PEBBLE BEACH, Calif. — The PGA Tour is getting a $3 billion investment from Strategic Sports Group in a deal announced Wednesday that would give players access to more than $1.5 billion as equity owners in the new PGA Tour Enterprises.
The launch of PGA Tour Enterprises, with SSG as a minority partner, comes eight months after the PGA Tour signed a framework agreement with the Saudi backers of LIV Golf for a commercial venture, which ultimately led to private equity groups wanting to join.
The Public Investment Fund of Saudi Arabia is not part of the deal yet, though the tour said negotiations with the PIF are ongoing for it to also become a minority investor.
“The coolest thing about it is the players are now owners,” said Jordan Spieth, one of six players on the PGA Tour board. “So not only do they benefit with the tour, they now are equity owners so they want to push it themselves, they want to make the product better themselves. Not that they didn’t before, but you directly benefit from owning a piece.”
How much of a piece remained unclear. PGA Tour Commissioner Jay Monahan held a conference call with players from all its main tours (including the PGA Tour Champions and Korn Ferry Tour) on Wednesday morning that included Tiger Woods, whom the tour appointed to the board last summer at the players’ request.
“As the tour grows, we grow,” Woods told players, according to Golf.com, which obtained access to the call. “So the more we invest into the tour, the more we get the benefits of it, which has never been — it’s never happened in sports history. So we’re the first. Exciting for me to be able to be part of that.”
Also uncertain is where this leaves the PIF.
The tour said its deal with SSG allows for a co-investment from the PIF, subject to regulatory approval. A Senate subcommittee wrote a letter earlier this week to Yasir Al-Rumayyan, governor of the PIF, that it is proceeding with its inquiry into framework agreement with the PGA Tour that was announced June 6.
“At this point if the PIF were interested in coming in on terms that our members like and/or the economic terms are at or not beyond SSG’s and they feel it would be a good idea, I think that’s where the discussions will start,” Spieth said. “I understand it could take some time to even come to those kind of terms, and then beyond that the Department of Justice and a regulatory review would be intact.”
LIV Golf starts its third season this week in Mexico and is likely to be around through all of next year depending on the timing of any investment by the PIF in the PGA Tour. How the fractured landscape of golf gets repaired remains as cloudy as how specifically equity ownership is distributed.
The PGA Tour plans several player meetings over the next month to work through details.
“By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour,” Monahan, who will be CEO of PGA Tour Enterprises, said.