The PGA Tour has made a huge investment deal this week with a group of U.S.-based sports team owners, which Tour officials hope will help stabilize the organization financially, reward golfers more and provide a path to a more sustainable future for professional golf, even as the Tour continues negotiations with potential Saudi investors. Complete.
PGA Tour seals $1 billion deal with Strategy Sports Group
by aparodyoflife ·
The Tour Policy Board approved the investment at a meeting late Tuesday night, and its commissioner, Jay Monahan, briefed golfers on the details of the deal in a conference call Wednesday morning. The deal will allow the tour to create a new for-profit company called PGA Tour Enterprises that will oversee its business interests, with Sports Strategic Group (SSG) serving as a minority investor, the tour said in an announcement. The tour said the six tour directors, including Tiger Woods, unanimously supported the partnership.
The Tour originally planned to create the new entity alongside the Saudi Public Investment Fund, which owns LIV Golf, a competitive team-based golf circuit, but the two sides have yet to agree on terms nearly eight months after announcing their intention to join forces. . Although they faced a December 31 deadline to reach a final agreement, the two sides are still negotiating and remain hopeful that the Public Investment Fund will become an investor in the new business entity. SSG “has approved an investment by the Public Investment Fund, subject to any necessary regulatory review and approvals,” the round said.
Tour officials have spent the past several weeks in parallel negotiations with PIF and SSG, which is led by Fenway Sports Group, a Boston-based private holding company that owns the MLB’s Boston Red Sox, Fenway Park and Liverpool Football Club. League and the Pittsburgh Penguins of the NHL. The round said the initial investment in SSG amounts to $3 billion, and players will have the opportunity to receive more than $1.5 billion “in immediate and futures equity.” .
The news comes as the PGA Tour continues its early season schedule and just days before LIV Golf holds 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 past two years trying to shore up the fragile economy underpinning the sport, particularly after the launch of LIV Golf, which attracted many of the tour’s biggest names and led to a legal battle that cost the tour millions in fees. . The PGA Tour was unable to match some of the contract offers made to prominent golfers, such as Jon Rahm, Brooks Koepka, Cameron Smith and Dustin Johnson, and was seeking to mitigate the threat posed by LIV Golf while shoring up its difficult finances. .
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 MLB’s Milwaukee Brewers; Steve Cohen, owner of the New York Mets; Wick Groesbeck, owner of the NBA Boston Celtics; and Marc Lasry, former co-owner of the Milwaukee Bucks.
The tour promised to give players a share in the new project, which will be the first of its kind among major American sports leagues. The stock awards will vest over time, and “will depend on career accomplishments, recent accomplishments, future participation and service and PGA Tour membership status,” the tour said in its announcement.
While the Saudi Public Investment Fund remains an important stakeholder in the project, the Tour and SSG are expected to immediately begin charting the next steps for professional golf, which could impact everything from the competition schedule to tournament purses to what role players might play. Golf team. New scene.
Saudi Arabia’s Public Investment Fund was aware of the round’s talks with SSG, but continued to negotiate separately with the round, according to two people familiar with the situation. The Tour and the Saudis shocked the golf world when they announced their plans to enter into a partnership on June 6. They secretly negotiated the basic framework of a deal to bring their business interests under one umbrella, drop lawsuits against each other and begin working collaboratively. While opposing lawsuits were dropped in June, the two sides had until the end of last year to reach the terms of a final agreement, but have struggled to overcome some hurdles, including a congressional investigation and Justice Department scrutiny.
The June announcement surprised and upset many players and immediately caught the attention of both congressional regulators and the Justice Department who oversee mergers and were investigating the PGA Tour for possible antitrust violations. The disruption was immediate. Tour officials told lawmakers at a Senate subcommittee hearing last year that it was difficult to negotiate with so much public scrutiny. These officials also cautioned that final terms remain a long way off.
While drafting the details, tour officials tried to avoid any appearance of collusion — they even amended the initial agreement with the Public Investment Fund to remove a clause prohibiting poaching of players — and repeatedly told players that the tour was negotiating separately with SSG after the investment was made. Inquiries from a few other groups.
Meanwhile, LIV Golf has continued normal operations and has never abandoned its plans for the 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 El Camaleón Golf Course in Playa del Carmen, Mexico. This weekend it will go head-to-head with the AT&T Pebble Beach Pro-Am, one of eight tournaments designated by the PGA Tour as signature events.