Amid growing discontent, PGA Tour board ensures players' involvement in PIF partnership
- Michael Schmitt
- 28 June 2023
A leaked framework agreement on the upcoming merger seemed to raise more questions than answers as the world's best players wait with bated breath to learn their fate.
In an effort to reassure the players, the PGA Tour stated on Tuesday that they would have a significant role in determining the tour's merger with the Saudi funders of LIV Golf.
The policy board, consisting of Patrick Cantlay, Rory McIlroy, Charley Hoffman, Peter Malnati, and Webb Simpson, released a statement emphasizing that players would need to grant approval for any final agreement between the previously competing tours.
The statement was issued following a board meeting held to address concerns.
On Monday evening, media sources obtained the framework agreement between the traditional tours and the Saudis, revealing that the PGA Tour and DP World Tour would collaborate with their new partners in deciding the process for reintegrating players who defected to LIV Golf and the appropriate consequences they should face.
However, the lack of specific information outlined in the framework agreement has left players frustrated.
The agreement, which was negotiated confidentially by PGA Tour commissioner Jay Monahan, two independent board members, and Yasir Al-Rumayyan, the governor of Saudi Arabia's Public Investment Fund, led to the dismissal of all ongoing lawsuits as part of the deal.
"Entering the framework agreement put an end to costly litigation. Management, with input from our player directors, has now begun a new phase of negotiations to determine if the tour can reach a definitive agreement that is in the best interests of our players, fans, sponsors, partners, and the game overall," the PGA Tour Board's statement said.
"If future negotiations lead to a proposed agreement, it would need approval by the tour's policy board, which includes player directors. In the meantime, we are all committed to the safeguards in the framework agreement that ensure the PGA Tour would lead and maintain control of this potential new commercial entity."
The leaked framework agreement, signed on May 30, says a for-profit subsidiary of the US golfing body will be created to manage commercial investments and assets for all tours and will be the "entity for professional golf".
The agreement says the PGA Tour would keep a controlling interest in the new commercial entity - known for now as "NewCo" - regardless of how much Saudi Arabia's Public Investment Fund (PIF) contributes.
NewCo will conduct an "objective empirical data-driven evaluation of LIV and its prospects and potential" while also examining the benefits of team golf before deciding "how best to integrate team golf into PGA Tour and DP World Tour events going forward".
NewCo would be an umbrella for all future golf-related investments of the three groups.
It plans to create financial returns through "targeted mergers and acquisitions to globalize the sport."
Meanwhile, the PIF is set to invest in both the PGA and DP World Tours as a "premier corporate sponsor".
The document said that it hopes to reach a definitive deal by December 31, 2023.
The framework agreement is likely to be a focus of a US Senate panel on 11 July where PGA Tour commissioner Jay Monahan, Saudi Arabia's Public Investment Fund Governor Yasir Al-Rumayyan and LIV Golf CEO Greg Norman have been invited to testify.
The proposed deal has come under criticism from some US politicians, citing concerns about the risks posed by a foreign government entity assuming control over the sport.
