The Future of LIV Golf in the Hands of the PGA
It’s been three weeks since the reports first surfaced about the merger between LIV Golf and the PGA Tour. Now that we’ve seen the posted agreement, as reported by The Athletic on Monday, it looks less like a merger and more like a PGA takeover.
The deal between the two embattled professional golf organizations was signed on May 30 by PGA Tour commissioner Jay Monahan, Saudi Arabian Public Investment Fund (PIF) Governor Yasir al-Rumayyan, and DP World Tour CEO Keith Pelley. The DP World Tour is legally known as the PGA European Tour.
The agreement took six weeks of negotiations to hammer out, and it does accomplish the one thing all parties wanted – the end of the legal battle, as well as the end of the war of words that was being fought through the media.
It also leaves the future of LIV Gold in doubt, as the PGA Tour will have the majority on the new board of what is being called NewCo until a new name is chosen. Although it is entirely possible, and even likely, that the name will remain the PGA.
The PIF, which funds LIV Golf, is laid out as a “premier corporate sponsor” of the PGA Tour and DP World Tour, and it will host an international event in which it is the title sponsor. But beyond that, the PIF is not a part of either the PGA Tour or DP World Tour.
It was also noted by the report in The Athletic that the six-page agreement makes no mention of the reported $2 billion-3 billion initial investment by the PIF. According to the agreement, the initial investment is still being negotiated, and will be subject to the PGA Tour’s evaluation of its commercial interests, owned properties, and value of current and future media rights.
The investment in “NewCo” is solely coming from LIV. None of the upfront cash will be supplied by the PGA.
The United States Government is Investigating the Agreement
Less than a week after the agreement was announced in the press, the U.S. Senate Permanent Subcommittee on Investigations launched a probe into the merger. Senator Richard Blumenthal (D-CT), the chairman of PSI, formally requested “documents and information” related to the agreement.
The request stated that the agreement between the two parties “raises concerns about the Saudi government’s role in influencing this effort and the risks posed by a foreign government entity assuming control over a cherished American institution.”
We now know, based on the agreement, that the PGA will remain in control. The four-person board will include Monahan, al-Rumayyan, and two other PGA Tour board members.
Senator Blumenthal has invited Monahan, al-Rumayyan, and LIV CEO Greg Norman to testify at a July 11 hearing on the planned agreement.
The PGA has accepted the invitation from Blumenthal, with a spokesperson saying that they “look forward to appearing before the Senate Subcommittee to answer their questions regarding the framework agreement we believe keeps the PGA Tour as the leader of professional golf’s future and benefits our players, our fans, and our sport.”
Monahan went on a medical leave of absence on June 13, and the PGA didn’t say specifically that he would be the one to testify in July.
LIV Players Welcomed Back to the PGA, With a Price
The most important part of the agreement for both players and fans is the language that states that all sides “will work cooperatively and in good faith to establish a fair and objective process for any players who desire to reapply for the membership with the PGA Tour and DP World Tour.”
Those applications for reinstatement can begin as soon as the 2023 season is over. There is also expected to be some kind of penalty levied against players who left the PGA and now want to return. The details of that potential penalty have yet to be determined. But many in the PGA are pushing for fines and possible suspensions.