The PGA Tour’s Championship Management division is on the verge of assuming control of one of its tournaments and it might not be the last as it shifts into an era of additional for-profit business ventures.

Golfweek has learned that the Tour told employees at the tournament formerly known as the Honda Classic, which has been tentatively re-named The Classic in The Palm Beaches, that it is taking ownership of the event and that employees would be kept on through at least this year’s tournament but will become Tour employees. The event is scheduled for Feb. 29 to March 3, 2024. Once the ink is dry on the contract, the Tour is expected to name Cognizant as the new title sponsor to replace the Japanese automaker.

The Tour has played at PGA National Golf Club since 2007 – and that will continue into the future – when IGP Sports & Entertainment Group assumed management of the event, bringing Barbara and Jack Nicklaus into the fold and with Children’s Healthcare Charity Inc., a 501-C3, as the host organization. In 2013, IMG Worldwide acquired IGP, and has run the event ever since. The Honda Classic was founded in 1972 as the Inverrary Classic with Jackie Gleason as its host.

Honda became the title sponsor in 1982 but, as first reported by Golfweek, said the 2023 edition would be its final year in that role. At the time, it was the longest-running sponsor on the Tour. According to a tournament director who spoke on the condition of anonymity, Honda was willing to pay $13 million per year to renew as title sponsor but balked when the Tour played hardball and demanded $15 million.

“The Tour thought it had a replacement waiting in the wings that was willing to pay the 15 (million) they were asking but they backed out,” the same source said.

Staffers were told that the Tour’s decision to assume management of the event had to do with the failure to find a new title sponsor willing to pay the bills. But sources tell Golfweek that T-Mobile was set to sign a deal late last year to become the title sponsor as early as 2023 but that deal was squashed by AT&T, which is the Tour’s Official Marketing Partner in the telecommunications space and the longtime title sponsor of the AT&T Pebble Beach Pro-Am. (At the time, AT&T was also the title sponsor of the AT&T Byron Nelson.)

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A PGA Tour spokesperson confirmed that the event is close to securing a new sponsor.

“For fans and the community, the long-term future of The Classic in The Palm Beaches – one of the premier sports and entertainment events in the region – is secure. The PGA Tour is in the final stages of securing a title sponsor and transitioning operators, where the longstanding commitment to charitable giving – working closely with Children’s Healthcare Charity, Inc., will remain a pillar of the event. We look forward to presenting the best version of the PGA Tour’s South Florida event in 2024,” a Tour spokesperson told Golfweek in a text message.

There have been other recent suitors. While Carrier Co., a local company best known as a maker of air conditioning units, conducted talks about sponsoring the South Florida Tour stop, those conversations broke down when it wasn’t able to secure a “signature event” designation. There were also rumors after the framework agreement between the Tour and Saudi Arabia’s Public Investment Fund was announced in June that Aramco could step in as the title sponsor. The Tour routinely conducts conversations with potential sponsors.

The Honda Classic attracted one of the best fields less than a decade ago but in recent years it has struggled to attract a world-class field. The 2021 tournament had just five top 50 players and two in the top 20. (This year’s edition improved to 12 of the top 50, but four of the top eight who live in northern Palm Beach County chose not to play.)

“You can’t keep selling a steak if you’re giving them a corn dog,” said a longtime contractor at the Honda Classic, who was familiar with the latest dealings.

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Without a title sponsor in place, the Tour announced plans to underwrite the tournament in 2024. Tournament organizers are being asked to contribute $3 million from its reserves with the Tour paying the difference.

The Honda Classic distributed $7.2 million to more than 100 South Florida philanthropic organizations this year and more than $60 million in its history. Meanwhile, the Tour reached an agreement with Jack and Barbara Nicklaus that promises the Nicklaus Children’s Health Care Foundation, the primary charitable beneficiary of the tournament, will receive a grant of $2.5 million per year for the next five years.

“If it is accurate that the Tour is flying into a more for-profit world that goes against the original genesis of the Tour,” said one former tournament director with knowledge of the changes to be implemented. “That’s troubling.”

A source familiar with the situation said the 2023 total charitable sum was a result of net proceeds from the event combined with the tournament’s successful Birdies for Children program. It is possible the new arrangement could net a similar impact in the market for charity, although not guaranteed.

Less troubling is encouraging news for a new title sponsor. The Tour has renewed interest from Cognizant, an information technology services and consulting company. Cognizant already is a global partner of the Presidents Cup, a relationship that began in 2022 and extends through 2026, and a title partner of the LPGA’s Founders Cup.

“This event has been a staple in South Florida for 50 years, including the last 20 years in Palm Beach County, where it has made an incredible impact on local charities,” Jack and Barbara Nicklaus said in a statement to The Palm Beach Post.

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“We are happy to hear that there will be a continued commitment to helping countless important causes, including our Nicklaus Children’s Health Care Foundation.”

According to multiple sources, the Tour is closing in on signing the company as the new title to a multi-year contract with a “discounted deal” for the first year but the Tour is waiting for the ink to dry on the contract to assume management of the event “so it can look like the tournament savior when it announces the new title.”

The kickoff to the Florida Swing may not be the only event the Tour takes over, according to a tournament director. Some of the other weaker events may be rolled into the for-profit side of the Tour’s business going forward. The host organization’s contract typically runs hand in hand with the title sponsor contract. As other contracts expire, the Tour will have the option to assume management. A source says the Tour told former Honda staffers that by the end of 2025, the Tour would like to have as many as 15 tournaments in the championship management division.

But will in the neighborhood of 2,000 tournament volunteers still fork over hundreds of dollars for uniforms and give of their time to fill the coffers of a for-profit entity, especially if the Tour goes through with its partnership with the Saudi-backed PIF?

“It’s hard enough getting the necessary volunteers as it is in a post-Covid world. How many do you think are going to sign up if there’s not millions of dollars staying in the community,” a tournament director said.

Change is coming and the Tour’s annual stop in South Florida may be the first of many tournaments to experience this brave new world.

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