The PGA Tour is very close to definitively closing a historic investment of 3,000 million dollars from the Strategic Sports Group (SSG), as reported in the United States by the media Bloomberg and The Wall Street Journal.
This initial investment is no joke, first because it is really high, and second because it does not yet include the Saudi Public Investment Fund (PIF), organizer of LIV Golf. Let’s remember that last June, the PGA Tour, the DP World Tour and the PIF signed a framework agreement by which the parties would work to reach a formal agreement that would unite golf. However, the agreement is still uncertain.
Bloomberg reports that the SSG and the PGA Tour will continue to negotiate on the best way to include the Saudi sovereign fund in the near future, but in those same conversations it is made clear that any investment could change. That is, everything is up in the air and it is not ruled out that there is no agreement with LIV.
The agreement between the PGA Tour and SSG, about to become official, has been made at the same time that LIV Golf maintains its maximum pressure with the signings of Jon Rahm and Tyrrell Hatton. It seems obvious that conversations with the Saudis cannot be exactly fluid at this time if signings continue to occur.
Let’s remember that LIV, in addition to the high contracts of the players, has an individual prize pool at each tournament of 20 million dollars, plus another five for the team competition. The Public Investment Fund has invested more than 2,000 million dollars in LIV Golf since its launch in 2022. The problem is that its impact has been notably below what they expected. Thus, SSG would put a third more into the PGA Tour than what LIV has invested in just over two years.
The PGA Tour responded to these actions by increasing the size of its prizes and creating the Player Impact Program (PIP), rewarding the most popular golfers to prevent further desertions. In doing so, the circuit had to ask for more capital from its corporate sponsors. Since then, the circuit has seen some of its partners withdraw due to increased costs, including Honda and Wells Fargo, two former sponsors.
Given the situation, the circuit could not compete with a foreign sovereign fund, let alone with a country that helps to feed the world with its oil. Hence, the PGA Tour entered into talks with SSG last autumn, aware that it needed more capital to sustain its circuit.
SSG includes the owner of the Boston Red Sox and Liverpool, John Henry, the owner of the New York Mets, Steve Cohen, the owner of the Atlanta Falcons, Arthur Blank, and Marc Lasry, CEO of Avenue Capital Group. Lasry was the owner of the Milwaukee Bucks from 2014 to 2023. SSG also includes other billionaires.
In addition to its significant investment in the PGA Tour, SSG can help the circuit to reform its business model “to increase profitability and make even more money for its players”, according to The Wall Street Journal. In this way, if the agreement with the Saudis fails, the PGA Tour will receive, at least, a much needed investment from SSG. And with the support of SSG, an agreement with the PIF does not seem as certain or necessary as before.