SBJ/20100201/This Week's News

PGA of America posts $7 million profit

The PGA of America cleared more than $7 million from operations in its fiscal year ended June 30, 2009, the first operating profit it has posted since it last hosted a Ryder Cup.

The organization, which sees income spikes every four years when it hosts a Ryder Cup on U.S. soil, put on the event at Valhalla Golf Club in fiscal 2009 and at Oakland Hills Country Club in fiscal 2005. The PGA of America posted an operating profit of $15 million in 2005.

In the three-year stretch from 2006 to 2008, when it was without any U.S.-based Ryder Cups, the PGA of America lost an average of nearly $14 million annually on operations. The next Ryder Cup in the U.S. is scheduled for September 2012 at Medinah Country Club in Illinois.

Income from spectator events
Year Tournament revenue (000s) Tournament expenses (000s)
2009 $149,926 $101,867
2008 $76,945 $54,109
2007 $85,891 $58,540
2006 $70,902 $50,981
2005 $157,244 $109,739
Source: PGA of America

The PGA of America is a not-for-profit organization that represents the 28,000 teaching professionals in the U.S. The group stages the PGA Championship, one of four majors in men’s golf, as well as the Senior PGA Championship, Grand Slam of Golf and the Ryder Cup.

Revenue from spectator tournaments in fiscal 2009 was $150 million on expenses of $102 million, a $48 million profit that is roughly flat with the 2005 figures of $157 million in sales and $110 million in expenses.

Sponsorship income — which included patron-level deals with American Express, Royal Bank of Scotland and Mercedes-Benz, as well as a group of smaller partners — was flat at just more than $7 million. Losses on golf course operations rose from $4.2 million to $5.6 million. The PGA of America cut general and administrative costs by nearly $2 million.

None of the year-end figures include investment gains and losses, in order to give a clearer picture of operations. Annual fluctuations reported by the PGA of America represent the fair market value of its portfolio and not actual losses from the sale of stocks and bonds. Audited financial statements list losses of $32.6 million in 2009 and $10 million in 2008 on an undisclosed amount of total investments. The organization averaged $18 million in gains from investments over the previous four years.

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