The PGA Tour has struck a deal worth up to $3 billion with Strategic Sports Group.
The new commercial venture will be named PGA Tour Enterprises, which the tour will assume control of, and over $1.5 billion will be accessible as equity to the players.
This grant will be distributed over time and will be based on career accomplishments, recent achievements, future participation and services and PGA Tour membership status.
Nearly 200 PGA Tour players can become equity holders. SSG’s initial $1.5 billion investment will be targeted at revenue generation, the benefits of each tour member and enhancing the game around the world.
SSG, a consortium of US sports team owners led by Fenway Sports Group who own Liverpool Football Club of the Premier League, has also consented to an investment from the Public Investment Fund of Saudi Arabia “subject to any necessary regulatory review and approvals.”
The announcement will allow for a co-investment from the PIF, the sovereign wealth fund that financially backs LIV Golf, but an ultimate agreement is yet to be confirmed on that front.
Progress has been made between the tour and PIF, while the tour’s strategic alliance with the DP World Tour also “remains a focus.”
“Today marks an important moment for the PGA Tour and fans of golf across the world,” Monahan wrote as part of the announcement.
“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 together 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 organisation’s ability to make the sport more rewarding for players, tournaments, fans and partners.”
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According to Sean Zak of Golf.com, PGA Tour Enterprises will have a 13-person board made up of seven players (six of which are the six PGA Tour Policy Board player directors), four figures from SSG, Monahan and an additional director from the Policy Board.
“We were proud to vote in unanimous support of this historic partnership between PGA Tour Enterprises and SS,” the PGA Tour’s player directors said in a statement.
“It was incredibly important for us to create opportunities for the players of today and in the future to be more invested in their organisation, both financially and strategically.
“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 you our fans. We are looking forward to this next chapter and an even brighter future.”
SSG-PGA Tour deal is complete, but talks with the PIF go on…
The PGA Tour announced a framework agreement with the PIF in June 2023 and a deadline was set on December 31. Reports now say the Masters could be a cut-off, potentially coinciding with Keith Pelley’s departure from his role as DP World Tour chief executive on April 2.
ESPN reported in October that the PGA Tour had received interest from outside investors. These took the shape of private equity candidates and subsequently, SSG became the one to partner with the tour.
The tour’s talks with SSG somewhat leapfrogged the progress made with the PIF which backs a breakaway tour that has recently poached stars such as Jon Rahm and Tyrrell Hatton from the entity it is trying to compromise with.
Players such as Rory McIlroy have spoken in recent weeks of their desire for an agreement to be reached in this regard.
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“Competition is good to help improve the sport of golf overall, but the PGA Tour competing with LIV and the Saudi’s money is completely unsustainable,” McIlroy said on the Stick to Football podcast.
“You’re never going to win a fight if you’re going money for money because we’ve seen that in other sports where no one is spending money like the Saudis.
“So how can you tilt the odds in your favour so that you can make your product better, that you can make fans want to engage with you more?
“I think that’s how the PGA Tour can “win this fight”, because negotiations are going on and everyone is trying to come back together, which I think would be good for golf.”
What does this mean for the DP World Tour?
Pelley himself has answered this question in a memo to the DP World Tour membership:
“First thing to say is that the game of golf as we know it is changing and I believe this provides the opportunity for unity.
“Secondly, as it says in the press release, negotiations involving ourselves the PGA Tour and the PIF are still ongoing and I believe this announcement gives continued momentum to those discussions as well as being an important step to possible overall alignment between all four entities, SSG included.
“Thirdly. the SSG, led by their principal investor, the Fenway Sports Group, are unquestionably impactful in the US, but more importantly, they have a distinct global focus – it is the reason FSG became owners of Liverpool Football Club in 2010 for example.
“Such global focus, as I outlined to the media and to many players during my recent two weeks in Dubai, is crucial to the forward momentum of the game and it is important that this latest entrant into our sport has this as part of their thinking.
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“Finally, for the avoidance of any doubt, our current strategic alliance with the PGA Tour which guarantees our prize funds and the Ten Cards initiative, remains firmly in place.”
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