The US PGA Tour announced a deal worth up to $3 billion (A$4.6bn) with a group of billionaire sports team owners on Wednesday to create a for-profit entity, PGA Tour Enterprises.
The commercial venture partnership with Strategic Sports Group (SSG), under the PGA Tour’s control, offers nearly 200 PGA Tour players the chance to become equity holders in the new company launched Wednesday.
SSG includes Fenway Sports Group, owners of English football’s Liverpool FC, MLB’s Boston Red Sox and the NHL’s Pittsburgh Penguins, plus MLB New York Mets owner Steven Cohen and NFL Atlanta Falcons and MLS Atlanta United owner Arthur Blank.
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Under the program, players would collectively access more than $1.5 billion (A$2.3bn) in grants that vest over time with SSG investing an initial $1.5 billion and the possibility of investing another $1.5 billion later.
The money would maximize revenue to benefit players as well as enhance worldwide golf growth opportunities, the PGA Tour said.
The grants, according to a statement by the PGA Tour, “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.”
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The PGA Tour also said that no deal has yet been reached with the Saudi Arabian Public Investment Fund (PIF), backers of the LIV Golf League, despite an agreement being made in June.
Progress has, however, been made in ongoing merger talks with PIF, which will still be allowed to make future investments in PGA Tour Enterprises should they finally reach an agreement.
“Both parties are working towards an ultimate agreement,” the PGA Tour said in a statement.
The talks regard completing a merger framework deal announced last June that would unite the PGA and DP World tours with the PIF.
Those negotiations have extended beyond a deadline of December 31 with no announcement regarding progress or details, among which would be how to deal with players who jumped to the upstart series but seek a return to the PGA Tour.
One suggested method as discussions rolled through last year was to deny those who went to LIV any access to the new equity company.
After the PGA Tour’s deal with SSG was announced, LIV Golf CEO and Commissioner Greg Norman wrote to staff and assured them he’d “never been more confident in the (LIV) league, the people involved, and our supporters all over the world”.
“As you may have seen, the PGA Tour made an announcement this morning about an investment partner. Let me make one thing very clear: nothing announced by other tours or investment groups changes LIV Golf’s positive trajectory or future plans,” Norman wrote in a latter to staff, obtained and published by Golfweek.
“We started LIV Golf with the goal of creating something new, taking the game to a global, diverse audience and driving innovation while growing golf’s fanbase. More investment in golf is a great thing for the game and for us. It’s a positive development for our players, our fans, and for the long-term future of the game.
“Golf is now viewed as an asset class. We proved this was possible and are now in a unique position to mold and drive this incredible growth opportunity. This broader interest and commitment to the game, and investment in its future, would not have happened without the emergence of LIV Golf as an innovative force in the golf ecosystem.
The PGA Tour announcement of the SSG deal said terms would allow for an investment by the PIF in the future “subject to all necessary regulatory approvals,” a nod to US lawmakers who have inquired into details of the Saudi plan.
“Today marks an important moment for the PGA Tour and fans of golf across the world,” said PGA Tour commissioner Jay Monahan, chief executive officer of the new PGA Tour Enterprises.
“By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour.”
– Unanimous player support –
PGA Tour Player Directors Tiger Woods, Adam Scott, Jordan Spieth, Webb Simpson, Peter Malnati and Patrick Cantlay said in a statement they were proud to give unanimous support to the new deal with SSG.
“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,” their joint statement said.
“This not only further strengthens the tour from a business perspective but it also encourages the players to be fully invested in continuing to deliver — and further enhance — the best in golf to our fans.”
John Henry, Fenway Sports Group’s principal owner and manager of SSG, was excited to hammer out final terms after months of talks.
“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,” he said.
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