Jay Monahan reveals PGA Tour caved into merger with LIV Golf as it could no longer afford fight

Commissioner Jay Monahan told employees the PGA Tour simply couldn’t afford to continue fighting the Saudi Arabia-backed LIV Golf League after the shock merger of the two tours.

Monahan, 53, said the tour spent tens of millions on the legal battle with Saudi Arabia’s Public Investment Fund (PIF), while also increasing her own purse to prevent other players from defecting to the rival circuit.

Monahan made the comments Thursday at a meeting at the PGA Tour’s headquarters in Ponte Vedra Beach, Florida.

He said the fight against a Saudi Arabian sovereign wealth fund, which reportedly has more than $600 billion in assets, was not sustainable.

The meeting came two days after the PGA Tour’s shock announcement that it had formed an alliance with the DP World Tour and the Public Investment Fund.

The PGA Tour spent tens of millions on court costs and also raised its own purse to prevent other players from defecting to LIV Golf

Yasir Al-Rumayyan, the governor of Saudi Arabia’s Public Investment Fund, will become PGA’s CEO once the merger is officially completed

‘We cannot compete with a foreign government with unlimited money,” Monahan told employees The Wall Street Journal. ‘This was the moment. […] We waited until we were in the strongest possible position to close this deal.”

Monahan told them the tour had spent $50 million in legal fees and drawn $100 million from its reserve funds to help pay out bigger purses and other bonuses to top players.

In a statement to ESPN on Saturday, a spokesperson for the PGA Tour characterized the Wall Street Journal report as an “oversimplification.”

“To characterize this agreement as coming about because of litigation costs and other uses of reserves is an oversimplification,” the statement read, adding: “With the end of the broken landscape in the world of professional men’s golf, the PGA Tour has never been been. a more valuable asset.

“The Public Investment Fund (PIF) has recognized that value and the opportunity for it [return on investment] with their investment in the tour. In addition, this transaction will make professional golf more competitive against other professional sports and spot competitions.”

Monahan said “getting a competitor off the board” was one of the motives for the merger

The merger agreement announced Tuesday ends all legal disputes between the PGA Tour and the PIF.

A source told ESPN that the PGA Tour’s insurance will cover most of the legal costs.

Meanwhile, players who turned down big-money offers to defect to LIV Golf and stay with the PGA Tour will receive stock in the new for-profit entity formed by the merger of both tours, PGA Tour policy director Jimmy Dunne said.

Dunne, who is credited with orchestrating the new deal, contacted PIF Governor Yasir Al-Rumayyan earlier this year to begin talks about the deal that took the sports world by surprise.

Players who declined LIV’s offers and stayed on the Tour will receive compensation for their loyalty

PIF previously funded LIV Golf, which led to the schism in the golf world that saw star players such as Phil Mickelson, Dustin Johnson and Brooks Koepka leave the PGA Tour behind.

Star players who rejected LIV’s offers and stayed, such as Spain’s Jon Rahm and Japan’s Hideki Matsuyama, will now be compensated for their loyalty.

‘The new [company] would grow, and the [current PGA Tour] players would get a chunk of equity that would grow over time and increase in value,” Dunne told ESPN.

“There should be some kind of formulaic decision on how to do that. It would be a process of determining what would be a fair mechanism that would really benefit our players.”

The players who have joined LIV are not eligible for that share plan.