Tour officials emphasized to the players that under the arrangement, the PGA Tour will remain responsible for its operations and will continue to have a controlling interest in its existing policy board and in the board of directors of the new for-profit joint venture that will oversee commercial activities on PGA Tour, LIV Golf and the Europe-based DP World Tour.
The players heard from Tyler Dennis, the tour’s senior vice president, and Ron Price, its chief operating officer, and were told the deal will ensure the tour will be financially viable for years to come. Jay Monahan, the PGA Tour commissioner who drew the ire of many golfers by keeping them in the dark about the deal, was not present, according to the person. He has been on leave since June 13 as he recovers from an unspecified medical condition.
While the Saudis are believed to be willing to pump billions into the operation, the players were told that under the agreement the PGA Tour can reject any investment and will have a say in how money is directed.
Two weeks after the PGA Tour agreed to drop lawsuits and cooperate with the Saudi Public Investment Fund, which owns and operates LIV Golf, players are still upset about the lack of information and transparency surrounding the deal – both before the deal was made and in the deal. days that followed.
The tour has found itself playing defense for the past two weeks with angry players, confused fans and lawmakers on Capitol Hill pushing legislation targeting the tour’s tax-exempt status. The parties dismissed their federal lawsuits against each other last week, but the deal is still likely to be months from completion. Even after the terms are sorted out, the deal will require approval from the PGA Tour’s 11-member policy board and will also likely have to pass muster with the Justice Department, which began investigating the PGA Tour last year over antitrust concerns.
But getting golfers to back the deal is a priority for tour officials, and they know the task will not be easy.
Tom Watson, Hall of Fame golfer, wrote a letter to Monahan and the tour’s policy board on Monday, criticizing the secrecy of the deal, saying “communications have been mishandled and the process by which the Tour agreed to a proposed partnership with the PIF was executed without due process.”
“The commissioner and the PGA Tour Board, on which five Tour players sit, will have to do a lot of firsthand explaining to comfortably coax acceptance with our membership of this partnership with the PIF,” he wrote. “… There are many unanswered questions to date which I hope will be addressed with the players by Tour management at this week’s … event. What does accepting this partnership mean for the Tour?”
Vague descriptions and lack of detail have spurred criticism and heightened skepticism, and the tour’s own communications confused public understanding. The initial press release said the three golf resorts would “merge commercial operations under common ownership.” The parties chose to break the news on CNBC, which reported the deal as a merger.
The PGA Tour later changed the language on its website, removing the word “merger” and tells USA Today it was an editorial decision. And tour officials have since said the groups are forming a new for-profit entity that they don’t feel constitutes a merger.
But the announcement error led to more confusion than clarity – for players, fans, sponsors and other stakeholders. In the meantime, the framework of the agreement had only been seen by a few people. When Monahan met with golfers hours after publicly announcing the deal on June 6, emotions in the room were raw, and he did not present a point-by-point explanation.
Tour officials have been sensitive to reports that it is ceding control to the PIF and the narrative that its new business partners would take over. The agreement makes clear that the tour will have a controlling voting stake in the new venture, regardless of PIF’s investment level, according to a person familiar with the deal.
The agreement also notes that the tour will retain its level of oversight of operations, including event management and competition rules, although Yasir Al-Rumayyan, the PIF governor, would be added to the tour’s policy board.
Critics have warned that Al-Rumayyan would be in control when the tour accepted Saudi money, regardless of his official title or position. In his letter, Watson noted that the tour appears to be in a “more desperate financial situation than has previously been disclosed.”
“Are funds depleted to the point where the Tour needs an unprecedented capital injection to remain solvent now or in the future? … My overarching questions remain. Is the PIF the only viable rescue from the Tour’s financial woes?” he wrote.
According to a person familiar with the terms, the deal gives the tour decision-making authority over golf-related operations, effectively giving Monahan oversight of LIV Golf and the future of team-based competition. The new company – simply called NewCo. in the deal — will house all existing and future golf-related commercial assets “under one roof,” according to the person familiar with the deal.
It will be run by an executive committee that will be chaired by Al-Rumayyan, but will also include Jimmy Dunne and Ed Herlihy, members of the tour’s policy board. The agreement notes that the tour “will at all times maintain a controlling voting interest” in the new venture, the person said.
Monahan will be the CEO of the new operation and, according to the agreement, will make recommendations that the board will act on.