The PGA Tour has unveiled a $3bn (£2.35bn) deal with a consortium led by the owner of Liverpool FC that will handsomely reward players such as Rory McIlroy and Tiger Woods who resisted the overtures of LIV Golf.
The agreement leaves Saudi Arabia having to wait for a seat at golf’s top table. Further investment from the Public Investment Fund, which has funded the rebel LIV tour, is dependent on regulatory approval as the United States’ Department of Justice maintains a close watch on golf’s power struggle.
The PGA Tour, European Tour Group and PIF announced last June it had settled on a framework agreement aimed at ending golf’s civil war with LIV. The upshot for now is the creation of a new commercial entity, PGA Tour Enterprises, which gives players – already among the highest paid in sport – access to $1.5bn in equity.
The PGA Tour told players the funds will be realised according to “career accomplishments, recent achievements, future participation and services”; good news for marquee PGA Tour players such as McIlroy and Woods.
External investment has been made by Strategic Sports Group, a conglomerate of US-based sports team owners headed by Fenway Sports Group, whose portfolio includes Liverpool. “Today marks an important moment for the PGA Tour and fans of golf across the world,” said PGA Tour commissioner Jay Monahan, who is CEO of the new enterprise. “By making the PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour.”
Until now, the PGA Tour has operated on a non-profit basis and without private equity provided by SSG.
In a joint statement, the PGA Tour player-directors Patrick Cantlay, Peter Malnati, Adam Scott, Webb Simpson, Jordan Spieth and Woods, said: “We were proud to vote in unanimous support of this historic partnership. It was incredibly important for us to create opportunities for the players of today and in the future to be more invested in their organisation, both financially and strategically.”
What has not yet crystallised is, however, more intriguing since it leaves the door open for future Saudi investment. “The transaction allows for a co-investment from the Public Investment Fund in the future, subject to all necessary regulatory approvals,” said the PGA Tour in a statement. It added: “Both parties are working towards an ultimate agreement. SSG has consented to an investment by PIF, subject to any necessary regulatory review and approvals.”
Until that arrives – and the process will be neither straightforward nor quick – golfers on the PGA or LIV circuits remain in totally different lanes. LIV, which starts its third season on Friday in Mexico, flexed its financial muscles further over the winter by signing the Masters champion Jon Rahm and European Ryder Cup player Tyrrell Hatton. LIV rebels have effectively been banned from competing on the PGA Tour.
Speaking before the PGA Tour’s event at Pebble Beach this week, the two-time major winner Justin Thomas cast doubt on LIV’s aspirations. Thomas referenced the boldness of Greg Norman, LIV’s commissioner. “They haven’t gotten anything close to what he’s kind of said,” Thomas insisted. “It sounded like they were going to sign 10 or 15 people this however many months and haven’t.”
On Monday, the US Senate’s permanent subcommittee on investigations wrote to the PIF’s governor, Yasir al-Rumayyan, to insist inquiries into the golf deal will continue. The topic was raised during senate hearings last summer but Rumayyan resisted calls to appear before the committee.
This week’s letter referenced umpteen firms working in the US on behalf of PIF. “The PIF consultants likely possess information relevant to this inquiry, and the subcommittee has issued a subpoena to each of the PIF consultants to obtain that information and relevant records,” the letter stated. “What is unprecedented here is the PIF’s repeated attempts to hamper this subcommittee’s inquiry.”
