The PGA TOUR/PIF Merger: Who Won? Who Lost?

Yesterday’s announced merger between the PGA TOUR and the Saudi Public Investment Fund (PIF) may be the very definition of a “what the hell just happened?” stunner.

But of all the many, many tweets, blog posts or diatribes written in the past 24 hours, this paragraph from the official PGA TOUR website might be the most important:

“PIF will initially be the exclusive investor in the new entity, alongside the PGA TOUR, LIV Golf and the DP World Tour. Going forward, PIF will have the exclusive right to further invest in the new entity, including the right of first refusal on any capital that may be invested in the new entity.”

I’ve read that maybe a hundred times since Tuesday morning and it still says the same thing:

The Saudis just bought men’s professional golf.

Who Won? Who Lost?

Yeah, the news was as stunning as it was sudden. What appears to have been seven weeks of clandestine negotiations was a total secret. No one had an inkling the two sides were even talking, let alone planning a merger.

The end result will be an as yet unnamed new entity that will combine PIF’s golf-related commercial businesses with the PGA TOUR and the DP World Tour. The new for-profit entity will be collectively owned. PIF Governor Yasir Al-Rumayyan will be chairman of the new entity’s Board of Directors while PGA TOUR Commissioner Jay Monahan will serve as CEO.

The PGA TOUR will appoint a majority of the new Board of Directors and will retain a majority voting interest.

But the money is coming from PIF. And PIF has the right to refuse any future investor. By any reasonable measure, that says “ownership.”

Neither PGA TOUR nor LIV players had any inkling this was coming. And neither, apparently, did LIV CEO Greg Norman.

What Did the Saudis Just Buy?

This “new entity” remains somewhat vague and amorphous, at least publicly. According to the PGA TOUR website, the new agreement will “unify professional golf.”

PIF’s Al-Rumayyan may now be the most powerful man in golf. He says the deal will be a partnership with the PGA TOUR to “leverage PIF’s unparalleled success and track record of unlocking value and bringing innovation and global best practices to business and sectors worldwide.

“We are committed to unifying, promoting and growing the game of golf around the world and offering the highest-quality product to the many millions of long-time fans globally while cultivating new fans.”

The new entity will oversee and direct golf-related commercial operations, businesses and investments, and it will create a cohesive schedule of events.

The PGA TOUR, meanwhile, will remain a 501(c)(6) tax-exempt organization. It will still run PGA TOUR events. PIF will become a lead corporate sponsor for the PGA and DP World Tours.

All the window-dressing surrounding this “new entity” to oversee global professional golf for profit says the PGA TOUR is still in charge. However, it doesn’t make one bit of difference which interest holds the majority of the BOD votes. PIF is holding the purse strings. When you have the cash, you make the rules.

Did The PGA TOUR Blink?

It’s easy to say yes. But it’s more accurate to say both sides had plenty of motivation.

LIV was bleeding money and, without détente with the PGA TOUR, it wasn’t going to do otherwise. But LIV did force the PGA TOUR to find a ton more money for its players. Elevated events, guaranteed income and big paydays for needle movers required a new influx of cash. Sponsors most likely didn’t enjoy seeing Monahan showing up with his hand out, asking for more. The TOUR has the credibility and legitimacy the Saudis crave while PIF has the money the PGA TOUR needs.

For PIF, it’s further proof that money opens doors. For the Tour, it might have been the best bad idea left on the table.

Additionally, neither side wanted any part of the inside of a courtroom. This agreement means all outstanding lawsuits are dismissed so both PIF and the Tour avoid airing finances and other factoids they would prefer to keep hidden. We can also say for certain that neither Al-Rumayyan nor Crown Prince Mohammad bin Salman wanted to be deposed.

The PGA TOUR also says it’s going to explore team golf, which no doubt makes LIV fans smile. LIV pinned its hopes on the HiFlyers and RangeGoats but sponsorship dollars weren’t pouring in. The legitimacy of the PGA TOUR may change that dynamic.

And there have been rumors of some LIV golfers wanting out of their deals and back into the PGA TOUR. We don’t know, and now won’t ever know, if any LIV golfers were actively looking for ways to get out. But with most LIV golfers dropping in the Official World Golf Rankings, qualifying for majors would have been difficult for some and impossible for many.

What Happens To LIV?

LIV fans are probably enjoying a healthy dollop of schadenfreude on their waffles this morning. And to some degree, it’s justified. But the agreement focused on PIF’s involvement in the new entity. LIV’s involvement in the story is, quite literally, parenthetical.

It says here that LIV, after the 2023 season, most likely goes away. As does Greg Norman.

Both did their job for the Saudis. All the Saudis ever really wanted was a seat at the table for professional golf. If you believe it was all about sportswashing you won’t get any argument here. But everything PIF does is in support of the Crown Prince’s Vision 2030.

PIF invests unimaginable sums of money in Vision 2030. It’s a wide-ranging effort to modernize Saudi Arabia’s economy, infrastructure and society to become less reliant on oil. The Saudis identified tourism and golf as key pillars to encourage outside investment in their country. LIV was part of that effort.

We’ve long contended the Saudis don’t particularly care if LIV turns a profit. It didn’t need to as long as it served the goals of Vision 2030. With this merger, LIV is no longer needed. The Saudis now have their seat at the table.

Norman had been keeping a lower profile in recent weeks. By all accounts, he had no idea the two sides were even talking. Al-Rumayyan did say on CNBC that Norman remains a partner but it’s doubtful he’ll be involved in the new entity. Tiger famously said any deal with LIV couldn’t include Norman. So, if LIV as we know it goes away, so does the Shark. He did his job and will most likely walk away with a nice honorarium.

Shotgun Wedding?

From the PGA TOUR players’ perspective, this deal seems like a sellout. Golf Channel is reporting yesterday’s meeting between Monahan and players at the RBC Canadian Open was “intense and heated.” The word “hypocrite” was used liberally.

But both sides had plenty to lose if the war continued. The dueling lawsuits could have been disastrous. No one was watching LIV on CW. And other than the event in Australia, enthusiasm for LIV has been modest, at best. Meanwhile, the PGA TOUR lost Honda as a tournament sponsor and other sponsors were reportedly teetering. The two sides needed each other.

Meanwhile, questions linger. How do the LIV golfers who want back in actually do so without pissing off Tour players who stayed loyal? The PGA TOUR and the DP World Tour will try to find a fair and equitable path but what it will look like is anyone’s guess.

Monahan has plenty of questions to answer to his rank and file. He was full of bravado a year ago about blood money, the 9/11 families and human rights. And Rory, Rahm and others went to bat for him and the Tour. Many turned down big-money LIV deals to stay loyal to the PGA TOUR. It will be interesting to see what that loyalty is worth.

As we’ve seen on social media, LIV golfers appear to be giddy. Phil, in particular, should be smiling. During the “scary mf-ers” talk with Alan Shipnuck, Phil famously said the only reason to go down the LIV path was that it’s a once-in-a-lifetime opportunity to reshape the PGA Tour.

It turns out he was right.

The PGA TOUR/PIF Merger: Let’s Elope

Sportswashing, blood money and hypocrisy aside, this is a pragmatic deal for both parties. PGA TOUR players rightly irked by the abrupt about-face will likely be soothed by the opportunity to make even more money. And the Saudis obviously got what they wanted. They not only got the seat at the professional golf table they so clearly desired, they wound up buying the whole dining room set.

LIV, as we know it, will most likely cease to exist once its season is over. Whatever the “new entity” dreams up for a global tour will take its place. It may be called LIV or something else but it will give more professional golfers more opportunities to make more money on more continents. If you play golf for a living, that can’t be a bad thing.

As long as you’re OK with where the money comes from.

And since Monahan and the PGA TOUR now are officially OK with where the money comes from, it’s an easier pill to swallow.

The PGA TOUR gets what it wants: an end to hostilities. There’s no need to defend itself against anti-trust charges. And there’s a financial jackpot to keep players, sponsors and virtually every other stakeholder happy.

Provided they’re OK with where the money comes from.

The Saudis? They’re the happiest of all to elope. They get their seat on the world stage and their efforts to sportswash in support of Vision 2030 are complete. LIV was part of a larger effort to convince enough people that Saudi Arabia’s human rights record is no worse than China’s. And if you’re OK with China, then you should be OK doing business with and in Saudi Arabia.

That, friends, was the end game all along.

And in the process, the Saudis now own men’s professional golf.

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