The PGA Tour and European Tour have agreed to work with Saudi backers of LIV Golf to decide how defectors to the rival league can return and what kind of punishment they will face, according to a framework agreement obtained by The Associated Press.
The agreement also said the for-profit company to be formed by the PGA Tour and the Saudis will be “the entity for professional golf” and that the tours will co-exist with LIV Golf.
The framework agreement, signed May 30, was among the documents requested by Sen. Richard Blumenthal, D-Conn., for a July 11 hearing in Washington. Blumenthal is chairman of the Senate Permanent Subcommittee on Investigations.
“Our goal is to uncover the facts about what went into the PGA Tour’s deal with the Saudi Public Investment Fund and what the Saudi takeover means for the future of this treasured American institution and our national interests,” Blumenthal said last week.
The PGA Tour has said it would participate, although it was not clear whether commissioner Jay Monahan would attend. He stepped down on June 13 – a week after the stunning deal was announced – for a “medical situation” and left day-to-day operations to two executives.
LIV Golf returns this week in Spain, finishing at least the 2023 season, if not beyond. The agreement states that the PGA Tour and the European Tour “will work cooperatively and in good faith to establish a fair and objective process for all players who wish to reapply for membership … and to establish reasonable criteria and conditions for readmission in accordance with each Tour’s disciplinary policies.”
The PGA Tour suspended players when they participated in a LIV event because they did not have releases required by the tour’s policy. The suspensions are believed to be at least through the 2024 season.
The AP previously reported assurances in the deal that the tour would retain a controlling interest in the new commercial entity — known as “NewCo” — regardless of how much Saudi Arabia’s public investment fund contributes.
The framework agreement sent to Blumenthal lacks details that all three sides are still trying to work out, such as the future of LIV Golf.
It did not mention how much PIF planned to invest in the new entity. The PGA Tour and DP World Tour – the commercial name of the European Tour – contribute all their commercial business and rights. NewCo would be an umbrella for all future golf-related investments in the three groups.
NewCo will conduct an “objective empirical data-driven evaluation of LIV and its prospects and potential” and assess the benefits of team golf and then decide “how best to integrate team golf into PGA Tour and DP World Tour events going forward,” the agreement says.
Monahan, as CEO of the new entity, would determine the plan and strategy for NewCo operations, which would include LIV.
The second section of the six-page agreement is referred to as the Saudi foundation and two leading tours creating a global golf partnership and “uniting the game.” It later mentions the new entity’s plan to generate financial returns, “including through targeted mergers and acquisitions to globalize the sport.”
The PGA Tour and the European Tour already have an alliance, and other tours such as Japan and South Africa have similar agreements. The Asian Tour is affiliated with LIV Golf.
The agreement also says the tours and the PIF would work together to try to get the Official World Golf Ranking to recognize LIV Golf, although that would be subject to the OWGR criteria and the application LIV submitted last July. LIV does not meet several criteria, in part because its events have no cuts and 48-man fields.
Along with investing in the new commercial entity, PIF would make a financial investment as “first corporate sponsor” of the PGA Tour or the European Tour, invest in becoming a title sponsor on one of the tours and contribute to a program aimed at growing the game.
PIF sponsors the Saudi International, which was previously part of the European Tour.
The agreement also set a timeline to reach a final agreement by December 31. If it is not done by then, the parties can agree to extend the deadline or go back to business as usual.
An important part of the agreement was to dismiss all lawsuits – the antitrust suit against the PGA Tour and the tour’s countersuit against LIV Golf, in which PIF was a co-defendant. A federal judge in California dismissed those lawsuits last week.
The PGA Tour board has a previously scheduled meeting Tuesday in Detroit, though board members are not expected to take action because so many details have yet to be worked out. The Justice Department is also still investigating the deal, part of an audit that began last summer shortly after LIV Golf launched.