By Doug Ferguson, The Associated Press on January 31, 2024.
PEBBLE BEACH, Calif. (AP) – The PGA Tour is getting a $3 billion investment from Strategic Sports Group in a deal that would give players access to more than $1.5 billion as equity owners in the new PGA Tour Enterprises.
The launching 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, and ultimately led to private equity groups wanting to join.
The Associated Press obtained a copy of the announcement expected to be released Wednesday morning. PGA Tour Commissioner Jay Monahan was holding a conference call with players about the deal that was finalized Tuesday night.
The Washington Post first reported the deal with SSG.
The tour still is negotiating with the Public Investment Fund of Saudi Arabia, which was not part of the deal. The tour said its partnership with SSG allows for a co-investment from PIF, subject to regulatory approval.
“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 in the formal announcement.
He said a partnership with SSG – a group comprised of American owners and executives of pro sports franchises – will “enhance our organization’s ability to make the sport more rewarding for players, tournaments, fans and partners.”
The unique equity program in golf would give some 200 players access to initial grants. Starting next year, PGA Tour Enterprises would make recurring grants for future players.
While specific details of the equity ownership program were not announced, the initial grants would be based on career accomplishments, recent achievements and PGA Tour status. The grants would vest over time.
SSG is led by Fenway Sports Group and includes owners Marc Attanasio (Milwaukee Brewers); Arthur Blank (Atlanta Falcons); Steven Cohen (New York Mets); Wyc Grousbeck (Boston Celtics); Tom Werner and John Henry (Boston Red Sox); Marc Lasry (Milwaukee Bucks). Others in the group include Alec Scheiner, former Cleveland Browns president and co-founder of Otro Capital.
“Our enthusiasm for this new venture stems from a very deep respect for this remarkable game and a firm belief in the expansive growth potential of the PGA Tour,” said Henry, the principal owner of Fenway Sports and manager of SSG.
SSG is investing an initial $1.5 billion into PGA Tour Enterprises and will concentrate on maximizing revenue for the benefit of the players and on finding opportunities to enhance golf across the world. Another $1.5 billion would go toward PGA Tour business.
The deal was unanimously approved by the PGA Tour board, which includes six players – Tiger Woods, Patrick Cantlay, Adam Scott, Jordan Spieth, Webb Simpson and Peter Malnati.
“It was incredibly important for us to create opportunities for the players of today and in the future to be more invested in their organization, both financially and strategically,” the player directors said in a joint statement. “This not only further strengthens the tour from a business perspective, but it also encourages the players to be fully invested in continuing to deliver – and further enhance – the best in golf to our fans.
“We are looking forward to this next chapter and an even brighter future.”
The tour said it was making progress in its negotiations with the Saudi national wealth fund on future investments and an ultimate agreement. Under the original framework agreement, Yasir Al-Rumayyan, the PIF governor, was to be chairman of PGA Tour Enterprises. It was not clear how the partnership with SSG affects that.
The tour said SSG has agreed to any investment by PIF, subject to the necessary review and approval.
A congressional committee led by Sen. Richard Blumenthal, D-Conn., on Monday sent a letter to Al-Rumayyan asking that he cooperate in allowing the committee to subpoena four U.S. consulting firms working for PIF.
The European tour was part of the framework agreement on June 6, and it has a strategic alliance with the PGA Tour. The tour said only it is discussing how they can work together for a mutual benefit.
Key to the original deal was dismissing the lawsuits involving LIV Golf. Since the rival league was launched in June 2022, LIV has lured several prominent players and major champions such as Dustin Johnson, Brooks Koepka, Phil Mickelson and Bryson DeChambeau.
As the tour’s negotiations with PIF neared its original Dec. 31 deadline, LIV signed Masters champion Jon Rahm in a deal reported to be in the neighborhood of $500 million. It also signed Tyrrell Hatton, currently No. 16 in the world, for a third season that starts Friday in Mexico.
AP golf: https://apnews.com/hub/golf