Golf: Are Caddies Getting Paid Too Much?

The highest paid sportsman in New Zealand is Steve Williams. Tiger Wood's caddie in his heyday. Steve has a net worth of more than 25 million dollars. Caddies are not just required to carry a bag around. They have to give the correct club to the golfer. Tell him he is wrong when he selects the incorrect club. They have to read the greens, keep their golfer calm. Some caddies are great companions to their bosses. They go for dinner with them and the modern day golfer is selecting people that they get on with more than anything. Take Rory McElroy for example. Rory is a head strong individual and would not take a caddies opinion under any circumstance. He has selected his best friend Harry Diamond on his bag. Harry is a pub owner by trade and he has put that on hold to travel the world with Rory and earn up to 10% of his earnings.

Phil has parted ways with bones. Rory with JP Fitzgerald who famously text Rory after the fed ex cup money was allocated saying
A tidal wave just hit my bank account
That tidal wave was a million dollars. Not bad for 4 days work.

Now many pros are parting ways with their long term caddies for financial reasons. Yep, Financial reasons. These guys are multi millionaires you say. But lets deep dive into this for a minute to get some perspective.
The purse at most of these competitions is at least 7 million. 1st place gets 1 million. Maybe more but lets just call it 1 million. So the percentages a caddie gets is around 6% of total earnings. Top ten can be 8% and 1st place is normally 10% of prize money.Interesting fact . If an amateur wins the competition the prize money goes to the next person in 2nd place. There were 3 amateur wins on the European tour last season. 1 very famous pro golfer came 2nd and received the 1st place pot. He still only gave his caddie 8%. His caddie quit a week later. Would you blame him.
Ok back to the drill down.
Right I'm a golfer. I win a million dollars. I do not win that many PGA tour events. I'm jumping around with my caddie. He or she is happy. 100k for them. We have a great night celebrating. The next day we look at the finances. The golfer has to pay his tax in that country where he wins the prize. What rate would you expect it to be. Yep the higher rate.Depending on the country we are looking at anything between 45% to 55%. So lets call it 50% tax. What is he left with. 500k. We have to pay 2% to my manager. 20k. We have 480k left. Travel and hotel for entourage we are talking around 50k. By the end of it the golfer is left with around 400k.
We now look at the caddie. He or she is employed by the golfer so the caddie is not required to be taxed in the country where the prize money is given. So most caddies have residency in tax havens around the world. These guys are nomads so do not stay in any one country for a long time so their 100k will not take that much of a hit. Golfers realise this and quite a few are not happy with the remuneration of a long term caddie. Would you blame them? Not so long ago Matt Kucher agreed to pay a caddie 6000 dollars to take his bag for the week at the WGC in Mexico. The caddie agreed. Kucher ended up winning 1.3 million. He still gave the caddie what was agreed and there was uproar over it. At first Kucher tried to play it down but it ended up a global news story and a public relations disaster. Now alot was made of this and it was a bit tight from Kucher but they had agreed 6k.

The result is why sponsorship is massive in a golfers earnings and the worlds top golfers make most of their money from these deals. Now the elephant in the room is coming very very soon. It is only a matter of time. The golfer gets huge airtime on TV to show off his sports clothing, his watch, his clubs. All with logos. Who is always by his side? Yep. The caddie will soon start getting deals of clothing manufacturers to wear their stuff on TV. And this is where caddies are going to start earning huge money. I would be like a christmas tree walking down the fairway if it was me. It is coming and it will be interesting to see what the golf governing bodies are going to do about it.