What's Missing From The PGA Tour-European Tour Strategic Alliance News?

We knew the sides were talking months ago. Then news on a mega-tour merger went silent as the focus turned to merely getting 2020 golf tournaments off the ground.

Then we got the Friday-after-Thanksgiving news.

Belaboring the cynical timing of Friday’s “landmark strategic alliance” announcement could grow tiresome, but it’s also hard to filter much of anything out of the detail-light European Tour-PGA Tour release without returning to the odd rush to share so little detail.

This much is apparent: Jay Monahan joins the European Tour Board of Directors and with it, he brings a check of an undetermined amount to own a stake in their impressive television production operation. Less apparent: how much of that is an investment in a media operation versus a quick way to help the European Tour’s finances?

In a call with UK writers, ET Chief Keith Pelley refuted the idea that this was about finances:

.@EuropeanTour CEO Keith Pelley on "strategic alliance" with @PGATOUR :"Emphatically, this is not a merger. I read 1 tweet that said a takeover is inevitable because of the situation that we are in. We are categorically not in financial difficulties, that is simply wrong."

— Phil Casey (@pcaseysafc) November 27, 2020

But as the AP’s Doug Ferguson writes: “The announcement comes toward the end of a devastating year financially for both tours. The PGA Tour has lost more money than Europe because of its size, though it had more in reserve to handle the crisis.”

Setting the finances aside, this looks like the PGA Tour blocking a European Tour acquisition/merger/strategic partnership/just friends/whatever-you-want-to-call-it deal with the Raine Group. They are holders of the proposed Premier Golf League that was declared dead back in March.

The dance of living dead!

Golfweek’s Eamon Lynch exclusively declares today’s announced deal another nail in a coffin purportedly already six feet under when the pandemic loomed. Lynch writes:

The historic alliance announced Friday between the PGA Tour and European Tour came after months of tense negotiations, and fended off a rival bid to take a stake in the European circuit by the private equity group fronting the Premier Golf League, multiple sources have confirmed to Golfweek.

Back in March Lynch wrote the PGL “scheme” was “condemned to failure”, which begs the question, why the need for today’s fending off deal? Lynch explains this way:

The prospect of Raine Group — and by extension, Premier Golf League — gaining a foothold through the European Tour caused dread among executives at the PGA Tour, which views the PGL as a potential existential threat should it successfully lure major stars away with the promise of huge paydays.

There is life after death!

A number of sources said the Raine Group proposal was always unlikely to win favor with the European Tour’s board and was being used as leverage to secure better terms from the PGA Tour, which was keen to ensure the PGL did not secure the infrastructure and tournament network from which it could launch its own rival operation.

After checking in with sources who have knowledge of the Raine Group’s efforts, negotiations between the private equity firm and European Tour had advanced considerably this summer.

Around 50 meetings had taken place this year.

Zoom’s with the player board and Board of Directors had taken place after Raine was given full access to European Tour financials, including the Ryder Cup. That was a risky leverage bluff by Chief Executive Keith Pelley but it does appear to have led to a last-minute deal where the PGA Tour wrote a check to stave off a rival. A dead one at that.

But as one source put it, “To paraphrase Mark Twain: reports of the PGL’s death are greatly exaggerated.”

Beyond the questions of financials and dead proposals, what does this mean for players, fans and sponsors?

For now the alliance appears to be a survival move with benefits TBD. Fans might eventually get a better world schedule that will undoubtedly be streamlined due to the pandemic. Players, however, will face the prospect of a monopoly that some like Rory McIlroy openly lamented with the Premier Golf League’s more controlled franchise infrastructure. And sponsors? Perhaps there is a better solution to the WGC, Rolex, Race to Dubai and FedEx elements that seem to clash instead of delivering better golf tournaments.

Until more exciting details come forward, Andy Johnson’s take sums things up:

The PGA Tour bought a competitor with the same product and from a financial side, a worse one. The PGL has always bet on providing a different product. The positive spin for the PGL is that the Tour has doubled down on the same existing product.

— Andy Johnson 🍳 (@the_woke_yolk) November 27, 2020

This would be like if when Google came out, Yahoo bought up a smaller worse search engine. Google smoked Yahoo because it provided significantly superior products.

— Andy Johnson 🍳 (@the_woke_yolk) November 27, 2020