'I Don't Think That It's Needed': With New Investment Deal, PGA Tour Players See Possible Future Without LIV Golf's Backer
PEBBLE BEACH, Calif. — For the first time in a long time the PGA Tour went on the offensive Wednesday, announcing an investment of up to $3 billion into newly created PGA Tour Enterprises by Strategic Sports Group (SSG).
Characterized as a partnership in a two-page press release, the relationship between the two entities opens a new chapter in how the Tour operates and will expand its business in the future.
Jordan Spieth, one of six PGA Tour player directors, said in a press conference that the new venture headed up by current PGA Tour Commissioner Jay Monahan will rely heavily on the 13 entities involved in SSG. That includes Fenway Sports Group, whose ownership includes the Boston Red Sox, Liverpool F.C. and the Pittsburgh Penguins; John Henry, principal of FSG; Steve Cohen, owner of the New York Mets and Arthur Blank, owner of the Atlanta Falcons.
PGA Tour player director Jordan Spieth said players' stakes in PGA Tour Enterprises would be determined by a formula and explained in the next 30 days.
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“Obviously having some big guns behind us, some backup and the strategery that this group offers was actually something that was very important when we were looking at it,” Spieth said. “So, to have I think it's like 200 years of sports-owning experience, the idea they can help navigate in our future how content will be consumed when our next media deals are up, stuff like that, to have these partners in perpetuity, I don't think that can be overlooked. You talk about the funding, but really the strategies that they can have in navigating that space will be very important.”
While the information was limited in what the new entity will do beyond continue to host professional golf tournaments, it was hard to find a player that was not excited about the possibility but still looking for more clarity.
“I like to think yes, I guess time will tell,” said 24-year Tour veteran Matt Kuchar when asked if the new deal was positive for the Tour. “I think there's a lot of opportunity and a lot of potentially good that can come from this.”
At the same time, Kuchar echoed the thoughts of many about the lack of specifics regarding the new for-profit company, PGA Tour Enterprises, namely what will have the initial $1.5 billion investment and how the new entity will generate revenue.
“We got a two-page release that basically said, they put in $1.5 billion now to partner with the PGA Tour, not exactly sure the details of what that what that means just yet," Kuchar said.
Spieth, privy to the discussions as part of the player-director group voting unanimously in favor of the deal, explained that players would receive grants—effectively stock in PGA Tour Enterprises—with the amount to be determined by a formula which will be explained to players over the next 30 days.
“I don't know what individuals receive how much equity,” Spieth said. “I don't even know how much I receive because I haven't asked the question. But I know "ish" how it's determined and how it will continue to be as these new grants go in each year. And so yeah, within 30 days everyone should have a very clear picture.”
One issue that was not addressed was if the Public Investment Fund of Saudi Arabia will eventually be a partner of this new company.
Wednesday's statement said only that the transaction allows for a co-investment from the PIF in the future, subject to all necessary regulatory approvals.
Since the framework agreement was announced on June 6 between the PGA Tour and the PIF, the two sides have been negotiating but with no resolution. The initial timeframe for a definitive deal of Dec. 31 came and went.
While both sides agreed to continue discussing a potential deal and hopefully have an agreement by the Masters, the number first discussed in the $300 to $400 million range seems to pale in comparison to the billions now offered by SSG.
With the Department of Justice holding the keys to a potential deal and with a large percentage of players uneasy with PIF involvement, this new SSG investment could throw cold water on any linkup between the PGA Tour and PIF.
“I don't think that it's needed,” Spieth said of a PIF investment. “I think the positive would be a unification, but I think that, like I mentioned before, I just think it's something that is almost not even worth talking about right this second given how timely everything would be to try to get it figured out.”
While many questions remain unanswered regarding how the money will be used, the DP World Tour’s involvement in the new entity, the future of PIF discussions and how will the Tour create value for its new shareholders, the day belonged to a PGA Tour that has had little good news to share.
