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11 questions (and answers) on the PGA Tour's new business deal and what it means for a LIV merger

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PGA Tour commissioner Jay Monahan and Saudi Public Investment Fund chief Yasir Al-Rumayyan continue to negotiate a possible future partnership, but the landscape changed with the tour's announcement on Wednesday.

January 31, 2024

The PGA Tour on Wednesday announced it has a new financial partner in the Strategic Sports Group and billions to invest in its new for-profit venture, PGA Tour Enterprises. What exactly does that all mean? Well, no one really knows, not for certain at least. Still, we tried our best to break down everything we do know/think at this point to help sort out what happened and what it means moving forward. With that, let's answer some questions:

Hold on, I thought the PGA Tour made a deal last summer with Saudi Arabia?

Well, the tour essentially agreed to try to make a deal with the kingdom’s Public Investment Fund, and their June 6 framework agreement did drop their lawsuits against each other. But there was never an official partnership in place, just an agreement to work on a more formal agreement, which was extended beyond and original Dec. 31, 2023 deadline into 2024. Not helping matters was the poor reception to the framework agreement from those inside the tour and out. PGA Tour players were upset at the secret nature of the negotiations. There also was pushback from the U.S. government due to potential issues with antitrust regulations. Palpable outrage remains at the tour’s flip-flop in stances—initially wanting nothing to do with PIF, then suddenly wanting to be business partners, to say nothing of the moral complications that come with dealing with Saudi Arabia.

As a result of the negative response to the small cohort that pieced together the framework agreement, more individuals were added to the tour’s decision-making process—including Tiger Woods—by request of the players. By the time tour officials went to a Congressional hearing regarding the proposed venture with PIF, the tour began courting other avenues of private equity investment, both to appease antitrust concerns regarding a merger of sorts but also as alternative funding to PIF should the framework deal not come to fruition.

So the deal with PIF isn’t happening?

Well, more on that in a second.

OK, so what was Wednesday’s agreement then?

The endeavor announced as a goal of the framework agreement, a new for-profit venture called PGA Tour Enterprises, was officially launched, thanks to the financial backing of up to $3 billion from a consortium called the Strategic Sports Group, with an initial investment of $1.5 billion.

What is PGA Tour Enterprises?

Officially, it’s an entity that houses the PGA Tour’s commercial businesses and rights, as well as those of the DP World Tour. Which is a fancy way of saying, it’s a division that’s meant to maximize revenue for the tours and their players.

The $3 billion will be funneled here while allowing the tour to keep its non-profit 501(c)(6) classification that carries tax exemptions for “business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues.” Initially, PIF was expected to infuse, at minimum, another $1 billion into PGA Tour Enterprises, and LIV Golf would be folded under the Enterprises umbrella as well. The tour says PGA Tour Enterprises has a valuation of $12 billion.

Uh, $12 billion?

It does sound like, ahem, a generous projection. But you have to remember those billions in NFTs that Phil Mickelson said the tour’s sitting on.

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John Henry and Tom Werner are among the business people who help oversee the Strategic Sports Group.

Billie Weiss/Boston Red Sox

Moving on. Who comprises the Strategic Sports Group?

SSG is a collective of several investors and firms, fronted by the Fenway Sports Group. The sports conglomerate owns the Boston Red Sox, the Pittsburgh Penguins, Liverpool F.C., and a NASCAR racing team. The group also has Fenway Park and the New England Sports Network under its roof. Other members of SSG include Arthur Blank (owner of the Atlanta Falcons), Wyc Grousbeck (Boston Celtics), Marc Lasry (Milwaukee Bucks), Tom Ricketts (Chicago Cubs), Cohen Private Ventures (New York Mets) and HighPost Capital. Many of the aforementioned names have an ownership stake in TGL, the Tiger Woods, Rory McIlroy mixed-reality circuit that was set to launch in 2024, but was pushed back a year when its facility suffered damage in a storm last month.

So does Fenway run PGA Tour Enterprises?

Technically the PGA Tour will be the controlling owner of PGA Tour Enterprises, with PGA Tour commissioner Jay Monahan serving as its CEO and SSG considered a minority partner. In the previous framework agreement, Saudi PIF governor (and de facto head of LIV Golf) Yasir Al-Rumayyan was listed as chairman of PGA Tour Enterprises, but Al-Rumayyan was not mentioned in any of Wednesday’s releases nor in a call to PGA Tour players. On Wednesday’s call with players, it was explained that four members of SSG would serve on the Enterprises’ board for decisions, along with seven tour players, Monahan, and another director from the tour.

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Tiger Woods is among the members of the PGA Tour Policy Board who voted to approve the PGA Tour taking on SSG as a investor in PGA Tour Enterprises.

Ross Kinnaird

How will the players benefit?

According to the tour, more than 200 of its members will get the opportunity to be equity holders in PGA Tour Enterprises, which projects on giving out $1.5 billion in equity. These grants, vested in time, will be “based on career accomplishments, recent achievements, future participation and services and PGA Tour membership status, and grants are only available to qualified PGA Tour players.” Most of the equity will be given to the game’s top players, as compensation of sorts for not defecting to LIV Golf. So players will become owners in PGA Tour Enterprises.

You mentioned LIV again; so they’re not a part of this at all?

In a press release, the tour stated Wednesday’s announcement “allows for a co-investment from the Public Investment Fund (PIF) in the future, subject to all necessary regulatory approvals.” Sources familiar with the negotiations have told Golf Digest that SSG made the deal with the PGA Tour under the belief that the PIF would be a part of PGA Tour Enterprises down the line.

However, talks between PIF and the PGA Tour have not gone well, sources tell Golf Digest. PIF officials were upset that the tour solicited private equity, which is why PIF recruited Jon Rahm to join LIV at the end of 2023. Rahm was seen as a bargaining chip amid worries the PGA Tour will ultimately walk away from the proposed framework agreement, the belief being that the tour could not afford to lose someone as valuable as Rahm. The problem, sources tell Golf Digest, is that a number of highly prominent voices inside the tour looked at the Rahm poaching as a casus belli, ending this period of detente and possibly reigniting professional golf’s civil war.

Meaning, the LIV-PGA Tour feud is back on?

Publicly, both sides assure they are still talking. Privately … the feud is definitely back on.

OK, so just to clarify, Wednesday’s announcement did what exactly?

It provided more financial security to the tour and gave some more incentive for its best players to stay. That’s not nothing, we suppose. Yet, there was a contingent who asserted that Rahm’s departure would be what ultimately brought the game back together; Wednesday’s announcement did little to support that theory, and instead appeared to serve as the tour’s response to losing one of its biggest stars. Anyone hoping Wednesday would signal an end to what’s happened over the past two years in professional golf likely is walking away disappointed.