PGA Tour unveils $3bn partnership deal to reward players who resist LIV
The PGA Tour has unveiled a $3 billion deal with a consortium led by the owners of Liverpool FC that will richly reward players like Rory McIlroy and Tiger Woods who resist LIV Golf’s overtures.
The deal leaves Saudi Arabia waiting for a seat at the golf world’s top table. Further investments from the Public Investment Fund, which financed the rebels’ LIV tour, are subject to regulatory approval as the US Department of Justice keeps a close eye on golf’s power struggle.
The PGA Tour, European Tour Group and PIF announced last June that they had entered into a framework agreement to end the civil war between golf and LIV. The result for now is the creation of a new commercial entity, PGA Tour Enterprises, which will give players – who are already among the highest-paid players in the sport – access to $1.5 billion in equity.
The PGA Tour told players that the money will be based on “career achievements, recent performance, future participation and service”; good news for big PGA Tour players like McIlroy and Woods.
External investment has been made by Strategic Sports Group, a conglomerate of US sports team owners led by Fenway Sports Group, whose portfolio also includes Liverpool. “Today is an important moment for the PGA Tour and golf enthusiasts around the world,” said PGA Tour Commissioner Jay Monahan, CEO of the new company. “By giving PGA Tour members ownership of their competition, we are strengthening our players’ collective investment in the success of the PGA Tour.”
Until now, the PGA Tour has operated on a non-profit basis and without private equity from SSG.
In a joint statement, PGA Tour player directors Patrick Cantlay, Peter Malnati, Adam Scott, Webb Simpson, Jordan Spieth and Woods said: “We were proud to unanimously support this historic partnership. It was incredibly important for us to create opportunities for today’s and tomorrow’s players to invest more in their organizations, both financially and strategically.”
What has not yet crystallized, however, is more intriguing because it opens the door to future Saudi investments. “The transaction allows for a future co-investment by the Public Investment Fund, subject to all necessary regulatory approvals,” the PGA Tour said in a statement. It added: “Both sides are working towards a final agreement. SSG has agreed to an investment by PIF, subject to any necessary regulatory reviews and approvals.”
Until that happens – and the process will be neither simple nor quick – golfers on the PGA or LIV circuits will remain in completely different lanes. LIV, which begins its third season in Mexico on Friday, further flexed its financial muscles over the winter break by signing Masters champion Jon Rahm and European Ryder Cup player Tyrrell Hatton. LIV Rebels are effectively banned from playing on the PGA Tour.
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Speaking before the PGA Tour event at Pebble Beach this week, two-time major winner Justin Thomas cast doubt on LIV’s ambitions. Thomas referenced the boldness of LIV commissioner Greg Norman. “They haven’t come close to what he said yet,” Thomas insisted. “It sounded like they were going to sign 10 or 15 people in the next few months, but that didn’t happen.”
On Monday, the US Senate Permanent Subcommittee on Investigations wrote to PIF Governor Yasir al-Rumayyan to insist that the investigation into the golf deal will continue. The topic came up during Senate hearings last summer, but Rumayyan resisted calls to appear before the committee.
This week’s letter referred to numerous companies working on behalf of PIF in the US. “The PIF consultants are likely to have information relevant to this investigation, and the subcommittee has issued a subpoena to each of the PIF consultants to obtain that information and relevant documents,” the letter said. “What is unprecedented here is the PIF’s repeated attempts to obstruct this subcommittee’s investigation.”