The PGA Tour and Saudi Arabia’s Public Investment Fund, the main backer of LIV Golf, reach a deal that ends litigation and seeks to "to unify the game of golf"
In a swift and stunning move, the PGA Tour and PIF (Public Investment Fund) — Saudi Arabia’s sovereign wealth fund whose assets include LIV Golf — announced Tuesday that they have agreed in a memorandum to a merger that includes the DP World Tour.
After about two years of acrimony between the PGA Tour and LIV Golf, in which Tour commissioner Jay Monahan banned all LIV Golf players from competing on the PGA Tour and said he would refuse to meet with LIV Golf, the announcement sent seismic shock waves throughout the golf world.
Monahan held a closed-door players meeting Tuesday afternoon at the RBC Canadian Open that was expected to be long and contentious.
The merger will create a new, for-profit company — as yet to be named — that will include "the commercial businesses and rights of the PGA Tour and DP World Tour," according to a joint statement. The company will be a limited liability corporation (LLC) and will be jointly owned by the three entities.
Immediately, ongoing litigation between LIV Golf and the PGA Tour will end.
"After two years of disruption and distraction, this is a historic day for the game we all know and love," Monahan said.
For the future, the new company — which Monahan called “Newco” in an interview on CNBC that included PIF Governor Yasir Al-Rumayyan — will shift some of the Tour’s assets and will receive potentially billions of dollars of investment from PIF as the new company’s exclusive investor.
"Today is a very exciting day for this special game and the people it touches around the world," Al-Rumayyan said. "We are proud to partner with the PGA Tour to leverage PIF’s unparalleled success and track record of unlocking value and bringing innovation and global best practices to business and sectors worldwide. We are committed to unifying, promoting and growing the game of golf around the world and offering the highest-quality product to the many millions of long-time fans globally, while cultivating new fans.
“There is no question that the LIV model has been positively transformative for golf. We believe there are opportunities for the game to evolve while also maintaining its storied history and tradition. This partnership represents the best opportunity to extend and increase the impact of golf for all. We look forward to collaborating with Jay and Keith to bring the best version of the game to communities around the world.”
Keith Pelley, Chief Executive of the DP World Tour on today's landmark agreement between DP World Tour, PGA TOUR and PIF. pic.twitter.com/ezV07DQKnQ
— DP World Tour (@DPWorldTour) June 6, 2023
PGA Tour Inc., will continue as a 501(c)(6) tax exempt organization and will "retain administrative oversight of Tour events for those assets contributed by the PGA Tour, including the sanctioning of events, the administration of the competition and rules, as well as all other ‘inside the ropes’ responsibilities," the statement said.
In reaction to LIV Golf, with its nine-figure up-front payments to marquis players and hefty purses, the PGA Tour created a series of "designated events," with limited fields, some with no cuts and purses of $20 million or more. LIV Golf’s format, which has been roundly criticized by people outside LIV, is 48-player, no-cut fields with $25 million purses.
Under the merger, Monahan will continue as PGA Tour Commissioner and Ed Herlihy as Policy Board Chairman. Al-Rumayyan will join the PGA Tour Policy Board.
The new company’s board of directors will include Al-Rumayyan as chairman and Monahan as chief executive officer. The board will also include an executive committee comprised by Al-Rumayyan, Monahan, Herlihy and Tour Policy Board member Jimmy Dunne. The full Board will be announced at a later date, and it is anticipated that all three founding members will have representation.
In fact, it was Dunne — one of golf’s best-known insiders — who brokered the meeting between Monahan and Al-Rumayyan, which took place in London at an undisclosed date and location. After a round of golf between two lunches and much discussion, the deal was struck. "We covered everything," Al-Rumayyan said.
Keith Pelley, CEO of the DP World Tour, said, "This is a momentous day. We are delighted to be able to not only reignite our relationship with PIF, but also to have the opportunity to build on our current Strategic Alliance partnership with the PGA Tour. Together we will be stronger than ever and well positioned to continue to bring the game to all corners of the globe. To partner in this new entity and influence the growth of the game for all our DP World Tour members is energizing and exciting.”
The merger will create a process for banned LIV Golf players players to re-apply for membership in the PGA Tour and/or the DP World Tour following the end of the 2023 season. It is expected that LIV Golf’s 2023 season will continue as planned.
There was no mention of World Golf Hall of Famer Greg Norman, LIV Golf’s CEO and commissioner, although one source told Sports Illustrated that it appears he will not be part of any new venture.
PGA TOUR, PIF HEADLINES
> PGA Tour and European tour agree to merge with Saudis and end LIV Golf feud
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> Updates: PGA and LIV merger — deal increases Saudi Arabia’s influence in golf
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> Saudi Arabia to spend billions on shock merger of PGA Tour and LIV Golf
[Samuel Agini / Arash Massoudi / Sara Germano / Sujeet Indap | Financial Times | Read ($)]
> PGA Tour’s letter to players outlines framework for LIV Golf, DP World Tour merger
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> How did PGA Tour players learn about LIV Golf merger? Mostly on Twitter, like you
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> LIV Golf CEO Greg Norman didn't know about LIV Golf-PGA Tour merger, according to Saudi Arabia PIF governor
[Joel Beall | Golf Digest | Read]
> PGA Tour deal with LIV reduces elite golf to public relations for a tyrant
[Eamon Lynch | Golfweek | Read]
> In one stunning and silent move, Jay Monahan brings in billions and kills LIV Golf
[Michael Rosenberg | Sports Illustrated | Read]
> A complete timeline of LIV Golf, leading up to PGA Tour merger
[Ricky Hamel | Golfweek | Read]
> A dummy’s guide to the LIV/PGA Tour merger: Answering 21 burning questions
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