PGA Tour Finalizes $3 Billion Deal With American Sports Owners, Saudis Not Involved...Yet
Richard Heathcote. Getty Images.The PGA Tour has finalized a deal that will see Strategic Sports Group, a consortium of American sports franchise owners, invest up to $3 billion into a new for-profit entity called PGA Tour Enterprises. The deal sees the PGA Tour receive a huge influx in cash, enough to fully fund purses for the next five years, and will grant PGA Tour members up to $1.5 billion in equity shares in PGA Tour enterprises. It values the PGA Tour at roughly $12 billion.
The deal does not, however, include the Saudi Public Investment fund, nor does it constitute a "merger" of any sorts with LIV Golf. The PGA Tour and SSG remain open to Saudi investment and have been actively negotiating with the folks funding LIV Golf, but any sort of agreement would be subject to regulatory approval from the U.S. government. Multiple sources described the regulatory issues as "very, very real" and one source said it could be 6-18 months before any answer on that front. The PGA Tour will continue to look similar to its current iteration, at least in the immediate future.
PGA Tour commissioner Jay Monahan told players on Wednesday morning that the SSG deal would not impact negotiations with the PIF.
"We are proud to vote in unanimous support of this historic partnership between PGA Tour Enterprises and SSG," said the PGA Tour Player Directors Patrick Cantlay, Peter Malnati, Adam Scott, Webb Simpson, Jordan Spieth and Tiger Woods, in a joint statement. "It was incredibly important for us to create opportunities for the players of today and in the future to be more invested in their organization, both financially and strategically. This not only further strengthens the Tour from a business perspective, but it also encourages the player to be fully invested in continuing to deliver—and further enhance—the best in golf to our fans. We are looking forward to this next chapter and an even brighter future."
One source privy to the deal said roughly $700 million in equity will be doled out to the top 30 players. On a per-player basis that pales in comparison to what some of the top guys might've gotten from LIV Golf, but it's significant money and likely played into guys like Viktor Hovland and Wyndham Clark's decisions to stay on the PGA Tour.
Monahan, who has been heavily criticized for his handling of the LIV Golf situation, will continue on as CEO of PGA Tour Enterprises.
Strategic Sports Group is comprised of:
—Fenway Sports Group (Boston Red Sox, Liverpool F.C., Pittsburgh Penguins)
—John W. Henry, Principal, Fenway Sports Group
—Steven Cohen, Owner, New York Mets
—Arthur Blank, Owner, Atlanta Falcons, Atlanta United
—Mark Attanasio, Principal, Milwaukee Brewers, Norwich City
As well as other executives in the sports business space. Below is the entire announcement sent to PGA Tour membership on Wednesday morning.
"We greatly appreciate the opportunity to join PGA Tour players in this important next phase of the PGA Tour's evolution, Henry said in a statement. "Our enthusiasm for this new venture stems from a very deep respect for this remarkable game and a firm belief in the expansive growth potential of the PGA Tour. We are proud to partner with this historic institution and are eager to work with the PGA Tour and its many members to grow and strengthen the game of golf globally."
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The news comes the same week that LIV Golf begins its third season in Mexico. The PGA Tour is in California this week for the AT&T Pebble Beach Pro-Am, now one of the tour's signature events with an 80-man field, $20 million purse and no 36-hole cut.
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