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The PGA Tour has agreed a private equity deal worth around $US3bn with a group of investors led by the Fenway Sports Group, which owns English premier league football club Liverpool.
As a result, golfers who have remained loyal to the tour and rejected advances from the rival LIV Golf circuit are set to receive $US1.5bn in immediate and future equity.
Members have been briefed on the deal, which has been in the pipeline since December last year. This coincides with the launch of PGA Tour Enterprises, a newly formed for profit company which has been initially valued at $12bn and will run parallel with the non-profit, tax-exempt tour.
PGA Tour commissioner Jay Monahan, who will serve as chief executive of the new profit seeking enterprise, said: “Today marks an important moment for the PGA Tour and fans of golf across the world.
“By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour.”
In a joint statement, PGA Tour player directors Patrick Cantlay, Peter Malnati, Adam Scott, Webb Simpson, Jordan Spieth and Tiger Woods, added: “We were proud to vote in unanimous support of this historic partnership.
“It was incredibly important for us to create opportunities for the players of today and in the future to be more invested in their organisation, both financially and strategically.”
Fenway front the Strategic Sports Group (SSG), a conglomerate of leading sports investors who are providing the cash injection.
Other members of SSG include Arthur Blank (owner of the Atlanta Falcons), Wyc Grousbeck (Boston Celtics), Marc Lasry (Milwaukee Bucks), Tom Ricketts (Chicago Cubs), Cohen Private Ventures (New York Mets) and HighPost Capital.
SSG will invest up to $US3bn into PGA Tour Enterprises with an initial input of half that amount. Players will receive equity in the new company based on playing achievements, tour status and future participation.
As yet there is no involvement from Saudi Arabia’s Public Investment Fund (PIF), although the PGA Tour confirmed talks are ongoing over future investment.
The PGA Tour, along with Europe’s DP World Tour, have been in talks with PIF – who fund LIV Golf – and a framework agreement announced in June last year has still to be ratified.
LIV’s season begins in Mexico this week with new signings Tyrrell Hatton and Adrian Meronk joining Masters champion Jon Rahm as debutants on the circuit.
The recruitment of this high profile trio of European stars has heaped yet more pressure on the golf establishment. In the past two years LIV have lured major winning talents including Brooks Koepka, Dustin Johnson, Bryson DeChambeau and Cameron Smith.
But the SSG deal brings a measure of security to the PGA Tour which is strategically aligned to the DP World Tour.
The PGA Tour says that strategic alliance remains a focus and discussions are continuing about a benefitial way forward.
The American circuit is committed to a string of US$20m ‘Signature Events’, introduced to keep pace with LIV’s lucrative calendar of 14 tournaments.
It remains unclear when or if golf will unite under an agreed schedule that would allow players to compete on both the LIV and PGA tours.
Rory McIlroy
Photo: PHOTOSPORT
Rory McIlroy, previously an arch critic of the Saudi funded circuit, said this week that he had “changed my tune” as he called for reconciliation.
Speaking before the $20m Pebble Beach pro-am in California, the world number two from Northern Ireland said: “I see where golf is and I see that having a diminished PGA Tour and having a diminished LIV Tour or anything else is bad for both parties.”
This story was first published on the BBC