PGA Tour and LIV Golf Agree to Merger

That new companies come so fast that it doesn’t even have a name yet and is referred to in the agreement documents simply as “NewCo.” It will be controlled by the PGA Tour but significantly financed by the Saudi government Public Investment Fund. The governor of the fund, Yasir al-Rumayyan, will become chairman of the new company.

The deal, which comes as Saudi Arabia increasingly looks to assert itself on the world stage as something other than one of the world’s biggest oil producers, has implications beyond sport. Saudi money would give the new organization more influence, but it comes with association with the kingdom’s troubling human rights record, its treatment of women and allegations that it was responsible for the 2018 killing of Jamal Khashoggi, a prominent critic.

The agreement does not directly spell a Saudi takeover of professional golf, but places the country’s top officials with considerable influence over the game. It also represents increasing Saudi ambition in the sport, moving beyond corporate sponsorship of Formula 1 racing and ownership of the British football team to a place where it can exert influence at the highest reaches of the global game.

“Everyone was in shock,” said Paul Azinger, 1993 PGA Championship winner and leading golf analyst for NBC Sports. “The future of golf is forever different.”

Since LIV started play last year, LIV has used some of the richest contracts and prize money in sports history to entice players away from the PGA Tour. Until Tuesday morning, the PGA Tour had been openly uncompromising: LIV was both a threat to the game and a glamorous way for Saudi Arabia to restore its reputation. PGA Tour commissioner Jay Monahan even avoided mentioning LIV’s name in public.

But a series of spring meetings in London, Venice and San Francisco resulted in a framework agreement that shocked the golf industry for its timing and scope. Monahan, who defended the decision as a sound business choice and said he had accepted he would be accused of hypocrisy, met PGA Tour players in Toronto on Tuesday in what he called an “intense” and “definitely heated” exchange. .

The deal, however, proved correct with predictions that there would eventually be an uneasy repair of the sport’s rifts. The PGA Tour board, which includes players such as Patrick Cantlay and Rory McIlroy, still has to approve the deal, a process that could go awry.

Just a year ago LIV Golf held its inaugural tournament this week, prompting the PGA Tour to suspend players competing in it. But at the end of the year, even though the circuit was locked in an antitrust battle with the PGA Tour and its stars faced an uncertain future in marquee sports competition, LIV had some of golf’s biggest names on its payroll. The cast includes major tournament champions Brooks Koepka, Phil Mickelson and Cameron Smith.

The cast is familiar, but the 54-hole LIV event – ​​the name derived from the Roman numeral for the number – is thunderous, with music blaring and golfers in shorts not facing the specter of being unceremoniously cut off halfway. The PGA Tour, meanwhile, is retaining its 72-hole event, where lower performers don’t compete until the weekend, as a rigorous athletics test following the game’s ancient traditions.

The less starchy LIV concept attracted a lot of headlines, and the league gained even more attention because of its relationship with former President Donald J. Trump, who hosted the LIV tournament and emerged as one of its most enthusiastic boosters. The league, however, is still largely reliant on large fortune funds who have been warned that rebel golf circuits are not a surefire financial boon. It stumbled on a television deal with the CW Network, and major corporate sponsorships were scarce.

The league is having some athletic success, even as its players run the risk of being kicked out of golf’s major tournaments, which are run by an organization close to, but distinct from, the PGA Tour.

Last month, Koepka won the PGA Championship organized by the PGA of America. Koepka, Mickelson and Patrick Reed were among LIV players who fared very well in the Masters Tournament, administered by the Augusta National Golf Club, in early April.

However, in the weeks following the Masters, after a series of joint bids and months of guts, the PGA Tour and Saudi executives got together in secret to see if there was a way to some kind of coexistence, in part, Monahan suggested, because he did. don’t think it’s “right or sustainable to have this tension in our sport.” The result is a deal that gives the tour an edge but poised to make Saudi Arabia a permanent influence over golf star ratings.

Monahan, the tour commissioner, will become chief executive of the new company, which will include an executive committee filled with tour loyalists. But al-Rumayyan’s presence, as well as the promise that wealth funds could play a significant role in how the company is ultimately funded, means that Saudi Arabia can do little to shape the future of the sport.

In a memorandum to players on Tuesday, Monahan insisted that his “history, legacy and tour’s pro-competitive model not only remain intact, but are indispensible for the future.”

That is not a consensus view. Mackenzie Hughes, a PGA Tour player, scathingly noted on Twitter that “there’s nothing like finding out via Twitter that we’re joining a tour we said we’d never do.” And Terry Strada, chairman of 9/11 Families United, which has attacked the Saudis’ foray into golf due to misgivings about the kingdom after the 2001 terrorist attacks, Monahan said and tours have “become overpaid Saudi shills, taking billions of dollars to clean up the Saudi reputation.” .”

The tour and wealth fund both had incentives to make deals, as well as the prospect of ending a chaotic chapter marked by accusations of betrayal and greed.

LIV has faced setbacks in civil litigation against the PGA Tour that threatened to take al-Rumayyan into sworn testimony and force the trust fund to turn over documents that could be made public. The tour is under scrutiny from Justice Department antitrust investigators, who have been examining in recent months whether the tour’s tactics against LIV have hurt golf’s labor market.

Litigation between the tour and LIV will end under the terms of the agreement announced Tuesday. The fate of the antitrust probe is less clear – experts say the new arrangement won’t automatically protect the tour from potential legal trouble – but LIV’s position as its main cheerleader is evaporating.

For this year, the world’s professional golfers are unlikely to see a seismic shift in their schedule or format of play, with the LIV and PGA Tour expected to hold competitions as planned. However, there could be much more important changes at a later date, especially as the new PGA Tour-controlled company will determine whether and how LIV’s team-oriented format can be blended with the tour’s more familiar offerings.

LIV players are expected to have a pathway to apply for reinstatement to the PGA Tour or DP World Tour, circuits where some have withdrawn when faced with fines and suspensions, but they could face residual penalties for dropping out of first place. Through a spokesman, Greg Norman, a two-time major tournament champion who was a former LIV commissioner, declined to be interviewed Tuesday.

Whatever LIV’s brand or style, Tuesday’s announcement is a singular milestone in Saudi’s quest to become a giant in global sports. With the deal, the empire can move, at least in golf, from a high-heeled bully to a seat of power at the table of power.

Saudi officials have repeatedly denied that political or public relations motives underlie their desire to pursue sports investing. Instead, they have framed the investments necessary to shore up the resource-rich kingdom’s finances and to elevate its standing on the world stage.

Despite its golf footprint, the wealth fund previously bought Newcastle United, a powerful English football team, and companies with close ties to the fund have been eyeing investments in cricket, tennis and e-sports. And Saudi Arabia has been trying to host major sporting events, ranging from boxing matches to its pending bid to host the 2030 World Cup.

But when Saudi Arabia got into golf last year, it was almost unthinkable that al-Rumayyan would so quickly become an official ally of Monahan and the sport’s other power broker.

“Anyone who thinks about it logically will see that something had to happen,” PGA Tour player Adam Hadwin said Tuesday. It was inconceivable, he suggested, that the world’s best players would only be competing against each other in the four major tournaments, but the truce “happened so quickly and in this surprising way.”

For most of the last year, LIV players have deflected questions about Saudi Arabia’s history to human rights and other matters that helped make the kingdom’s foray into golf an international flash point. They are, it is often said, just golfers and entertainers.

Until Tuesday, Monahan was trying to use Saudi Arabia’s stain to undermine the new league and its golfers.

“I would ask any player who has left, or any player who would consider leaving: Have you ever apologized for being a member of the PGA Tour?” he said last year.

On Tuesday, as Monahan said golf faction leaders had “realized that we are better off together than fighting or going our separate ways,” his tour players faced questions about their lucrative relationship with Riyadh.

“I’ve dedicated my whole life to being at the highest level of golf,” said Hadwin, the touring player. “I will not stop playing golf because the entities I play with have joined the Saudi government.”

Reporting contributed by Andrew Das, Kevin Drapers, Lauren Hirsch, Eric Lipton, Victor Mather, Ahmad Al-Omran And Bill Pennington.