The PGA Tour has struck a major deal involving equity, but it’s not the one initially announced last summer. In June, the tour announced a controversial deal to combine with LIV Golf, owned by Saudi Arabia’s Public Investment Fund. But amidst blowback to that, the tour started looking elsewhere for financing, and they’ve now found it from a collection of prominent sports owners.
Getting to this point has been a long process. There were several proposals discussed along the way following the June LIV Golf announcement, including a bid from Endeavor (which had previously contemplated a LIV investment). And while none of those came to fruition, neither did the LIV deal (at least not by the Dec. 31 deadline in the initial plan).
But in recent weeks, talk intensified about an investment from owners of teams in other sports, led by Boston Red Sox/Pittsburgh Penguins/Liverpool parent Fenway Sports Group and also including the likes of New York Mets owner Steve Cohen, Chicago Cubs chairman Tom Ricketts, and Atlanta Falcons owner Arthur Blank. And that deal’s now been done, but it doesn’t prohibit a further deal with the Saudis, as Rick Maese of The Washington Post reported Wednesday morning:
The tour’s policy board approved the investment at a meeting late Tuesday night, and its commissioner, Jay Monahan, was expected to brief golfers on details of the deal on a conference call Wednesday morning. The deal is expected to help the tour create a new for-profit company that will oversee the its commercial interests, with the Strategic Sports Group (SSG) serving as a minority investor.
The tour originally planned to create the new entity alongside the Saudi Arabia Public Investment Fund, which owns LIV Golf, a rival team-based golf circuit, but the two sides have yet to agree to terms nearly eight months after announcing their intention to join forces. Though they faced a Dec. 31 deadline to reach a final deal, the two sides are still negotiating and remain hopeful the PIF will become an investor in the new commercial entity, according to two people familiar with the discussions who spoke on the condition of anonymity because of the sensitivity of the discussions.
Tour officials have spent the past several weeks deep in parallel negotiations with the PIF and the SSG, which is led by Fenway Sports Group, the Boston-based private holding company that owns MLB’s Boston Red Sox, Fenway Park, Liverpool Football Club of the Premier League and the NHL’s Pittsburgh Penguins. The initial SSG investment is expected to be around $3 billion, according to one person familiar with the deal.
…The tour, which operates as a nonprofit organization, is expected to launch a new for-profit entity called PGA Tour Enterprises, which will oversee all of its commercial interests. The tour has promised to give players an equity stake in the new venture, which would be a first among top-tier U.S. sports leagues. About half the SSG investment is expected to help fund equity grants to tour members, according to a person familiar with the deal.
This came with a player advisory group conference call Wednesday morning at 8 a.m. Eastern, with a call with all players set for 9:30 a.m. Eastern. And that’s somewhat unfortunate timing, with many of those players on the West Coast for the AT&T Pebble Beach Pro-Am. Meanwhile, LIV Golf has its own season-opening event this weekend at Mayakoba’s El Camaleón Golf Course in Playa del Carmen, Mexico.
There’s a lot still to be determined on just what’s ahead for the PGA Tour, which may undergo significant change on everything from schedule to formats in the wake of this deal. And there’s potential for further change here, with talks with the PIF continuing as well and the possibility of a PGA-LIV merger still not out of the question. But it’s notable to see this one particular deal cross the finish line.
