Every Monday, I write a newsletter breaking down the business in golf. Welcome to the 58 new Perfect Putt members who have joined us since last Monday. Join 4,224 intelligent and curious golfers by subscribing below.
Hey Golfers —
Three PGA Tour Caddies made over $1 million in gross income last season — while several others were close to cashing seven-figure years.
Here is a look at the top ten PGA Tour money list from last season and what their respective caddie earned in gross income.
The chart above includes all money made on the PGA Tour last season and the FedEx Cup bonus. Other bonuses and tours were not included.
Those figures assume a few variables — here is how we got there.
$2,500 weekly base fee
10% for a win
7% for non-win
The weekly base fee is a negotiable item between players and caddies — driven mainly by player rankings.
Top 20 — $5,000+ weekly base
Top 50 — $3,000 - $4,000 weekly base
Top 100 — $2,000 - $3,000 weekly base
Earning percentages are negotiable — although the 7% and 10% split is pretty standard. A new relationship between player and caddie could see 5% of earnings for anything outside a Top 25, 7% for a Top 25, and 10% for a win.
But it isn’t all roses for PGA Tour caddies — like PGA Tour players, they are independent contractors.
Caddies are responsible for their expenses.
Flight
Hotel
Rental Car
Food
Yardage Books
An average week on the PGA Tour will cost a caddie between $1,000 - $1,500 to show up.
Even more challenging? No health insurance, no retirement account.
Health insurance on the open market can cost a caddie tens of thousands of dollars per year, depending on their family situation. While caddies can invest their money in a retirement vehicle — they are missing out on a company match option.
While the top guys do exceptionally well from a money standpoint — there is a bit of a drop-off.
Let’s look at Joel Dahmen — a guy who has made $9.5 million in career earnings and ranked 128th worldwide. He’s a damn good player.
Joel made $1.7 million last year in 26 events. His caddie, Geno, likely made around $180,000.
Not bad, right? Start peeling back the onion, and it is a grind.
If we take the average travel week of $1,250 — Geno had over $30,000 in expenses. Add in the unknown variable of health insurance and lack of retirement account.
But that isn’t even the craziest part. Geno spent 26 weeks on the road — half the year away from his family in a hotel room. While Geno likely netted double the national median household income of $68,000 — you have to respect the trade-offs to get there.
PGA Tour caddies do have the opportunity to make additional income.
Let’s start with the Valspar Hat Program.
The Valspar Hat Program has a total bonus pool of $550,000 to pay out to PGA Tour caddies at the end of the year.
The bonus is based on a point system — here is how it works.
1 point per round
2 bonus points for round 3 & 4 if starting in the Top 20
.5 points for a bucket hat
.5 points for a colorful hat (red, green, purple, etc.)
10 points for every five events that a hat is worn
10 points for a win
5 points for 2nd - 10th
The average payout for the Valspar Hat Program is $5,000 - $8,000. Some caddies make over $10,000 wearing a Valspar hat.
Caddies can make money off sponsorships — one of the most common is the hat they wear.
Let’s take Nike for example. In most cases — a Nike-sponsored player will have a requirement from Nike of the player’s caddie to wear a Nike hat with no other logos.
Another example is for an OEM company to sign a contract with a player. The OEM company can designate some of that contract money for a caddie to wear a hat with their logo.
At times, a PGA Tour player will pay out a bonus to their caddie.
Christmas
High Playoff Finish
PGA Tour Status
In this sense — it is like every other business that exists. Treat your employees how you would like to be treated, and they are more likely to stick with you through the lows of the business.
Being a PGA Tour caddie has a significant financial upside — it also can be a weekly physical and mental battle. It isn’t for everyone.
Have yourself a great Monday. Talk to you next week!
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