The DP World Tour’s sponsorship revenue will see a 100% increase by the end of the year compared to pre-pandemic levels in 2019 as the organization’s strategic alliance with the PGA Tour and new commercial structure delivers significant early results, its group commercial director Max Hamilton has revealed.
The Europe-based body restructured its commercial model last year to match the PGA Tour’s after their tie-up in 2020, making the official marketing partner (OMP) category its top sponsorship tier.
In June, US whiskey brand Buffalo Trace Distillery became the DP World Tour’s first new OMP since its rejig, joining established major partners such as title sponsor DP World Tour, BMW, Rolex, HSBC, and Emirates.
In recent years, the DP World Tour has been working to increase its commercial revenue and bounce back from the financial impact of the Covid-19 pandemic.
Through the alliance, the PGA Tour also invests in the European organization and the collaboration is already bearing fruit, with the DP World Tour expecting further progress.
Hamilton revealed: “Our sponsorship revenue will see a 100% increase by the end of this year and that's very significant. Inclusive in that is selling our title partnership as well as deals with the likes of Genesis, FedEx, and Amgen.
“We've seen good examples of how we can collaborate with brands to benefit the tour, but it's [the new sponsorship structure] still very much in its infancy because we're only talking about a couple of years. There's so much more to play for and we’ve got strong momentum that we can take forward into 2025 and beyond.”
Since the strategic alliance was formed, several PGA Tour sponsors have also partnered with the DP World Tour, including Scottish Open title sponsor Genesis and logistics firm FedEx.
Hamilton believes the ability to partner with both tours delivers huge opportunities for brands to benefit from a global platform with which to activate.
He said: “We have a scalable and global platform for brands to think about and see if they want to partner with us and that wasn't the case necessarily a few years ago, where you would need to have chosen one or the other [the DP World Tour or PGA Tour].
“There's opportunity for scalability in this, which is important. There's huge opportunity in terms of offering a global solution to brands who want to use golf as their platform, and with that, a lot of flexibility. It's exciting in terms of what we can offer to the brands now through the alliance.
“We've reconstructed our tour in conjunction with the PGA Tour. From a commercial standpoint, there’s huge opportunity there, and we're already starting to see the benefits of it.”
Hamilton adds: “There were several focuses of the alliance but one was commerciality and seeing how we could work together. We've got some joint partners that operate across both tours.
“We identify international brands who might want to activate in international waters with us outside of the US and then we also look at categories where we may both have an opportunity, or we look at categories where just we have an opportunity on the DP World Tour and whether the PGA Tour could help us doing that.”
For 2023, DP World Tour’s sponsorship revenue was up 39% compared to 2022, while media rights income was up 23%.
The tour’s other recent commercial activity included a deal with fashion and lifestyle brand J. Lindeberg as official clothing supplier, while a long-term partnership with golf cart manufacturer Club Car was renewed earlier in the year.
Global bank HSBC was also extended as the title sponsor of the Abu Dhabi Championship.
The DP World Tour currently has seven OMPs, including Fortinet and Hilton, but is keen to expand that.
Hamilton said: “We are always evolving it. The PGA Tour has a lot more OMPs and depending on the category, they come at different levels of investment. There's a lot of room for us to grow in it.
“We'd love to get to a place where most of our partners were OMPs and activating and partnering with us more strategically than tactically, but we will always have room for more tactical agreements.”
Merger negotiations between the PGA Tour, DP World Tour, and Saudi Arabia’s Public Investment Fund (PIF) are ongoing after the trio failed to finalize a deal before their deadline of December 31 last year.
A framework agreement uniting the tours and the PIF-owned LIV Golf circuit was first announced in June 2023 and was initially slated to be completed by the end of that year.
According to the framework agreement, the for-profit assets of the three circuits will be combined into a new commercial subsidiary tentatively called NewCo. After an evaluation of those assets, the PIF, which owns 93% of LIV Golf, will make a minority investment into the new entity.
NewCo will be an umbrella for all future golf-related investments of the three groups and plans to create financial returns through “targeted mergers and acquisitions to globalize the sport.” The PIF, meanwhile, will invest in both the PGA Tour and DP World Tour as a “premier corporate sponsor.”
The delay in the partnership being concluded is largely due to an investigation by the US Senate over the nature of the agreement.
Following the conclusion of the recent BMW PGA Championship, the 2024 DP World Tour season has seven tournaments remaining. The next event - the Open de España - begins tomorrow (September 26) and runs until Sunday, while the season will end with the traditional DP World Tour Championship in November.
