Golf’s US-based PGA Tour and Europe-based DP World Tour have agreed to merge with the Saudi-backed LIV Golf series, their rival for the last 18 months, in a stunning move that should put an end to the current levels of bitter acrimony and in-fighting in the sport.
The three parties today (June 6) announced an agreement to combine the golf businesses and rights of the Saudi Public Investment Fund (PIF), including LIV, with those of the PGA Tour and the DP World Tour (formerly the European Tour).
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The shock collaboration will result in the creation of one single yet-to-be-named for-profit company.
The tie-up also means a “mutually agreed” end to all legal claims and lawsuits between the three organizations, of which there have been numerous over the last year and a half.
The trio has said the merger will result in the implementation of “a plan to grow these combined commercial businesses, drive greater fan engagement, and accelerate growth initiatives already underway.”
Through the terms of the deal, the PIF will initially be the sole investor in the merged commercial entity. The governor of the PIF, Yasir Al Rumayyan, will serve as chair, while the PGA Tour’s commissioner Jay Monahan will serve as the body’s chief executive.
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By GlobalDataGoing forward, the PIF will have the exclusive right to invest further in the new entity, and will also have first refusal on any other capital that could be invested. That fund will also become a premier sponsor of both the PGA and DP World Tours.
CNBC has reported that the PIF is ready to invest billions of dollars into the new entity, which in some quarters is likely to incur accusations that top-tier professional golf is simply being bought by Saudi Arabia.
The PGA Tour, however, will appoint a majority of the new board and will therefore hold a majority voting interest in the entity.
Initially, the new body's board will have an executive committee of Al Rumayyan, Monahan, PGA Tour policy board chair Ed Herlihy, and PGA Tour policy board member Jimmy Dunne. The full board will be disclosed at a later date, with “all three founding members” likely to have representation, notwithstanding the PGA Tour majority.
Tom Subak-Sharpe, associate analyst at GlobalData Sport, commented: “This historic announcement has shocked the sporting world and has put an end to the fierce legal battle that was taking place between the PGA Tour and LIV Golf.
“Commercially, the news of the merger will excite brands across the globe as they will be intrigued by the new commercial this merger will provide. It is highly likely that more eyes will now be on golf moving forward as the tie-up will provide the best possible competition for future events, especially the four major golf championships. With more eyes on the sport, viewership can be expected to see a sharp increase, which will subsequently drag to the negotiating table more brands that are seeking to become associated with the newly formed, yet-to-be-named company.
“GlobalData estimates the current combined sponsorship portfolio value of the PGA Tour, DP World Tour, and LIV Golf is a staggering $623 million annually. The newly formed company should drive a substantial increase in this figure over the next few years.
“There is no doubt that June 6, 2023, will be remembered as a historic day for golf.”
Despite the merger, all three tours will retain separate administrative oversight for their own tournaments and events, including sanctioning events, administration of rules, “as well as all other ‘inside the ropes’ responsibilities.”
This means that the teams' element to LIV Golf will continue, with a joint statement saying that over the next few months, all parties will work together to work out further logistical elements to the partnership. As such, the 2023 LIV calendar will take place as planned.
LIV had been paying vast sums of money to golfers on both incumbent tours over the last 18 months to abandon these traditional series’ and join LIV instead.
Heavyweights such as Brooks Koepka, Dustin Johnson, and Phil Mickelson have all joined, with guaranteed contracts reportedly exceeding $100 million in some cases.
Faced with this new rival, the PGA Tour and DP World Tour retaliated by banning players from competing in their events if they joined LIV and by claiming that LIV was compromising golf’s integrity.
Indeed, in recent months, the PGA Tour and LIV have sued each other, with subsequent public disputes regarding what evidence should be admissible.
There has also been serious public criticism of LIV as a concept, given its funding is from a state that has been accused of multiple and repeated human rights breaches in recent years.
Many human rights groups and charities have said that those players and officials who join the LIV payroll are engaged in sportswashing.
Now, however, despite all the previous rancor, a truce has been enacted.
Monahan said: “After two years of disruption and distraction, this is a historic day for the game we all know and love. This transformational partnership recognizes the immeasurable strength of the PGA Tour’s history, legacy, and pro-competitive model and combines with it the DP World Tour and LIV – including the team golf concept – to create an organization that will benefit golf’s players, commercial and charitable partners, and fans.”
He added that despite “lots of tension in our sport in recent years”, all three organizations are ready to “come together to unify the game of golf …
“I give Yasir great credit for coming to discussions with an open mind.”
Al-Rumayyan added: “There is no question that the LIV model has been positively transformative for golf. We believe there are opportunities for the game to evolve while also maintaining its storied history and tradition. This partnership represents the best opportunity to extend and increase the impact of golf for all.”
He said that the three organizations had first met to discuss the issue in London and that “we will be doing many things that will result in a better engagement from fans, players, broadcasters, and sponsors."
Keith Pelley, chief executive at the DP World Tour, commented: “Together we will be stronger than ever and well positioned to continue to bring the game to all corners of the globe. To partner in this new entity and influence the growth of the game for all our DP World Tour members is energizing and exciting.”
As part of the merger, the three bodies will work to establish a process for golfers who were initially forced to leave the PGA and DP World tours in order to join LIV and now want to re-apply for membership. This will take place at the end of the ongoing 2023 season.
In terms of the players, CNBC has cited a communication from Monahan to players as saying: “There is much work to do to get us from a framework agreement to a definitive agreement, but one thing is obvious: through this transformational agreement and with the PIF’s collaborative investment, the immeasurable strength of the PGA Tour’s history, legacy and pro-competitive model not only remains intact but is supercharged for the future.”
It is understood that, apart from a handful of key insiders, hardly anybody inside any of the three organizations was aware that a merger was at hand.
One of the individuals expected to be a key insider is LIV Golf’s commissioner and chief executive Greg Norman. There is no mention of Norman in the release, after speculation earlier this year that he would soon be removed from his key role within the organization.
Image: Eric Espada/Getty Images
