By Chris Kidd, Special for USDR
Radio Host Kevin Price, and Chris Kidd, Financial Coach and Contributor on the Price of Business on Business Talk 1110 AM KTEK (on Bloomberg’s home in Houston), interviewed Gene Egdorf, from the Lanier Law Firm. On this segment Chris, Kevin, & Gene discussed some interesting things going on from a legal standpoint in the sports world (Click here to listen to the interview)
This segment kicked off with Kevin Price and Chris Kidd talking about how Kidd’s work as a financial coach ties into the sports world, and then led into Chris introducing his guest, Gene Egdorf, a prominent attorney who handles a lot of commercial law issues and issues concerning the business side of sports. Gene Egdorf has worked on some significant lawsuits including concussion cases and other medical cases against the NCAA, involving injuries to college athletes, and the video game case against EA Sports that allowed college athletes to start getting paid for using their likenesses to be used in video games. Egdorf also just filed a lawsuit on behalf of the Rockets and Astros for the failed Comcast Sports Network.
Chris said he wanted to have Gene talk a little more about the EA Sports lawsuit, but to first discuss the PGA lawsuit he is handling on behalf of the PGA caddies. Gene explained that the PGA Tour Caddies are independent contractors, so they don’t work for the tour, but they are required to wear the PGA bibs. These bibs have logos of the PGA sponsors on them, so the PGA gets paid for these ads, but refuses to share any of that money with the caddies who are their walking billboards. Mr. Egdorf said, “The Tour is making somewhere between $50-$75 million a year off these bibs that the caddies have to wear. And the caddies went to them and said, ‘Look, if you could give us even 10% of that, we can fully fund healthcare and retirement packages for all the caddies,’ who by the way pay their own expenses for each event, so if your player doesn’t do well, you’re in the hole.” (Click here to listen to the interview)
Kevin asked, “How they get paid if they’re affected by their player losing or not doing well?” Gene explained that each caddie has their own deal with their player, which will vary from player to player, but the caddie will get some kind of weekly stipend (maybe $750-$1000 a week), but the caddies typically pay their own expenses like air travel, rental car, food, hotel, etc. “And then the caddie’s compensation is a percentage of how a player does. So typically if a player wins an event the average deal, the caddie will make 10% of those winnings, so you know, a standard a player wins a million bucks to win an event, a caddie can have a good week and make $100,000. And then its sort of a stair step down, to where if you just make the cut, it might be five or six percent. I’ve got clients who’s players only made a few cuts and the caddies actually lost money on the year because of the way their expenses were.”
Chris laughingly remarked, “I remember when Tiger Woods was just really tearing it up, his caddie was like second on the money list on the PGA Tour.” Gene informed the POB guys that Steve Williams (Tiger’s caddie that Chris was referring to), who is also a client of Egdorf’s, could have earned substantially more if he had been allowed to add a sponsor to his bib at the time. Because of the excitement and following of Tiger, the sponsorship of that bib would have been worth an estimated $10 million a year to Steve Williams.
For now the PGA retains all rights to the money paid by sponsors displayed on their caddie bibs. Perhaps one day the caddies will see some of that money. Or maybe caddies will even start to look more like NASCAR cars.
(Click here to listen to the interview)
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