Professional Golf Association signs $3 billion deal with investor group

The most popular golf tour in the world, the PGA (Professional Golf Association), announced the signing of a contract with a group of investors led by Fenway Sports Group who have agreed to invest $3 billion in a series of tournaments. Half of this amount is expected to be “distributed” to players in the form of shares in a certain enterprise, which will give them the right to participate in the division of profits in the future. The PGA’s actions are obviously an attempt to fend off its much better-resourced competitor, LIV Golf, which has the whole of Saudi Arabia behind it.

The world’s oldest and most respected golf tour, the PGA Tour. announced on concluding a contract with a group of investors who pledged to invest $3 billion in its development. The pool of investors is headed by Fenway Sports Group. Its most notable assets are one of the most popular clubs in the English Premier League (EPL), Liverpool, as well as the Major League Baseball (MLB) team, the Boston Red Sox. In addition to Fenway Sports Group, the consortium, called Strategic Sports Group (SSG), included almost a dozen other entrepreneurs involved in the sports sector. For the most part, they are associated with North American sports leagues.

A distinctive feature of the above agreement is that, according to its terms, players who remain with the PGA will receive some kind of bonus.

The point is that $1.5 billion, that is, half of the promised investment, will in some way be converted into shares of ownership of the tour, which will be given to the players. “The coolest thing about this is that the golfers will now be co-owners,” Jordan Spieth, one of the six player representatives on the PGA board, told the AP. “So now not only will they receive prize money, but they will also become co-owners of the enterprise, which will force them to work hard, improve the product. Not to say they haven’t done this before, but now they will benefit directly.”

Exactly what benefit, who will receive it and when, how shares in the created enterprise will be distributed among the players is not specified. It is possible that the announced deal is nothing more than an attempt by the PGA to fight off the aggressive policy of the competing tour – LIV Golf, which is backed by the whole of Saudi Arabia.

The promised injection of funds will obviously help the PGA survive for some time, but LIV Golf has an undeniable argument on its side – a lot of money.

LIV Golf, owned by the Saudi Arabian public investment fund Public Investment Fund (PIF), which has assets exceeding $700 billion, entered into a confrontation with the PGA in 2022, starting to simply buy up the superstars of the traditional tour. The most recent and striking example is the agreement with Jon Rahm, reached last August. He signed a contract with LIV Golf for as much as $600 million. Moreover, Ram was far from the first top player who was lured by LIV Golf. For example, previously one of the most successful golfers in the world, Dustin Johnson, received $150 million for participating in LIV Golf tournaments.

Under pressure from a competitor, the PGA actually capitulated last summer. Then was announced on a deal that would merge the two competing tours into one, PGA Tour Enterprises. The story was presented as if the PGA was taking over LIV Golf. In reality, however, and this became clear during hearings held in the US Senate, it was the Saudis who took control of the PGA. It was reported that in the new venture, PGA representatives will have more seats on the board of directors. But in the Senate it turned out that not only would the post of president go to PIF manager Yasser Al-Rumayyan, but he would also have financial control. “The path you have chosen stinks,” said Senator Richard Blumenthal at the time. “It is capitulation. It’s all for the money. As I understand from the documents, the Saudis will have financial control over the organization. This puts the levers of control in their hands.”

Due to opposition to the deal from the American authorities, the takeover of the PGA by LIV Golf was never completed.

But at the same time, the aggressive tactics of the Saudis have not disappeared anywhere, so the deal with Fenway Sports Group gives the PGA some reprieve, but it is unlikely to last long. As association board member Jimmy Dunn said at the aforementioned Senate hearings, “In five years they’ll get us.” “There are only a couple hundred top golfers in the world,” noted Mr. Dunn, “and they (PIF.— “Kommersant”) there are no money limits, no time limits, the whole point of their existence is to take our players. We don’t complain, we just tell you how things are.”

Alexander Petrov