PGA Tour finalizes multi-billion dollar deal with SSG; Saudi PIF, LIV Golf not yet included
31/01/2024 16:33
The PGA Tour has finalized an agreement with the Strategic Sports Group, which will invest billions into a new for-profit entity.
The PGA Tour has closed on a deal with the Strategic Sports Group (SSG), a consortium of American professional owners. SSG, led by Fenway Sports Group, will invest $3 billion in total.
The agreement establishes a new for-profit entity, PGA Tour Enterprises, which the PGA Tour will have control of. Further, nearly 200 PGA Tour players will have the opportunity to receive $1.5 billion in immediate and future equity based on performance in this new venture, according to a memo sent to players posted by Ryan French of Monday Q on X.
SSG will initially invest $1.5 billion into PGA Tour Enterprises at the onset, with PGA Tour Commissioner Jay Monahan serving as the CEO of the new entity.
The total value of PGA Tour Enterprises will soar up to $12 billion, thanks to the high-level portfolio of investors within SSG.
But importantly, this transaction does not include the Saudi Public Investment Fund (PIF), LIV Golf's beneficiary.
The Department of Justice (DOJ) and the Permanent Subcommittee on Investigations (PSI) within the United States Senate continue to investigate the PIF, as well as its pending deal with the PGA Tour and DP World Tour. The PSI even subpoenaed the PIF, including PIF Governor Yasir al-Rumayyan, but they have continually dodged the Senate since last July. He also declined to testify.
Sen. Richard Blumenthal (D-CT), the chairman of the PSI, sent a letter to al-Rumayyan and the PIF as recently as Monday, seeking more information about their investments and their consultants. The PIF's investments in American-based companies fall under U.S. jurisdiction.
Nevertheless, should the PGA Tour, SSG, and the PIF eventually strike a deal, DOJ approval will likely take a year, according to Josh Carpenter of Sports Business Journal.
A timeline for the PGA Tour's agreement with PIF remains unclear, although confidence in getting a deal done remains.
Thus, professional golf could be unified in 2026, meaning LIV Golf and the PGA Tour will likely operate as separate tours for at least the next two golf seasons.
But in the meantime, Monahan will join the 13-person PGA Tour Enterprises board.
That board will also include seven players, Fenway Sports Group founder John Henry, Cohen Private Ventures Co-Founder Andy Cohen, Boston Red Sox President Sam Kennedy, and Atlanta Falcons Owner Arthur Blank—who are all a part of SSG—and one additional director from the PGA Tour Policy Board, according to Sean Zak of Golf.com.
"Today marks an important moment for the PGA Tour and fans of golf across the world," Monahan said in the memo.
"By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour. Fans win when we all work to deliver the best in sports entertainment and return the focus to the incredible—and unmatched—competitive atmosphere created by our players, tournaments, and partners."
"And partnering with SSG—a group with extensive experience and investment across sports, media, and entertainment—will enhance our organization's ability to make the sport more rewarding for players, tournaments, fans, and partners."
No doubt, Wednesday's announcement is a landmark day for the PGA Tour. The tour and its players receive a boatload of capital, as tournament purses are secured for the next five years, according to Dan Rapoport of Barstool Sports.
But golf remains divided, and it could be for a while, thanks to the DOJ and the PSI.
Yet, the PGA Tour now has some much-needed capital, and its membership and stakeholders should feel excited about it going forward.
Jack Milko is a golf staff writer for SB Nation's Playing Through. Be sure to check out @_PlayingThroughfor more golf coverage. You can follow him on Twitter @jack_milko as well.
