PGA Tour secures up to $3 billion from U.S. investors as LIV Golf merger hangs in the balance

The PGA Tour logo is seen during the third round of the Travelers Championship at TPC River Highlands in Cromwell, Connecticut, on June 24, 2017.
Fred Kfoury | Icon Sportswire | Getty Images

A U.S. consortium has agreed to invest up to $3 billion into the PGA Tour, the professional golf organization announced on Wednesday.

Under the terms of the deal, the investor, Strategic Sports Group, will become a minority owner in PGA Tour enterprises, the for-profit entity of the PGA Tour. The group will make an initial investment of $1.5 billion in the tour. It is unclear when and how the up to $1.5 billion in additional funding will go to the PGA Tour.

The agreement comes as the organization tries to plot out its future in the face of competition from the upstart LIV Golf and a proposed merger with the Saudi-funded league. The Tour confirmed progress on its ongoing negotiations with PIF on a potential future investment and its discussions with the DP World Tour.

“Today marks an important moment for the PGA Tour and fans of golf across the world,” PGA Tour Commissioner Jay Monahan said.

The deal received unanimous support from the PGA Tour player directors.

As part of the new agreement with Strategic Sports Group, the Tour said nearly 200 players will have the opportunity to receive equity participation in the Tour the league said. These would be awarded in the form of grants, which vest over time — and would be based on their career accomplishments and future participation and services with the Tour.

“By making PGA Tour members owners of their league, we strengthen the collectives investment of our players in the success of the PGA Tour,” Monahan said.

Strategic Sports Group is led by Fenway Sports Group’s John Henry. It includes a variety of investors, private equity names and sports owners, including Atlanta Falcons owner Arthur Blank, New York Mets Owner Steve Cohen, Chicago Cubs chairman Tom Ricketts and Boston Celtics owner Wyc Grousbeck.

“Our enthusiasm for this new venture stems from a very deep respect for this remarkable game and a firm belief in the expansive growth potential of the PGA Tour,” said John Henry, principal owner of Fenway Sports Group and manager of the Strategic Sports Group.

Monahan and Henry held a players-only call to share the news with members Wednesday morning.

The investment comes at a pivotal time for professional golf. The tumultuous rivalry between the PGA Tour and Saudi Public Investment Fund-backed LIV Golf has divided players, and a merger could dramatically change the sport.

The PGA Tour-LIV deal was first announced in June, when Commissioner Jay Monahan and Saudi Public Investment Fund Governor Yasir Al-Rumayyan announced the news on CNBC. It came as a surprise to many, as the two competing leagues were engaged in a bitter legal feud at the time.

Critics claimed that the deal was a means for Saudi Arabia to gain influence in the U.S. through sports investments. Saudi Crown Prince Muhammad bin Salman controls the PIF.

LIV Golf, launched in 2022, formed as a rival league to the Tour. By offering lucrative prize money and signing bonuses, the Saudi-owned tour was able to lure away top players like Phil Mickelson, Dustin Johnson, Brook Koepka and John Rahm.

The PGA Tour-LIV golf deadline was originally set for Dec. 31. Monahan previously told players the organizations were extending the deadline based on the progress they had made to date. A formal decision on the combination is expected to take place ahead of the Masters Tournament in April.

The deal is subject to Justice Department and regulatory approval.

Articles You May Like

90% of qualifying electric-vehicle buyers opt for $7,500 ‘new clean vehicle’ tax credit as upfront payment, Treasury says
Here’s how Biden’s new student loan forgiveness plan differs from his first
These are the 5 groups of borrowers eligible for Biden’s new student loan forgiveness plan
Fewer students are graduating from college, but certificate programs are way up
Wells Fargo is flat after an earnings beat — here’s why and our outlook on shares

Leave a Reply

Your email address will not be published. Required fields are marked *