The PGA Tour is continuing to work on an investment agreement with Saudi Arabia’s Public Investment Fund, despite interest from other groups.
Sports Illustrated obtained a letter Tuesday from commissioner Jay Monahan to the tour’s players, which said an agreement with the Saudi fund is the focus of the PGA Tour.
Fenway Sports Group, owner of the Boston Red Sox and other teams, reportedly recently made overtures about a significant investment.
The PGA Tour announced on June 6 plans for a financial agreement with the DP World Tour and the PIF, which funds the LIV Golf League.
“We continue to remain focused on our negotiations toward a Definitive Agreement with PIF and the DP World Tour as our priority. Progress has been deliberate given the complex nature of the potential agreement, and we will keep you apprised of the progress,” the memo said, per Sports Illustrated.
Monahan acknowledged the interest from other parties.
“Additionally, as you know, the Framework Agreement with PIF and the DP World Tour generated unsolicited — although not surprising — interest from numerous outside potential investors. The opportunity to potentially participate in the transformative growth of the PGA Tour for the first time brought forth dozens of inbound prospects, which were all initially vetted by the Tour’s investment bank, Allen & Company.
“Many of those prospects moved forward to a diligence review — with Tour Management and Allen & Company working together with the potential minority investors’ representatives — and we then received significant, formal proposals that demonstrate the power of the PGA Tour brand, its player and our commercial opportunity.”
Later Tuesday, the tour released its own update of the situation on its website, which added that the tour “has designed a potential program” to award players with equity in PGA Tour Enterprises, the for-profit organization set to be formed in a definitive agreement.
“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. “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 the business.”
PGA Tour policy board member Jimmy Dunne, an architect of the framework agreement with PIF, had floated the equity idea this summer as a way to reward players who did not defect from the tour for a guaranteed payday from LIV Golf.
The PGA Tour, the DP World Tour and the PIF have set a Dec. 31 deadline to finalize an agreement, although they could agree to an extension.
Rory McIlroy, a member of the tour’s Player Advisory Council, met with the media on Tuesday at the DP World Tour Championship in Dubai. He said efforts continue toward the two tours teaming with the PIF even though progress isn’t obvious.
“I think if you were in the middle of it, you would see that there’s a path forward,” he said. “It’s just that no one on the outside has any details, right. Loose lips sink ships, so we are trying to keep it tight and within walls. I’m sure when there’s news to tell, it will be told.”
The PGA Tour also appointed Joe Gorder, the executive chairman of Valero Energy Corporation, to the vacant independent director seat on the board. He replaces Randall Stephenson, who resigned his seat in July due to qualms over negotiating with the Saudis.
–Field Level Media
