After Marathon Meeting, PGA Tour Players Appear Ready to Work With Saudi Public Investment Fund
DEARBORN, Mich. – The PGA Tour Policy board met for more than five hours in Dearborn, Mich., Tuesday, and spent more than half of it on its looming partnership with Saudi Arabia’s Public Investment Fund, covering a range of issues from economic to procedural. In the end, it was only one day of a complicated process, but it was an important day, simply because it shows the players, and the public, that after the initial shock and grumbling from players, the Tour is where commissioner Jay Monahan hoped it would be: On the path to a business partnership with PIF.
Everybody on the 10-member board attended the meeting in person, including players Rory McIlroy, Patrick Cantlay, Webb Simpson, Charley Hoffman and Peter Malnati, a person familiar with the discussion said afterward. Monahan, who is on medical leave, was not there and did not call in. Chief of Operations Tyler Dennis and Chief Operating Officer Ron Price, who are leading the Tour in Monahan’s absence, both attended the meeting.
The board released a statement afterward saying, in part: “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 of interests of our players, fans, sponsors, partners, and the game overall. That was the focus of our productive Policy Board meeting this afternoon, with valuable and crucial input and perspective from the membership through our Player Directors.”
The board added that “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.”
Many details of the potential deal are to be determined. But the basic structure is in place:
The Tour would control the structure of golf moving forward – including whether PIF’s LIV Tour continues operations, and if so, in what form. The Tour has promised a “good-faith” evaluation of LIV’s viability, though potential penalties for LIV players who apply for PGA Tour reinstatement have already been discussed. The parties have set a deadline of the end of 2023 to reach a deal, and that condensed timeline means that 2024 could be a transition year for the sport.
The PGA Tour, European Tour and LIV Tour’s assets would all go into a separate company, of which the Tour would have controlling interest. PIF would then be an investor in that company with the right of first refusal for future investments.
How this would work, at the outset: Each entity is hiring outside firms to value its assets, which include everything from real estate to media and sponsorship rights. (Representatives from Allen and Company, an investment bank, attended the board meeting and explained the valuation process but did not get into specific valuations.) The parties would then mutually agree on proper valuations for each.
Those assets would then be put in a new company. PIF would then purchase a percentage of that company – likely infusing the Tour with billions of fresh capital, since the Tour’s assets are far more valuable than either other Tour’s. PIF would be able to profit off its investment and also have the right of first refusal to buy a piece of any future deals. But the Tour would have “full decision-making authority” over the company and future investments. PIF governor Yasir Al-Rumayyan would get to appoint one person to a seat on the Tour’s policy board.
When the deal was announced June 6, Tour players initially expressed shock at being kept in the dark and outrage that they stayed loyal to the Tour when they could have left for fortunes. The policy board has been addressing both concerns. It continues to canvas members for their views and hold meetings to rally support and keep players informed – and, though no details are close to being decided, assuaging players’ economic concerns is a priority. The initial buy-in from PIF could be used, in part, to compensate PGA Tour players who resisted LIV’s overtures.
The policy board is not scheduled to meet again until November, but the meeting schedule was set long before the Tour and PIF reached the framework agreement. The Tour, the European Tour and PIF are all expected to work consistently to try to reach a definitive agreement. They will also have to satisfy any concerns from the Justice Department and Congress. The Tour says Monahan is expected to return to work eventually.