Negotiation Deadline Extended Between PGA Tour, LIV Golf's Backers

The original deadline for a peace agreement in golf was Dec. 31; the PGA Tour said "meaningful progress" has been made in negotiations.

PGA Tour commissioner Jay Monahan on Sunday sent a memo to players in which he said its negotiations with the DP World Tour and the Public Investment Fund of Saudi Arabia would continue into the new year based on the progress made to date, categorizing the talks as “active and productive."

The PGA Tour put a six-paragraph story on its website to explain the PIF extension as well as to say that “we have made meaningful progress" in negotiations with Strategic Sports Group (SSG), a private equity combination of business leaders and the Fenway Sports Group that would provide considerable funding to the Tour’s new "for-profit" entity.

The report said that the Tour and SSG are "working toward finalization of terms and drafting necessary documents."

A Dec. 31 deadline loomed between the parties to reach an agreement to combine commercial operations under a new for-profit entity being that will be called PGA Tour Enterprises. The PIF is the primary financial backer of the LIV Golf League.

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The memo was made public approximately six hours prior to the end of the year.

The memo again restated the Tour’s goal which is to bring SSG, PIF and the DP World Tour on board as minority investors in 2024. "These partnerships will allow us to unify, innovate and invest in the game for the benefit of the players, fans and sponsors."

Given the complexity of the negotiations and various reports that suggested a deal was not imminent, this does not come as a surprise. Tiger Woods had said as recently as two weeks ago that it remained his hope as a member of the PGA Tour Policy Board that that sides would work toward what was put forth in a June 6 announcement on a "framework agreement."

Negotiations continue between PGA Tour commissioner Jay Monahan and Saudi Arabia Public Investment Fund governor Yasir Al-Rumayyan.

IMAGO / ZUMA Wire

But various factors have complicated the negotiations, including U.S. government questions, the PGA Tour’s efforts to bring aboard additional outside funding—which some viewed as a way to push aside the PIF—as well as LIV Golf’s recent signing of Jon Rahm.

The agreement saw all litigation between the parties dropped immediately and without the ability to resume those legal proceedings.

The six-page "framework agreement" document also spelled out some basics, which continue to be debated in public.

Among them was the fact that LIV Golf’s future would be determined by the PGA Tour, a fact that has drawn considerable ire due to the heavy investment expected by the PIF.

Other aspects that are part of the agreement:

• It describes the composition of the board of the new for-profit venture now being referred to as PGA Tour Enterprises but states that there will be the creation of a "communications committee" that potentially could have influence.
• PIF has the right of first refusal on capital raised by PGA Tour Enterprises and will be “a premier corporate sponsor” of the PGA Tour, DP World Tour and other international tours, and that those tours will “work together collaboratively to identify a high profile event for which PIF or its designee(s) will make a financial investment to serve as title sponsor.” Since this was announced, the PGA Tour has courted several Private Equity firms, including the latest—Strategic Sports Group—which it entered into an exclusive negotiating agreement with earlier this month.
• The agreement outlines no initial investment amount from the PIF. Part of the process of the agreement is to get valuations for the PGA Tour, DP World Tour and LIV Golf, including each entity's assets. The PGA Tour is not putting cash into the new company.
• Although LIV Golf insiders have pushed back on the idea, the agreement states that the league that launched in June of last year and is being run by Greg Norman as commissioner and CEO of LIV Golf Investments will see its future determined by the PGA Tour board of directors that will see the PGA Tour hold a majority. Yasir Al-Rumayyan, chairman of the PIF, would be chairman of that board, with Monahan as CEO. Jimmy Dunne and Ed Herlihy, members of the PGA Tour policy board, will also be members of this new board.
• The agreement says that an "empirical data-driven evaluation" was to be conducted of LIV Golf to determine its future, and the board, overseen by Monahan, "will determine the ongoing plan and strategy."
• Elsewhere, the agreement states that the board "will make a good faith assessment of the benefits of team golf." LIV’s business model rests on its 12 four-man teams being sold as franchises, with those teams charged with selling sponsorships.

Since the agreement, there has been virtually no indication of how a deal would be structured or appear. And it’s possible that some aspects of what was spelled out in June could be altered considerably. That’s part of the negotiations. What was not stressed enough was how the "framework agreement" was simply an agreement to work toward a more formal and binding agreement.

Woods made it clear earlier this month at the Hero World Challenge that he wants to protect the integrity of our Tour and what it stands for." As a new member of the PGA Tour Policy Board, Woods has been in keeping with the idea that the PGA Tour Inc.—the non-profit organization that has existed for some 60 years—would remain intact. That means the PGA Tour Enterprises for-profit entity would be another, separate, venture.

How would it work?

That remains a mystery and likely part of the negotiations. As it stands now, both the PGA Tour and LIV Golf League will operate with separate schedules in 2024, which means some of LIV’s marquee players such as Rahm, Brooks Koepka and Cam Smith—three of the last five major winners—along with Bryson DeChambeau and Dustin Johnson, would only be seen competing against their former PGA Tour colleagues at the four major championships.

The PGA Tour’s 2024 season kicks off next week at the Sentry in Hawaii while LIV’s first event is Feb. 2-4 at Mayakoba.

What is also to be determined is if now an agreement by the spring will allow for enough time to work out details to launch PGA Tour Enterprises in 2025.