#4: Roberto talks Travel & Expense

Episode #4 of the Course Record Show features our very own Roberto Castro talking about the day-to-day of a tour pro. We cover the usual expense breakdown of playing professional golf and what life on the road looks like. These are some of the most frequently asked questions that amateurs ask pros during pro-ams and outings, so we’re bringing them to you here.

Listen to the interview below or on Spotify, Apple, Google, Stitcher or Amazon. Enjoy!

Dan: So Roberto, I have to admit, I have a bunch of questions that I've always wanted to ask you but never did in all the time we've hung out. I know these are questions that our listeners have too. It's all about how Tour players spend money. So first thing I want to know, where does most of your money go as a Tour player in terms of your expenses throughout the year?

Roberto: That's a good question. First, I want to apologize to the listeners for not having a great guest on this week. It's a bit of a downgrade to just have me on, but I think it's a good conversation to have just because I've played in a hundred Pro-Ams- probably more- and you get a lot of the same questions.

And I think that's one of the cool things that amateurs get during a day like that is just kind of getting to pick the brains of just the day-to-day stuff. So I mean, expenses, I think it's like any business, it goes towards people. You know, if you have a good year on Tour, it means you're paying your caddy more. It means you're paying your coach more. The better you play, the higher you get in the world rankings, your payroll just inevitably goes up. So some coaches are compensated on percentage of official earnings. So, if that's the case and you peel off a $5 million a year and you're paying 2%-3%, your expenses at the end of the year are going to go, you know, 7%-10% to the caddy and 3% to the coach.  You're 10% right off the top.

It's $500 grand right there. So that's the biggest one. 

Dan: So it sounds like most of the biggest expenses that you have are variable, right? You want to pay more because that means you're making more. 

What about expenses that are more fixed regardless of how much money earned, you still got to pay to travel. You still gotta pay to do all this stuff. What are some of the big fixed expenses that you want to be able to clear? 

Roberto: Yeah. When you look at it at the end of the year, it's kind of more instructive than week to week because you might have a buddy at Pebble Beach who you stay with in the hotel that week, zero [hotel expense].

Or you might be playing at a place where there's just no options and you're kind of spending big ticket for a hotel. But it's funny at the end of the year, I was always surprised how little I spent on airfare. So I fly commercial, live in Atlanta, always Delta. And even like the [big] years, I was just booking first class tickets.

It's crazy. You ended up spending like 20 to 25 grand for the whole year on plane tickets, which is surprising. But you know, like we talked about with Joe [Ogilvie, episode #1], how spoiled Tour players are, you can get from the Florida events driving. If you're playing West coast swing like shirts, a big ticket to Hawaii. But then you can go San Diego, Palm Springs, & Phoenix either driving or on a hundred dollars connector flight.

So airline tickets always surprised me that it wasn't that bad. The better you play, the more you spend on hotels, I think, because you’re just going to. The Tour follows good weather, so you're always playing everywhere in high season. So there's just no more, you know, the Korn-Ferry tour, where you can find a nice Hampton Inn for 120 bucks.

Those options go out the window on Tour. You play in the Honda Classic in February in Palm Beach Gardens. Every hotel is 300 bucks a night, not even the nice ones. So LA & San Diego, similar situations. So I would say hotels, airfare and coaching, you know, those are kind of your big fixed costs.

If you sign a trainer or a coach day one, there's a retainer plus percentage. So that's how you wake up January 1st and you've spent six figures on expenses before you've hit a shot. 

Dan: So Roberto, what about on a weekly basis? Talk me through where you incur the most costs. Like where does it go? 

Roberto: Well, let's just say I live in Atlanta. I'm playing a Tour event in Chicago, So you're in for 500 bucks on the flight- could be a thousand if you're playing farther away or if you're booking a last minute ticket, or small markets are more expensive.

So $500-$1,000 for the flight. Hotels, $1000 to 3000. If you're staying in a nice hotel in a big city, you know, it could be four or 500 bucks a night or 300 bucks a night. You're there for six nights. Caddy:  when I was on the Korn Ferry, it was like $800 to a thousand [per week]. Now on Tour, it's $1800 to 2000, let's say, so let's call it 2000.

So $500 for the flight, $1500 for the hotel, $2000 for the caddy. So now you're at $4,000 and that's before you've really had a bite to eat. You're going to spend another thousand on food. Again, the Tour takes place in real cities, so you can always go to Chipotle and have a $9 dinner.

But if you go to any sort of dinner, a lot of guys travel with their wives. You know, you have a glass of wine and dinner, 150 bucks. So you're in for $5,000 bucks a week. Pretty handily. 

Dan: You mentioned part of that being the caddy payout. I'm assuming that's what you pay, even if you miss the cut and get nothing out of it. 

Roberto: That's a good question. So caddies get paid a weekly stipend and then they get paid percentage. So traditionally it was 5% of any check, 7% of a top 10, and 10% of a win.

And that's, I think some guys do it differently, but that's kind of the old standby. Five, seven, 10 [percent]. Now it might be just seven and 10, for a lot of guys are eight and 10. But that's one I'm always curious about, like, I listen to Speith on the No Laying Up podcast. And he said sometimes you assume that these kind of famous caddies for famous players, like Stevie, must've been on a salary or this or that. Caddies got into the business like players, like kind of eat what you kill.

And it was interesting. Speith said those couple of years I didn't play so well, I just feel for Michael [Greller] because like, he's starting a family, and we'd had such great years and like his income was very different. So he basically just said like, look, Michael's probably on a great stipend, but most of his income is coming off that percentage.

So I thought that was kind of interesting. Cause you know, people are always like, “Oh, I'm sure Tiger just gives Stevie a million a year, Bones a mil.” I don't think so. I think those guys, they want to catch the upside and they want to catch it, but they realize the downside of their business. I don't know.

Dan: Yeah. So Stevie, Bones, if you're listening, come on the show anytime we can confirm that or deny that.

Roberto: I don't think Stevie would mind throwing a little dirt on Tiger after watching him on the documentary. That was the most surprising thing about that entire Tiger HBO show was that he and Stevie don't talk. That was such a bummer, such a huge bummer. 

Dan: What expenses are covered by someone other than you? Are you on the hook for everything, or do you split this with a sponsor or anything like that?

Roberto: A hundred percent on the hook. Um, you know, I thought that was one of the interesting parts of the Joe Ogilvie conversation was Joe said that he always, when he was on the Board and talking to Finchem, he always felt that when you got your PGA Tour card, if you were “guaranteed” a couple of hundred thousand dollars in endorsement income that a stipend or some sort of, of retainer from the Tour was not necessary.

And he felt that if that ever went away, that maybe that should be a conversation. And I think it's really interesting, especially in light of this PIP program, right? The Tour just decided to basically give the top 10 guys a big bonus. When on the flip side, endorsement money has come down from those levels Joe was talking about, I think, if you're just a rookie on the Tour. And look, you’ve got guys who are like total capitalists playing pro golf, like, it's an eat what you kill. Nobody's looking for a handout. I mean, if you got into this business, you knew what you were getting into. But at the end of the day, there's only one way to get on the PGA Tour and that's to earn your card. 

So if you want to talk about a stipend for getting on the Tour, I don't see it as a handout. Like you've earned it. There's a hundred and twenty-five guys or whatever, plus the new guys [from Korn Ferry]. So 175 guys on the PGA Tour that all earned their spot. So if you were going to say like, Hey, if you earn your card, you get 150 grand that can cover your expenses for the year.

I wouldn't have a problem with that. I'm not necessarily advocating for it. But look, you can kind of break even on the Korn Ferry tour and get your card if you play well in the finals. So if you come out of college, you get on the Korn Ferry, you break even, and you go peel off 30, 40 grand in expenses the first 10 tournaments [on Tour], especially when we started Hawaii & West coast are pretty expensive trips. You can have a guy who has a PGA Tour card and if he doesn't play well in those events. And he's looking- you know, like cash flow becomes a problem for that guy. And that's a real thing. Maybe it's one, two, three, but it's probably closer to one to five guys every year who run into this problem.

So it's kind of an interesting nuanced kind of deep dive thought, but, I think it's a conversation that's going to come up over the next five to 10 years maybe.

Dan: How high do you have to finish in the Korn Ferry tour money list to break even there. 

Roberto: I mean, you can finish 75th on the Korn Ferry tour money list and get into the finals.

And it's at 75th, you're making, like, I dunno, 80 grand, and you're spending 80 grand for sure. So you've broken even for the year. So you've got zero in your bank account if you started with zero and if you play well in those Korn Ferry tour finals, you can get your card with one good week. So like $30,000 will get your card in those finals.

So you're now up 30 grand or 35 grand, and you're starting the PGA Tour season with that much money. Now, again, there are endorsements. So you're going to get a little bit coming in, whether you kind of get off to a slow start or not. But just for example, you can get your card and not have a bunch of cash in the bank. 

Dan: But it sounds like you can't be a lifer on a Korn Ferry Tour and expect to make any kind of money.

Roberto: A hundred percent. And that is something that the Tour's been pretty adamant about: that's not really a place to spend your career. And I agree with that. And if you look at the announcement recently that the Korn Ferry tour is going to go to a million a week and the finals are going to be 1.5 million for those three finals tournaments. It's actually really good. And it's a good way for the Tour to head off this conversation about a stipend or, you know, the conversation we just had. Because now if you finish in the top 25 on the Korn Ferry tour, even if you have a couple of good weeks in that finals deal to earn your card, you're going to start [the Tour] with more money.

You're just making more money now in the Korn Ferry tour, which gives you- you’re starting with- a bigger bankroll on the PGA Tour. And that's good. That's really great. So I think that's a really good development. It's long overdue and I'm supportive of that big time. 

Dan: You mentioned the player incentive program or the PIP. For those who don't know much about it, give us the 101 on how you experienced the PIP, what it means for a player like you. 

Roberto: It means nothing for a player like me. I can give the 101, but I haven't really looked at the details of that closely. But it's basically a pot of money, $40 million the first year, which is 2021. And I think it's going to $60 mil in the next year or two. And it's basically awarded to the top 10 guys on the PGA Tour based on a ranking that is a combination of how much social media influence you have or followers, or curating and marketability. And there's like six factors and there's some formula.

So it's basically just how famous you are. I mean, I don't have a problem with that. Those 10 guys are the guys who are moving the needle. The sport is driven by Stars. And the one thing I think is interesting though- like it took me like a week to think about- is it a way to reward those top 10 players, or is it a way for the Tour to incentivize their players to create more content?

So if I'm the 15th ranked player in the world and finished 12th in that deal, should I start tweeting more? Should I hire somebody to run my social media? Should I be pounding content out all the time so I can move up in that ranking? So, you know, I think it could work both ways for the Tour, which is really smart.

Dan: Isn't that what we're doing here? Putting out content, getting in the PIP money? 

Roberto: I mean, how many listeners do we need for my play to be overcome by podcasting fame to get me some of that? I would love to find out.  

Dan: So what behaviors do you think PIP is going to change for players? Like what would you do differently if you're on the cusp of being in that top 10 to get into the money? 

Roberto: That's a good question. I think it's worth thinking about too. Like take it one step further than we just did. Oh, are guys going to tweet more? That's simple. That's basic, but let's just pick a guy. Okay. Justin Thomas is the first or second, third best player in the world. Like phenomenal. Let's say we don't know how this thing's going to shake out. Let's say year one, he finishes eighth in the PIP. Cause you've got Tiger Woods. You've got Phil Mickelson. You've got maybe a Rickie Fowler who’s ahead of Justin Thomas in the PIP.

So, would JT tweet more or would he sit down with his team and say, “Hey, let's talk to HBO about a six-part documentary show? Let’s not just be tweeting more, but like really taking something on like that.” Just think about the Formula One show. I know dozens of people who never watched Formula One and now watch because the quality of that documentary “Drive to Survive” on Netflix.

What if a player did that? Who was already a great player and jumped to the top of the PIP. I mean, it's $10 million in year one, I think for the number one guy. And if they're going to take it from 40 to 60 [mil per year], you know, that's going to be $15 million. So it could be really interesting, you know. What do you think?

Dan: I think it is interesting. I mean, there's clearly so much going on in terms of cancel culture, and how hard it is to get exposed in the media these days. I wonder if that will be enough to really break that down or if the players will go, “I don't know. Like the downside is still really big.

I love the payout here, but I might expose myself to a lot if I try too hard here.” Does that make any sense? 

Roberto: It does make sense, but you're just thinking about the payout. What about the ego? Guys like being famous? They like being Stars. If I'm the second just XYZ player, a guy who you’ve never heard of two years from now, becomes the third ranked player in the world.

And he's 24th on the PIP? Guys don't like being told they're the 24th most famous person on the Tour when they're the third best player. So I think it could be driven by ego as much as money. 

Dan: That makes sense. But why wouldn't you just do that now?  

Roberto: Because there's no scoreboard now and the PIP puts the scoreboard to it. That's why it’s interesting. Winners like winning.

Dan: That's an interesting take- that ego as a currency in this if you're right. It’s a fascinating component to this that I absolutely did not factor in. 

Roberto: Yeah. It's real, it's a real thing. 

Dan: All right. So you talked about players making a run for the Tour, because that's where the golden goose is. Talk about how players set up fundraising to make a run at the Tour to get, you know, from a Canada or Latin America tour into Korn Ferry and hopefully ultimately into the PGA Tour. How do they set up fundraising to give it a go?

Roberto: So you want to go back to the beginning? The bottom? 

Dan: Let’s start from the bottom. Now we're here. 

Roberto: Let's start from the bottom. You know, generally the top five or 10 guys coming out of college will get some endorsement money to go on their way and, and fund their professional golf. And then, obviously, if your family has some cash, they can help you get started. But a lot of guys [don’t]. I was a four-time All-American in college and I had to go raise money and I tried to raise enough to play for one year where I could miss every single cut, have zero income and play for 12 months and do it right.

So, you know, staying in decent hotels, flying to some Monday qualifiers, playing a lot of mini-tour events. Mini tours have kind of been replaced by Latin America and Canadian Tour. But, I was super fortunate in that I had guys who just wanted to help me get started.

So I was lucky in that regard and those guys were, I mean, I would not have been able to do what I did without their support. But as you mentioned, some guys go and basically sell shares in themselves. They say, “Hey, pitch in, you know, buy 10% of my company or of me, and that'll cover my expenses. And if I get to the PGA Tour, I will pay you back plus a percentage or you'll get a percentage of my earnings.” So I might be on Latin-America Tour this year, but if you pitch in now, “when I get on the Tour, anything I make over a million bucks, you get 25% of it,” or there are all kinds of ways to do these deals.

And those are fairly common. I think most investors there go into it knowing that they're just trying to help a guy chase his dream. And if they see a dollar, they see a dollar, but they're not expecting a return most of the time. But some do get a return. 

Dan: Do you know anyone who is still paying a bunch of money back to someone who believed in them like that 10% earnings in perpetuity kind of thing? Is like, oh, maybe I should have offered less?

Roberto: Yeah, I have heard of that. And I think there are just two sides to that coin. If you're sitting there with $0 in the bank and you think you can do this and you have that dream, and you believe in yourself, you need that money. So, what's the worst possible scenario? You'd never get to chase that dream or you get on Tour and you're paying a big royalty. There's probably a limit to where you flip from being grateful to being like, “wow, this was a bad deal.”

Dan: Do you get to write off your expenses for tax purposes? It’s May, after all- the deadline’s  coming up. 

Roberto: Hmm, who’s listening to this? Yeah, you get to write off just kind of the, all the travel, hotels, coaching. You 1099 your coach, 1099 your caddy. So you can write off a bunch of stuff, but within reason, right? If you take your family to Disneyworld for a week and hit balls for 30 minutes, you can't write off that trip to Disneyworld. I mean, you can. It's just when you get audited, you're going to have to explain that trip to Disneyworld. So everyone knows that game, right?

Dan: You don't want that call.

Roberto: You don't want that call. Exactly. 

Dan: What about the PGA Tour pension? How does it work? What does it take to get in the [pension] game, so to speak, for that? 

Roberto: That's a good question. Actually, one that I get a lot and people are really interested to know about. The pension for me has two parts. So the FedEx cup, and then the cuts plan. The FedEx cup is really simple. If you finish in the top 150 on the FedEx cup, the Tour makes a contribution to your FedEx cup account. It's deferred comp. So it's not really pension, but on the FedEx cup, it's vested on year one. So that money, it goes in.

And if you only play one year on Tour and you finish 50th, they'll dump a hundred grand in your FedEx account, and that comp will come to you between ages 45 and 50 if you've stopped playing, or if you're still playing, I think you can push it all the way to 55. And it pays out over five years. So that's great.

And then the second is the PGA Tour cuts plan, where you get a contribution. Again, it's not a pension, it's deferred comp. You get a contribution for every cut made. But to vest that money, to get it, you have to play five years on the PGA Tour without a five-year break. I think it's 15 events [per year] for five years. And then once you do that, all that cuts money becomes vested. And that I think pays out from like 60 to 70 [years old] or something like that. 

Dan: So as a former consultant, I'm always fascinated by travel and how other people who travel figure out their own system to travel. So you talk about some of the expenses related to travel. But talk to me about how the operations go. 

Roberto: Were you like George Clooney and that “Up In The Air” movie, where he has all the frequent flyer points. Was that you? 

Dan: Kind of. I mean, I fired fewer people than he did. But I absolutely did profiling on which security line I was going to get into to go through the fastest. That was definitely me. 

Roberto: What about points? Are you obsessed with [frequent flyer] points or not? 

Dan: I'm off that drug now, but I was. It's easy to get caught up in that. I mean, it's like another form of compensation that you start chasing and you think you've made it because you're double platinum or whatever. But you're just kind of, you know, you're just kind of burying yourself deeper and deeper in the hole. But yeah, they get you with it- no question. 

Roberto: No doubt. I think anyone who's traveled- and maybe some people don't, those are the real lifers-  but when I was younger, I would be boarding a plane behind a guy with a diamond tag on his backpack. And I'm like, what a legend? You know, like what a hero. This guy is an absolute winner. And then I don't know if it's when you get married or when you have kids or when you've just been on too many flights. I don't know what the answer to that is. And maybe some people don't get there, but at some point you're on that thing and you see that guy with the diamond tag and you're like, poor bastard. You know what I mean? Did you have that moment?

Dan: Yeah, I definitely did. And the bag tag I never got, I never understood what that was a medal for that you wanted to symbolize. But you know, it is what it is. 

Roberto: But, yeah, as far as travel, I have always done it myself. I mean, if you could use the internet, you can book a Delta flight, right? Hotels can be a little dicier, especially if you're going through the tournament or whatnot [to get bookings done], but some of the agencies have a person who just does travel. So you just text that person all the time and they book your flights, book your hotels, change your flights; it's kind of a moving target all the time.

So I've pretty much always done it myself. My wife helped, especially on the hotel front when she was traveling a bunch because I'll kind of stay anywhere. And I was like, you pick, you know, whatever looks better to you. But it's not that complicated. 

Dan: What do you think you've racked up in [airline] change fees, given the uncertainty of making a cut ,and not making a cut, etc., and all the uncertainty that comes in your world?

Roberto:  Oh, thousands of dollars. I mean, if I had spent $20,000 a year on airline tickets , I would have spent $5,000 on change fees for sure. Or just burn tickets, or flights you never use, because it's more expensive to change, and so just buy a new one. Because like you said, like it's just, it's easy to just think you can be like, “okay, I fly Monday afternoon and then I either make the cut or miss it.” It's not that simple. Like, you know, you're like, “Oh man, I'm going to buy my flight for Dallas in two months. It's 300 bucks so a good deal.” And then you get a text like the next day or the next week. It's like, “Hey, there's a charity event in town on Monday. Can you play this thing the week of Dallas? And it's like, yeah, absolutely.” So now I just lost my deal. I've got to go buy a new flight. And my $300 flight turned into an $800 flight.

It's just constantly changes and change fees. So you're welcome Delta shareholders. 

Dan: In consulting, it's very commonly first flight out on Monday to get out, late flight on Thursday to get back. Work Friday in your home office. What's the PGA Tour Pro version of the weekly schedule going in and out of a Tour city. 

Roberto: I kind of had two. In the first couple years on Tour, I would travel Monday. Just kind of take it easy- casual travel day, avoid the Monday morning rush at the airport, get in in the afternoon, and then full day practice round on Tuesday. Because I didn't know the golf courses. And then if I was going week to week, I'd like to fly Sunday night [to the next location] preferably because then I could just have a total chill day on Monday. But once you kind of get to know the golf courses, or you have kids at home, tons of guys fly Tuesday morning because you can get there by lunchtime, play a practice round in the afternoon, and you already know the course.

So you might play nine holes or you're frequently in the Pro-Am on Wednesday. So you can get in Tuesday afternoon, hit a few balls, kind of get settled, and then you use the Pro-Am as your practice round. So, I would say that's the most common. I would say the rookies, 80% of the rookies are traveling on Mondays, and 80% of the established guys are traveling on Tuesdays.

Dan: Are there any courses that even though you've played before are tricky enough that you still have to go out on Monday or Sunday to try to figure out more going into a tournament or not necessarily? 

Roberto: Not necessarily. I mean, I maybe should have done that on courses I'd missed the cut every year. I should, like, move to Harbor Town for a month before that tournament, because I've never made a check there.

Dan: You survived all my questions, Roberto.Thanks for dishing out some secrets on the pocketbook of a PGA Tour Pro. Lots of good questions here. Lots of good insights that I think give our listeners a much better picture of what's going on in the finances of the Tour.

Roberto: Happy to do it. I know it's kind of a weird way to make a living, so happy to give some insights on how it works behind the scenes. But I promise the listeners, we will have real live, more interesting guests on future shows. So check back in on “The Course Record Show.”