According to a report by ESPN in the United States, we are facing an imminent multi-million dollar agreement between a group of well-known North American sports team owners and the PGA Tour. At the same time, the circuit hopes to reach a similar agreement with the Public Investment Fund of Saudi Arabia.
The American agreement would be with Strategic Sports Group, a consortium of billionaire team owners that includes Tom Werner and John Henry (Boston Red Sox), Arthur Blank (Atlanta Falcons) and Wyc Grousbeck (Boston Celtics) and would inject more than 3 billion dollars into a new for-profit entity, PGA Tour Enterprises. This investment group is the one that was authorized to start negotiations in an official Tour statement to the players a few days ago.
At the same time, according to the information, the PGA Tour is also in talks with PIF officials, the Saudi fund that finances LIV Golf. If an agreement is reached with both Strategic Sports Group and PIF, more than 7 billion dollars could be injected into PGA Tour Enterprises, which would combine the commercial assets of the PGA Tour, PIF and DP World Tour.
The agreement with Strategic Sports Group could be announced before the end of the year. Meanwhile, the agreement with the PIF is likely to be extended beyond December 31, the date on which the deadline they set in the framework agreement they signed last June theoretically ended.
According to the terms of the agreements, the PGA Tour would maintain control of the new for-profit entity, while Strategic Sports Group and the PIF would be minority owners. The PGA Tour commissioner, Jay Monahan, and the PIF governor, Yasir Al-Rumayyan, are scheduled to meet next week, after previously scheduled meetings were postponed.
The urgency to close the agreements has increased after LIV Golf signed Jon Rahm, a fact that was made official on December 7. According to Ten Golf information, Rahm agreed to a multi-year contract worth more than 300 million dollars to make the jump to LIV Golf.
“It was nothing more than a shot across the bow,” said a source familiar with the negotiations to ESPN. “It was a punch from PIF to the PGA Tour, which can sign anyone, even the guy who flatly refused to join. Three hundred million dollars is a laughable amount for the Saudis. Their message was: ‘Do you really want to keep fighting with us? Do you want to keep talking to everyone and leave us out? Good luck with that’. That’s their message.”
The original framework agreement between the FIP and the Tour included a provision that prohibited both parties from recruiting players from the other. It was removed due to concerns raised by the antitrust division regulators of the U.S. Department of Justice, which was already investigating the alleged monopolistic business practices of the PGA Tour.
Some sources told ESPN last week that LIV Golf is recruiting other PGA Tour players to fill the spots on a team that Rahm will captain. “Yasir stayed on the sidelines for a while, but as he kept reading about all those suitors, I think he decided to go for the Masters champion, the guy who said they wouldn’t buy him for any price, and put a price on him that he couldn’t refuse,” said the source. “The lesson is that if you have enough money, you can do whatever you want in the United States. The Saudis have realized that. Yasir gets it,” the same source told ESPN.
The potential agreements would stabilize a fractured sport that has been affected by player defections, a federal antitrust lawsuit, and skyrocketing operating costs, as rival circuits have fought for the world’s best golfers over the past two years.
The board had also studied the offers of other U.S. capital groups, such as Endeavor, the parent company of WWE, UFC and sports agency IMG. A multi-million dollar offer from Acorn Growth Company, a private equity investment firm based in Oklahoma City that operates in the aerospace, defense, intelligence and space sectors, was also considered.
“The main advantage of reaching an agreement with PIF is that they are not killing Jon Rahm,” said the source. “It’s not that the tour can’t get billions elsewhere. There are very deep pockets that want to get in. The Tour really doesn’t want to make a deal with the Saudis, but they have so much money, so much muscle – that can still destroy. That’s what Rahm’s signing indicates.”
Initially, the Saudis were reluctant to be part of an agreement with the PGA Tour that includes other investors based in the United States. But becoming partners with high-profile franchise owners like Henry, Blank and others proved attractive. The Strategic Sports Group also includes Mark Attanasio (Milwaukee Brewers), Cohen Private Ventures (New York Mets), Tom Ricketts (Chicago Cubs) and Marc Lasry (Milwaukee Bucks, former co-owner).
“They have the opportunity to rub shoulders with all these multi-millionaire sports magnates in America,” says a source. “It’s a long game for them. They don’t stop at golf. They want a piece of everything.”
Even if an agreement is reached with Strategic Sports Group and PIF before the end of the year, it could be several months before the best golfers play in the same tournaments again. The antitrust division of the U.S. Department of Justice, which expanded its investigation to include the proposed alliance between the PGA Tour, DP World Tour and the PIF once the framework agreement was announced, is expected to thoroughly examine the agreements.
In addition, the PGA Tour continues to debate how to punish its members who signed with LIV Golf and may want to return. Monahan suspended more than 30 players who competed in LIV Golf tournaments without having been released. A committee is trying to devise a tiered system of possible disciplinary measures.
The future of LIV Golf and team golf in the ecosystem of men’s professional golf remains a point of friction for Saudi officials, sources said. LIV’s CEO and commissioner, Greg Norman, told ESPN this week that his circuit “will always remain an independent entity,” whether or not an agreement is reached with the PGA Tour.
Although LIV Golf has attracted several past champions, such as Phil Mickelson, Dustin Johnson, Brooks Koepka and Bryson DeChambeau, with guaranteed contracts worth more than 100 million dollars and the richest purses in the history of this sport, it has struggled to make a dent among golf fans in the United States, with mediocre television ratings and few sponsors.
However, LIV Golf, with its unique format of 54 holes, shotgun starts and simultaneous team and individual competitions, has forced massive changes in both circuits and has injected billions of dollars into this sport.
PGA Tour players will receive a share of the multi-billion dollar investments. In a note sent to the players on November 14, Monahan said that the PGA Tour will offer its members a direct stake in shares in PGA Tour Enterprises.
“At the moment we secure the external investment, it will be a unique offer in professional sport, as no other league grants its players/members a direct stake in the league’s business,” Monahan wrote. “We recognize -as do all potential minority investors who are in dialogue with us- that the PGA Tour will be stronger with our players more closely aligned with the commercial success of the business.”
