New PGA Tour–LIV Golf Alliance Could Have Far-Reaching Business Impact on the Ryder Cup
The 42nd Ryder Cup is set for Rome this September, and, given the news of a new alliance among the PGA Tour, DP World Tour and LIV Golf, it may also be the last time the European Tour has any say in the event.
Instead, a new company, controlled by the PGA Tour and the Public Investment Fund of Saudi Arabia, will take a 30% position in the most popular event in professional golf.
When PGA Tour commissioner Jay Monahan and PIF governor Yasir Al-Rumayyan announced a partnership with the PIF on June 6, the world of golf stood still.
The immediate aftermath of the announcement is still very complicated, as neither the PGA Tour nor the PIF have provided anything close to concrete guidance on the deal.
What is clear is that the commercial assets of the PGA, DP/European and Asian Tours, along with LIV Golf, will be transferred into the new for-profit company.
Sitting on a CNBC set on a Tuesday morning with Al-Rumayyan, Monahan broadly described a plan for the new company that included a multibillion-dollar investment from the PIF.
“We will be investing in new events, new courses, new technology, new initiatives that are tied to growth of the game all over the world,” Monahan said.
When Monahan used the term “DP World Tour,” it seems clear that all assets not of only the DP World Tour, per se, but the parent The European Tour Group, which includes the Challenge, Legends and DP World tours would be included in the transfer.
The 30% stake of the European Tour Group in the Ryder Cup could also be considered an asset and transferred as well.
The Ryder Cup has evolved through the years. The first Ryder Cup was played in 1927 in Worcester, Mass., with teams from Great Britain and the United States.
In 1973, Ireland joined the Great Britain team, and then in 1979 continental Europe was added at the behest of Jack Nicklaus.
When the PGA Tour broke away from the PGA of America in 1969, part of that agreement was to split up the World Series of Golf and Ryder Cup ownership.
The Tour took the World Series of Golf, and the PGA of America kept the Ryder Cup.
Ryder Cup ownership is a simple 50-50 split between the PGA of America and a trifecta of the Ryder Cup Europe, the PGA of Great Britain and Ireland and the PGA of Europe.
The PGA GB&I and PGA Europe each own 20% of Europe’s 50% stake, with the European Tour Group owning the rest, for a total share of 30% of the Ryder Cup.
The PGA Tour’s only current interest in the biennial event is a 10 percent stake in the PGA of America’s Ryder Cup $440 million television contract, which expires in 2030.
Monahan has said at various points in the past week that the PGA Tour will have controlling interest in the new company board.
Does that mean the Europeans will have no control over the Ryder Cup, its most valuable asset?
“The PGA Tour will at all times hold the majority of the Board seats and be in control of this new entity, regardless of the size of PIF’s investment,” Monahan wrote in a June 9 letter. “The PIF will be a minority investor in the new commercial entity, while the PGA Tour will be the majority equity investor.”
European Tour Group CEO Keith Pelley told the European media in a June 6 press conference following the LIV alliance announcement, “We have every confidence that we will be on the board when the final board is being announced.”
While Pelley’s confidence may come to fruition and Pelley or other European Tour representatives may have a vote, the control of the Ryder Cup from a European perspective will firmly be under the thumb of the PGA Tour, via the new company.
“It’s the Ryder Cup. It’s been hugely successful being what it is, and I don’t see why they should change it too much,” Francesco Molinari said of potential PGA Tour involvement. “But if they do and if it loses its sort of spirit or nature it will be a shame, I think for the whole game, not just for the Ryder Cup, it would be a shame for golf.”
It’s important to note that none of this is written in stone, as the potential agreement is like a 2,500-piece jigsaw puzzle, and the only pieces currently identified are the four corners.
But a European Tour executive told me that the European Tour could benefit from transferring as many assets into the new company as possible to secure its largest possible ownership interest in that entity.
At the same time, the opportunity for the European Tour to selectively choose which assets to include may not exist, making the Ryder Cup a plum asset that the new company would very much want in its portfolio.
“I have no idea what it means to the Ryder Cup at this moment,” former European Ryder Cup Captain Padraig Harrington said. “I believe, wholeheartedly believe, that the board is operating in our best interests and will do the best deal they can, whatever that is, and we’ll find out the facts at a later date, and that would be considered normal in business.”
Harrington is like the rest of us, just waiting to see what comes next.