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FedEx corners the express delivery market on the PGA Tour

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FedEx and the PGA Tour have reached a 10-year agreement for the express delivery company to sponsor the Tour’s season long points race, which culminates in the FedEx Playoffs and a $10 million paycheck to the winner. This agreement has also allowed FedEx to drop the hammer on its competitors in the shipping market; players who are sponsored by competing company’s will not be allowed to participate in the season-long competition.

Players who would be immediately affected by this clause include UPS-endorsers Lee Westwood and Louis Oosthuizen, although they have been “grandfathered in,” the Golf Channel report. That means they will still be allowed to compete in the FedEx Cup Playoffs, but this is certainly a warning shot to those considering future sponsorship deals with competitors of FedEx.

“All I’m going to say on that front is when you’re in business with someone for 30 years, and you’re about to commit to 10 more, you do some things to protect each other on a long-term basis,” said PGA Tour commissioner Jay Monahan. “That’s what we’ve done in this agreement, and our players know that; our players understand it; our players think so highly of FedEx and what they’ve meant to them in terms of playing financial opportunities. So we do everything we can to protect our partners.”

Deal like FedEx’s could start a dangerous precedent, though. What if AT&T decides all players who have endorsement deals with Verizon or Sprint are not welcome to play in the Pebble Beach Pro-Am? Is the Shell Houston Open going to be closed to players sponsored by other oil companies? Of course, with a 10-year deal in place for a season-long competition, there’s huge money at play that benefits both the Tour and the PGA Tour players.

A point raised in the Golf Channel report is that PGA Tour players are essentially independent contractors, and while the PGA Tour does have policies written about sponsorships, this type of clause isn’t addressed.

“Generally, all sponsorships must be tasteful and in accordance with standards of decorum expected of professional golfers,” reads the Tour policy. “Sponsorships by companies whose business reputation or ongoing business activities may reflect adversely upon the image and reputation of the PGA Tour will not be approved.”

This applies to endorsements from tobacco, alcohol, casinos and gambling companies, but not necessarily competitors of sponsors.

It doesn’t sound as though the exclusivity clause is up for any kind of debate, however, as the Tour has already agreed to it, it will certainly affect the way sponsorships and endorsement deals are conducted between players, companies and the Tour moving forward.

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2 Comments

2 Comments

  1. Mad-Mex

    May 25, 2017 at 1:02 am

    I am now only using UPS,,,,,,,,,,

  2. Hans

    May 14, 2017 at 11:27 am

    Will players still be allowed to play in the Tour Championship (and other playoff events) but just not be able to collect fedex cup bonues (or win the cup) – or will they be excluded from the events too?

    If its the former, the precedent is less dangerous as nothing else involves bonuses and a season long race. But if players are excluded from events, thats different. That said, either way, before agreeing to this youd expect the Tour already made a plan for how to handle future requests from other sponsors.

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