The PGA Tour has created a program that would give players equity ownership in a new commercial enterprise, provided it finalizes a deal with Saudi Arabia’s national wealth fund and five other private groups that want to invest.
Commissioner Jay Monahan laid out the proposal in a memo to players on Tuesday, which followed a board meeting where tour officials reviewed some of the proposal.
Monahan said the board reviewed the bids from private investors and would keep negotiating to select finalists. Still at the center of the deal is the Public Investment Firm of Saudi Arabia, the financial backer of rival league LIV Golf, which agreed to a for-profit commercial venture in June with the PGA Tour and the European tour. The framework agreement set a Dec. 31 deadline, though that can be extended.
Monahan said the equity program first was mentioned at a player meeting at the Travelers Championship, which was held weeks after the Saudi deal was announced.
He said in the memo the program “would align the interests of our members with the commercial business of the tour via direct equity ownership in PGA Tour Enterprises,” the name of the proposed for-profit company.
Under the framework agreement, Monahan would be the CEO of PGA Tour Enterprises, while PIF Governor Yasir Al-Rumayyan would be the chairman.
“At the point we secure outside investment, this would be a unique offering in professional sports, as no other league grants its players/members direct equity ownership in the league’s business,” Monahan said in the memo.
“We recognize — as do all of the prospective minority investors who are in dialogue with us — that the PGA Tour will be stronger with our players more closely aligned with the commercial success of our business.”
Tour continues "negotiations toward a definitive agreement with PIF" and "unsolicited interest from numerous outside potential investors," according to memo sent to players. pic.twitter.com/NPpIkzU6qf
— Rex Hoggard (@RexHoggardGC) November 14, 2023
Details have been slow to emerge over the last few months, raising questions whether a deal can be done by the end of the year.
Golfweek previously reported that five private groups are under consideration — Fenway Sports Group, Acorn Growth Companies, Liberty Strategic Capital, Eldridge Industries and Friends of Golf, a group that includes George Roberts and Henry Kravis.
Rory McIlroy, one of the six player-directors, had said last week that he hoped PIF could stay involved and the fractured world of golf could be more united. He expressed optimism Tuesday in Dubai that a deal could get done.
“I think if you were in the middle of it, you would see that there’s a path forward,” McIlroy said ahead of the DP World Tour Championship. “It’s just that no one on the outside has any details. Loose lips sink ships, so we are trying to keep it tight and within walls.”
Monahan said progress has been deliberate because of the complex nature of the agreement. Among topics is what kind of penalty players who defected to LIV Golf would face if they want to return to the PGA Tour.
The tour also filled out its board of directors with Joe Gorder, the executive chairman of Valero Energy Corp. He replaces former AT&T Chairman Randall Stephenson, who resigned in July after 12 years because he could not support the tour’s surprise commercial deal with PIF.
Valero has been title sponsor of the Texas Open since 2002.
The tour said the search committee considered 90 candidates. The unanimous approval of Gorder restores the board to 12 members, six of them players, including Tiger Woods. Also, Patrick Cantlay was reappointed to the board through 2026.
Ed Herlihy, the board chairman, described Gorder as a principled leader and pillar of the corporate community who is the “right candidate at the right time to help guide the PGA Tour through this period of transformation and beyond.”
Still to be determined is how that transformation plays out.
