After months of anticipation, the PGA Tour finally went ahead and announced its latest deal with Strategic Sports Group on Wednesday to sponsor the tour financially. Added to that, the name of the new for-profit entity was decided as PGA Tour Enterprises. But this announcement triggers certain questions that still remain unanswered.
But Didn’t The PGA Tour Sign A Merger With LIV In June?
The PGA Tour announced a merger with the PIF in June but there wasn’t any official agreement. However, the parties agreed on setting up a framework by December, which was later extended to April. Added to that, the PGA Tour players were offended by the secrecy of the deal and it being carried out under the table, so to sort out the matter, PGA Tour commissioner Jay Monahan affirmed that things would be kept transparent while deciding on the framework. Also, the US government had a few antitrust issues with the nature of the initial deal, so a new financial backer is always helpful. This came about as a decision by the player directors and changes started happening after Tiger Woods was installed as the player director on the PGA Tour Policy Board.
So, What Was The Announcement On Wednesday About And What Is The PGA Tour Enterprises?
The endeavor was called PGA Tour Enterprises, a for-profit entity with a backup of $3 billion from the Strategic Sports Group, with an initial investment of $1.5 million already locked and loaded. This new entity will govern the business and rights of the PGA Tour and the DP World Tour. Initially, the PIF was also supposed to invest $1 billion in this initiative and come under the same umbrella but as per a report, the PIF isn’t involved.
The PGA Tour has finalized an agreement with Strategic Sports Group, injecting about $3 billion of cash into a new for-profit entity.
Investors include:
• Tom Werner & John Henry (Boston Red Sox)
• Mark Attanasio (Milwaukee Brewers)
• Arthur Blank (Atlanta Falcons)
• Wyc… pic.twitter.com/A5v8UcfAL1— Joe Pompliano (@JoePompliano) January 31, 2024
Currently, PGA Tour Enterprises has a total valuation of $12 billion.
Who Is Part Of The SSG?
The SSG is composed of several sports investors and is fronted by FSG. It has the Boston Red Sox, Liverpool SC, Pittsburgh Penguins, and others under the same umbrella. It also controls Fenway Park and has members like Arthur Blank, Marc Lasry, among others. Several of its ventures have stakes in the TGL, Tiger Woods’ tech-based league due to launch next year.
As of now, the PGA Tour Enterprises will be controlled by the PGA. Tour Jay Monahan will be the CEO and FSG will own a minority stake. Added to that, Yasir Al-Rumayyan, who was supposed to be the CEO, wasn’t mentioned in Wednesday’s announcement. The PGA Tour Enterprises will have four members of the SSG and seven PGA Tour members.
How Will Golfers Benefit From This Venture?
The PGA Tour golfers can have equity in the entity and more than 200 golfers can own stakes. Also, $1.5 billion will be given on equity based on “accomplishments, recent achievements, future participation and services and PGA Tour membership status, and grants are only available to qualified PGA Tour players.”
In this for-profit entity, the tour also clarified that down the line, LIV will be involved. “Allows for a co-investment from the Public Investment Fund (PIF) in the future, subject to all necessary regulatory approvals.” But sources informed that PIF wasn’t welcoming about private equity and that is why Jon Rahm switched to LIV Golf. This may spark a future civil war.
So Who Benefits From This Deal?
It provides a sense of security for the tour so that the best players would stay back. But to the dismay of the ones who expected that everything was coming under the same umbrella, seemingly the golf war has again begun and Rahm’s move was the instigation of that.
