The PGA Tour, DP World Tour and the Saudi Public Investment Fund (PIF), which backs LIV Golf, revealed Tuesday they would come together to establish a new entity, a move for their businesses that caused surprise among many involved in professional golf.
The announcement of the deal to "unify the game of golf, on a global basis" comes nearly 15 months after LIV Golf unveiled its first series and about a year after its first tournament. It also signaled the that dispute between the PGA Tour, its European tour and LIV Golf, which attracted some major golfers to join its lineup, will be coming to an end, including associated legal action.
FOX Business takes a closer look amid the announcement of the as-of-yet unnamed new golf entity.
LIV Golf, which has a 14-tournament series with a $405 million total purse this year, counts Phil Mickelson, Brooks Koepka, Sergio Garcia and others among the players it was able to bring to its tour. For some players who chose to join, it has given signing bonuses worth $100 million or higher, the Associated Press reported.
Meanwhile, golfers like Tiger Woods and Jon Rahm play on the PGA Tour. Both of those players said no to massive amounts of money as they declined to move to LIV Golf, according to reports.
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In the current state of play, participation of LIV Golf players in PGA Tour tournaments isn’t possible, but it is for The Open, U.S. Open, Masters and PGA Championship, Fox News previously reported.
The PGA Tour, DP World Tour and PIF said the agreement will include them "work[ing] cooperatively and in good faith to establish a fair and objective process for any players who desire to re-apply for membership" at the PGA Tour or European tour. That will involve them "determining fair criteria and terms of re-admission, consistent with each Tour’s policies," according to the release.
The PGA Tour, DP World Tour and PIF said in the news release that the new entity would have an exclusive investor, the Saudi sovereign wealth fund, plus the three leagues at the beginning. The PIF has Saudi Crown Prince Mohammed bin Salman Al-Saud as its chairman and Yasir Al-Rumayyan as its governor, along with about $620 billion assets under management, according to its website.
The PIF, which has been criticized in connection to human rights, will have investment exclusivity rights for the combined golf entity, something the three groups said included "a right of first refusal on any capital that may be invested in the new entity, including into the PGA TOUR, LIV Golf and DP World Tour." The new group will also get capital from the Saudi sovereign wealth fund.
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For LIV Golf’s original eight events in 2022, the PIF majority-owned LIV Golf Investments put up seed money to the tune of more than $400 million. The PIF has invested billions in LIV Golf, the New York Times reported.
Oversight of "commercial operations, businesses and investments" at the new golf giant will fall to the board of directors whose full slate will be revealed "at a later date," the three entities said. The release indicated that a majority of its members will be picked by the PGA Tour, which will also get a majority voting interest.
In the new entity, PGA Tour Commissioner Jay Monahan will serve as the CEO while Al-Rumayyan will take on the chairman position. Those two will also sit on the board’s executive committee.
PGA Tour Policy Board Chairman Ed Herlihy and board member Jimmy Dunne will have spots on that committee, too. The former has the position of co-chairman at law firm Wachtell, Lipton, Rosen & Katz; the latter works as senior managing principal at investment bank Piper Sandler, according to the PGA Tour board of directors website.
The PGA Tour Policy Board will see Al-Rumayyan join its ranks.
For the three golf leagues, administrative oversight of their events will stay in their respective hands. The PGA Tour will keep being a nonprofit, the news release said.
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The agreement to make a "collectively owned, for-profit entity" that will bring together the "commercial businesses and rights" of the three tours has brought their broadcasting rights into focus.
Two networks that broadcast the PGA Tour in the U.S. are CBS Sports and NBC Sports. An NBC Sports spokesperson told FOX Business they are "still learning more about the PGA Tour/LIV/DP World Tour announcement and look forward to discussing the announcement and its implications with our partners at the PGA Tour and DP World Tour."
The CW and LIV Golf have had a "multiyear" agreement since January under which the network serves as the league’s exclusive U.S. broadcasting partner.
"This is an exciting day to unify and grow the game of golf," the CW said to FOX Business. "There is no change to the LIV Golf event schedule for 2023 on The CW. We look forward to broadcasting seven more exciting tournaments this year featuring the world's best golfers."
