A filing describing the merger of the PGA Tour with Saudi-backed LIV Golf shows the deal’s broad outlines, but also how much of the biggest union in golf history still needs to be worked out.
(Bloomberg) — A filing describing the merger of the PGA Tour with Saudi-backed LIV Golf shows the deal’s broad outlines, but also how much of the biggest union in golf history still needs to be worked out.
The five-page provisional agreement, filed to US lawmakers and reviewed by Bloomberg News, was provided ahead of a July 11 hearing by a Senate panel investigating the merger. It discloses new details about the understanding between the two golf circuits, its leadership structure, and a potential path for LIV golfers who can’t play at any PGA Tour tournaments to return to the US Tour next year.
But the framework leaves out fundamental financial provisions of the merger. That includes the precise valuation of the circuits’ respective assets, the amount the Saudi fund will invest, how players will be compensated and any changes to deals and commercial rights of brands and others that do business with the pro golf leagues.
The merger, which blindsided golfers and fans when it was announced June 6, is far from a done deal. For one thing, the deal will need to pass antitrust scrutiny. The temporary agreement will end as soon as the circuits agree on definitive financial terms, or on Dec. 31 if they fail to do so, according to the filing.
Rough Framework
The new leadership structure puts PGA Tour Chairman Jay Monahan and governor of Saudi Arabia’s Public Investment Fund, Yasir Al-Rumayyan, in charge. The US golf circuit will maintain a controlling voting interest in the new entity. Monahan will be chief executive officer, while Al-Rumayyan will head the board, according to the filing.
The agreement also lets Monahan and Al-Rumayyan be at the helm as members of the new entity’s executive committee, which will also include PGA board Chairman Ed Herlihy and PGA board member Jimmy Dunne.
Read More: PGA Golfers Are Now Told to Love LIV After Forgoing Its Millions
PIF will pitch in golf assets, including those of LIV Golf, along with a cash investment in exchange for equity ownership in the entity dubbed NewCo in the framework agreement. The fund will pump in additional money with a right of first refusal on capital raised by NewCo.
In terms of player rights, the agreement says the new entity will set in motion “a fair and objective process” for any players who seek to return to the PGA Tour and DP World Tour after the 2023 tournament season ends. The accord calls for the combined circuit to do its best to secure Official World Golf Rankings — a rating system for golfers — for LIV golfers and events that are excluded from it.
The PGA Tour and Europe’s DP World Tour, which is also part of the global deal with LIV Golf, will contribute their commercial rights, including contracts with players in the pro golf business, but not certain non-operational assets such as corporate reserves and golfer retirement plans, according to the agreement.
“The framework outlines a future for professional golf under the PGA Tour’s leadership that benefits players, fans, and the sport,” a PGA Tour spokesperson said. “Any resulting agreement will have to be approved by the full board of the PGA Tour, including our player directors.”
A PIF representative declined to comment. Representatives for the DP World Tour, which is also a party in the deal, didn’t immediately respond to a request for comment.
Golf Tumult, Court Battle
LIV Golf’s emergence in pro golf last year prompted high-ranking and veteran players like Phil Mickelson and Bryson Dechambeau to switch to the Saudi-funded league that offered them lucrative deals. The PGA Tour responded by suspending the LIV players. The battle between the circuits splintered the world of pro golf and led to a heated antitrust court fight that was dropped when the deal was announced.
PIF will also invest to become a premier corporate sponsor of the PGA Tour and DP World Tour and will have a representative — the first being Al-Rumayyan — mutually picked by PIF and the Tour, on the US circuit’s policy board, according to the agreement. The PGA Tour’s policy board members include former AT&T Chairman Randall Stephenson and golfers Rory Mcllroy and Patrick Cantlay.
Senate panel chairman Richard Blumenthal, a Connecticut Democrat, last week asked Monahan and executives of PIF and LIV Golf to testify. Such invitations often make way for subpoenas and it’s unclear whether the executives have agreed to show up for questioning.
–With assistance from David Hellier.
(Updates with PIF response)
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