has sponsored the PGA Tour’s season-long points racing and season-ending playoff series since 2007. The deal was set to expire at the end of this season, but a 10-year extension was announced through 2027.
Chandler said he learned a few months ago of the non-compete provision, but “they’ve been evasive as to what it is really going to be.” He believes any player endorsing a competing company — in FedEx’s case that would really be UPS and DHL — who competes in any PGA Tour event would doing so would be ineligible for the FedEx Cup playoffs.
The PGA Tour said it would not comment on that aspect of the contract prior to briefing the players fully on the matter.
“It’s certainly less than ideal,” said agent Mark Steinberg, whose Excel Sports agency represents several players. “It was clearly a part of the negotiation that the tour went through, and it was one of the last stumbling blocks. It certainly caused some consternation — amongst agents, amongst players.
Fortunately, it’s not in a space where there is a ton of business that’s been done with the competitors.
“I think the key here is that there is no slippery slope. That this doesn’t turn into the next big sponsor that blocks players. And the next and the next. That will be a massive issue. We’ve been assured that will not be the case, but it still provided some heartburn, for sure.”
PGA Tour players are considered independent contracts, which means they are not employees of the tour and are free to make their own deals — although within guidelines.
The FedEx commitment to the PGA Tour includes a $35 million bonus pool that is paid out at the conclusion of the season, with $10-million going to the winner and payouts all the way through the 150th-place finisher on the tour.
FedEx and UPS officials were unable to be reached.