The PGA Tour struck a massive investment deal this week with a group of U.S. sports team owners that tour officials hope will help stabilize the organization's finances, further reward tour golfers and even give professional golf a boost Paving the way to a more sustainable future as the tour continues negotiations with potential Saudi investors.
The Tour's policy committee approved the investment at a meeting late Tuesday night, and its commissioner, Jay Monahan, was scheduled to brief golfers on details of the deal in a conference call Wednesday morning. The deal is expected to help the tour create a new for-profit company to manage its commercial interests, with Strategic Sports Group (SSG) acting as a minority investor.
The tour had originally planned to form the new entity with the Saudi Arabia Public Investment Fund, which owns LIV Golf, a rival team-based golf club. However, the two sides have still not agreed on terms nearly eight months after announcing their intention to join forces. Despite facing a Dec. 31 deadline for a final agreement, the sides are still negotiating and remain hopeful that PIF will become an investor in the new commercial venture, according to two people familiar with the talks who spoke on condition of anonymity Sensitivity of negotiations.
Tour officials have been engaged in intensive parallel negotiations in recent weeks with the PIF and the SSG, which is run by Fenway Sports Group, the Boston-based private holding company that includes the MLB Boston Red Sox, Fenway Park and Liverpool Football Club of the Premier belongs to the league and the NHL's Pittsburgh Penguins. The initial SSG investment is expected to be around $3 billion, according to a person familiar with the deal.
The news comes as the PGA Tour continues its early-season schedule and just days before LIV Golf is set to host its season-opening event in Mexico. For now, the Tour and LIV Golf remain locked in a rivalry that has divided the golf world, competing for talent, fans and sponsors.
The Tour has spent much of the last two years trying to shore up the sport's shaky economic situation, particularly after the launch of LIV Golf, which attracted many of the Tour's biggest names and sparked a legal battle that cost the Tour millions in fees. Unable to keep up with some contract offers from big-name golfers such as Jon Rahm, Brooks Koepka, Cameron Smith and Dustin Johnson, the PGA Tour had sought to mitigate the threat posed by LIV Golf while shoring up its own struggling finances.
A spokesman for SSG did not immediately respond to a request for comment.
The investment group includes Red Sox owners John Henry and Tom Werner; Arthur Blank, who owns the NFL's Atlanta Falcons; Mark Attanasio, owner of the MLB's Milwaukee Brewers; Tom Ricketts, chairman of the MLB's Chicago Cubs; Steve Cohen, owner of the New York Mets; Wyc Grousbeck, owner of the NBA's Boston Celtics; and Marc Lasry, the former co-owner of the Milwaukee Bucks.
The tour, which operates as a nonprofit organization, is expected to create a new for-profit entity called PGA Tour Enterprises that 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 U.S. sports leagues. About half of the SSG investment will be used to fund equity grants for tour members, according to a person familiar with the deal.
While the Saudi PIF could still be a key stakeholder in the endeavor, the Tour and the SSG are expected to immediately begin mapping out the next steps for professional golf, which could impact everything from the competition schedule to tournament funding on the role that team golf could play in the new landscape.
The Saudi PIF was aware of the Tour's discussions with the SSG but continued to negotiate separately with the Tour, according to two people familiar with the situation. The tour and the Saudis shocked the golf world when they announced their plans for a partnership on June 6. They had secretly negotiated the basic framework of a deal to unite their commercial interests under one roof, end their legal disputes against each other and begin working together. While the dueling lawsuits were dropped in June, both sides had until the end of last year to negotiate the terms of a final agreement but struggled to overcome some hurdles, including a congressional investigation and scrutiny from the Justice Department.
The June announcement surprised and angered many players and immediately drew interest from both congressional and Justice Department regulators, who monitor mergers and investigate the PGA Tour for possible antitrust violations. The turbulence was immediate; Tour leaders told lawmakers at a Senate subcommittee hearing last year that it was difficult to negotiate with so much public scrutiny. Those officials also warned that final terms were still some way off.
As they hammered out details, Tour officials tried to avoid any appearance of collusion – they even amended the tentative agreement with the PIF to remove a provision prohibiting poaching of players – and repeatedly told players that the Tour after providing investments separately with the SSG negotiated requests from some other groups.
LIV Golf, meanwhile, continued normal operations and never abandoned plans for a 2024 schedule. LIV signed Rahm last month, one of its biggest coups, and officials there are still operating with significant financial support from LIV's Saudi owners. Rahm will make his LIV debut at the circuit's season-opening event, which begins Friday at Mayakoba's El Camaleón Golf Course in Playa del Carmen, Mexico. This weekend will be head-to-head with the AT&T Pebble Beach Pro-Am, one of eight tournaments the PGA Tour designates as signature events.
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