- A U.S. consortium, Strategic Sports Group, will invest up to $3 billion into the PGA Tour.
- Talks about investment from the Saudi Public Investment Fund continue.
- Under the new agreement, players will have the opportunity to gain equity in the tour.
A U.S. consortium has agreed to invest up to $3 billion into the PGA Tour, the professional golf organization announced Wednesday.
Under the terms of the deal, the investor, Strategic Sports Group, will become a minority owner in PGA Tour Enterprises, the for-profit entity of the PGA Tour. The group will make an initial investment of $1.5 billion in the PGA Tour.
The second $1.5 billion of the investment is guaranteed, according to a source familiar with the talks. The PGA Tour will get it once negotiations with the Saudi Public Investment Fund conclude. There is no deadline for those talks to end.
The agreement comes as the organization tries to plot out its future in the face of competition from the upstart LIV Golf and a proposed merger with the Saudi-funded league. The tour confirmed progress on its ongoing negotiations with the PIF on a potential future investment and its discussions with the DP World Tour.
“Today marks an important moment for the PGA Tour and fans of golf across the world,” PGA Tour Commissioner Jay Monahan said.
The deal received unanimous support from the PGA Tour player directors.
As part of the new agreement with Strategic Sports Group, the tour said nearly 200 players will have the opportunity to receive equity participation in the tour. These would be awarded in the form of grants, which vest over time — and would be based on their career accomplishments and future participation and services with the tour.
“By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour,” Monahan said.
Strategic Sports Group is led by Fenway Sports Group’s John Henry. It includes a variety of investors, private equity names and sports owners, including Atlanta Falcons owner Arthur Blank, New York Mets owner Steve Cohen and Boston Celtics owner Wyc Grousbeck.
“Our enthusiasm for this new venture stems from a very deep respect for this remarkable game and a firm belief in the expansive growth potential of the PGA Tour,” said Henry, principal owner of Fenway Sports Group and manager of the Strategic Sports Group.
Monahan and Henry held a players-only call to share the news with members Wednesday morning.
The investment comes at a pivotal time for professional golf. The tumultuous rivalry between the PGA Tour and Saudi PIF-backed LIV Golf has divided players, and a merger could dramatically change the sport.
The PGA Tour-LIV deal was first announced in June, when Monahan and Saudi Public Investment Fund Governor Yasir Al-Rumayyan announced the news on CNBC. It came as a surprise to many, as the two competing leagues were engaged in a bitter legal feud at the time.
Critics claimed that the deal was a means for Saudi Arabia to gain influence in the U.S. through sports investments. Saudi Crown Prince Mohammed bin Salman controls the PIF.
LIV Golf, launched in 2022, formed as a rival league to the tour. By offering lucrative prize money and signing bonuses, the Saudi-owned tour was able to lure away top players like Phil Mickelson, Dustin Johnson, Brooks Koepka and Jon Rahm.
The PGA Tour-LIV Golf deadline was originally set for Dec. 31. Monahan previously told players the organizations were extending the deadline based on the progress they had made to date. A formal decision on the combination is expected to take place ahead of the Masters Tournament in April.
The deal is subject to Justice Department and regulatory approval.
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Source: Business - cnbc.com
