PGA Tour//
On Wednesday came the news that the PGA Tour and the newly established Strategic Sports Group have agreed on an agreement that could affect the future of golf. This can be the ripple effect.
Rory McIlroy (TV) and Viktor Hovland will both become co-owners of a new company on the PGA Tour in the near future. Here from last year’s FedExCup playoffs. Photo: Getty/Stacy Revere
This week news broke that the PGA Tour, headed by Jay Monahan, has agreed with the consortium Strategic Sports Group (SSG) on an agreement in which SSG invests approximately three billion dollars (approximately NOK 31.5 billion) on the PGA Tour. The investment will go into the new company PGA Tour Enterprises, which, unlike the old structure, will be a commercial player and not a non-profit organization.
The PGA Tour will continue to exist as the governing body behind the tournaments and the nonprofit charitable arm of the organization. PGA Tour Enterprises’ focus will be to manage the values the tour sits on, mainly sponsorship agreements, TV contracts and the tournaments.
Strategic Sports Group consists of several American billionaires who already own or part-own major professional sports teams. The group is led by Fenway Sports Group, which, among other things, owns the Liverpool football club and the Boston Red Sox baseball team.
PGA commissioner Jay Monahan (tv) and head of Fenway Sports Group John Henry during the contract signing. Photo: Getty/Chris Condon
In practice, the investment will mean that the PGA Tour is financially safer than they have been for a long time, as well as bringing in a large American bolk on the owner’s side. The latter may be important in the ongoing negotiations with the Saudi Arabian oil fund (PIF).
PGA Tour Enterprises is valued at $12 billion (approximately NOK 125 billion).
Hovland & co become part owners
The biggest change is that the members, i.e. the players, will become part owners in the new company. In the past, the PGA Tour has been a “player-run and player-owned” organisation, but then in the non-profit organisation. Now Viktor Hovland and the other players on the tour get shares in the new company, which in theory can secure income over time – also after the end of their golf career.
The sums are not exactly small either. Of the three billion dollars, approximately 930 million of them (approximately NOK 9.7 billion) are dividends for the approximately 200 players who are on the PGA Tour today.
The majority of this sum will go to the 30 biggest stars on the tour. Players such as Viktor Hovland, Rory McIlroy and Tiger Woods can thus envision a significantly larger stake than players who just joined via Q-School just before Christmas.
The biggest star of them all, Tiger Woods, expressed his delight at the new deal in a meeting between the players, Jay Monahan and representatives from SSG.
– When the PGA Tour grows, golf grows. So the more we invest in the tour, the more benefits we get from it. This (an agreement with players on the owner side journ.amn.) has never happened before in sports history. So we are the first. It is exciting for me to be able to be a part of it, says Woods Golf.com.
Tiger Woods is pleased with the news of the new investment in the PGA Tour. Photo: Getty/Tracy Wilcox
The PIF negotiations have become more difficult
At the same time as the news of the external investment in the newly established company PGA Tour Enterprises came, Jay Monahan and the PGA Tour are in negotiations with Yasir Al-Rumayyan and the Saudi Arabian oil fund.
In a press release stated the tour that the announcement on Wednesday “opens up for further investments from the Public Investment Fund (PIF) in the future, subject to all necessary regulatory approvals.”
According to Golf Digest Strategic Sports Group has entered into the agreement with the PGA Tour in the belief that PIF will become part of PGA Tour Enterprises in the long term. According to the framework agreement that was announced in June last year, Al-Rumayyan will be chairman of the board of the new company, but he is not mentioned in Wednesday’s news. He also did not attend the meeting with the players on Tuesday, the report says Golf Digest.
The website also says that the negotiations have gotten a shot in the arm. People from the Saudi side tell Golf Digest that the PIF was unhappy that the PGA Tour was seeking private equity alongside their potential investment, hence signing Jon Rahm.
It is speculated that this revived the civil war, despite the fact that the hatchet was temporarily buried in June last year.
Yasir Al-Rumayyan, the head of the Saudi Arabian Oil Fund. Photo: Getty/Ian MacNicol
Must have stopped women’s amalgamation
Last November there was also talk of a potential agreement between the LPGA tour and the LET (Ladies European Tour). Then the LET players met during the end of the season in Spain to vote on a possible merger with the American tour. Shortly after the meeting, however, management said it would not be held some vote.
The players received no explanation.
According to a letter from LPGA Commissioner Mollie Marcoux Samaan, who Golfweek has gained insight and mentioned recentlyMarcoux Samaan confirmed that it was Golf Saudi that submitted a request for additional information on the proposed operating model for the tour following a possible merger.
– As a significant partner of the LET, Golf Saudi wanted to ensure that they fully understood the potential risks, implications and opportunities for the Aramco Saudi Ladies International and Aramco Team Series tournaments before finally committing to the events in 2024, writes the LPGA commissioner.
Golf Saudi and the state-owned oil and gas company Aramco is a significant contributor to the ladies’ European tour, as the main sponsor of five tournaments with one million dollars in prize money each, as well as five million dollars in the Aramco Saudi Ladies International tournament.
Now the talks about a potential merger have been put on hold indefinitely.