Despite the initial announcement of a controversial collaboration with LIV Golf in June, the PGA Tour has managed to strike a new major deal focused on equity with some of the top sports owners.
PGA Tour finalizes Strategic Sports Group deal, remains in talks with LIV Golf parent PIF https://t.co/9hLhejLUB1 pic.twitter.com/Gy1h006BOG
— Awful Announcing (@awfulannouncing) January 31, 2024
The initial proposal for the PGA Tour to combine with LIV Golf, owned by Saudi Arabia’s Public Investment Fund, met considerable resistance. This opposition led the PGA Tour to seek alternative sources of financing.
Multiple proposals were pondered following the LIV Golf controversy, including a bid from Endeavor, a company which had considered an investment in LIV. However, none of these proposals came to realization.
The financial backing ultimately came from a collective of distinguished sports owners. This group included Fenway Sports Group, owner of Boston Red Sox, Pittsburgh Penguins, and Liverpool FC, along with noteworthy figures, such as New York Mets owner Steve Cohen, Chicago Cubs chairman Tom Ricketts, and Atlanta Falcons owner Arthur Blank.
Though the new equity deal has been confirmed, this does not exclude the possibility of a further deal with the Saudis.
As reported on Wednesday morning by the Washington post:
The tour’s policy board approved the investment at a meeting late Tuesday night, and its commissioner, Jay Monahan, was expected to brief golfers on details of the deal on a conference call Wednesday morning. The deal is expected to help the tour create a new for-profit company that will oversee the its commercial interests, with the Strategic Sports Group (SSG) serving as a minority investor.
The tour originally planned to create the new entity alongside the Saudi Arabia Public Investment Fund, which owns LIV Golf, a rival team-based golf circuit, but the two sides have yet to agree to terms nearly eight months after announcing their intention to join forces. Though they faced a Dec. 31 deadline to reach a final deal, the two sides are still negotiating and remain hopeful the PIF will become an investor in the new commercial entity, according to two people familiar with the discussions who spoke on the condition of anonymity because of the sensitivity of the discussions.
Tour officials have spent the past several weeks deep in parallel negotiations with the PIF and the SSG, which is led by Fenway Sports Group, the Boston-based private holding company that owns MLB’s Boston Red Sox, Fenway Park, Liverpool Football Club of the Premier League and the NHL’s Pittsburgh Penguins. The initial SSG investment is expected to be around $3 billion, according to one person familiar with the deal.
…The tour, which operates as a nonprofit organization, is expected to launch a new for-profit entity called PGA Tour Enterprises, which 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-tier U.S. sports leagues. About half the SSG investment is expected to help fund equity grants to tour members, according to a person familiar with the deal.
In the meantime, LIV Golf is proceeding with its season-opening event at Mayakoba’s El Camaleón Golf Course in Playa del Carmen, Mexico, as PGA’s new deal unfolds.
With the conclusion of the deal, PGA Tour may undergo significant changes. All eyes are on what the future holds for this globally-acclaimed Tour as it moves forward with this groundbreaking equity deal.
