The PGA Tour and LIV Golf are locked in a fierce battle for the future of golf. In a stunning move, the PGA Tour has secured a massive $3 billion injection of cash from the Strategic Sports Group (SSG). This deal will not only fund tournament purses for the next five years but also provide players with $1.5 billion in equity shares. As part of the agreement, the PGA Tour will undergo a transformation and be rebranded as PGA Tour Enterprises. This strategic move is aimed at preserving the traditional essence of golf.
The masterminds behind this deal are a group of renowned sports franchise owners including John Henry and Tom Werner (Fenway Sports Group), Mark Attanasio (Milwaukee Brewers), Steve Cohen (New York Mets), Wyc Grousbeck (Boston Celtics), Arthur Blank (Atlanta Falcons), and Tom Ricketts (Chicago Cubs). Together, they have made a shrewd investment that bolsters their already impressive portfolio. This move not only provides financial stability for PGA Tour commissioner Jay Monahan but also strengthens the Tour’s position in the industry.
While the addition of investors may help alleviate some of the regulatory scrutiny surrounding the PGA Tour-LIV merger, the impact of increased money and power remains unclear. It is speculated that having more cash at their disposal could potentially influence government officials, although this is purely conjecture. Despite the injection of funds, it is unlikely that this move will expedite the pending deal. In fact, it may prolong the negotiations that were originally expected to conclude by the end of the year.
The PGA Tour’s delayed response to the defections to LIV Golf has put them at a significant disadvantage. The $3 billion investment, although substantial, may not be enough to maintain their autonomy. Top golfers such as Jon Rahm, Dustin Johnson, Phil Mickelson, Cameron Smith, Brooks Koepka, and Bryson Dechambeau have already signed lucrative contracts with LIV Golf worth a staggering $950 million. These figures do not even account for the prize money involved.
The distribution of the $1.5 billion in equity shares is another point of contention. While the PGA Tour has stated that the allotments will be based on ranking, the ambiguity surrounding membership and eligibility criteria raises questions about how the equity will be divided. Notably, golfing legend Tiger Woods, who finished 228th in the FedEx Cup rankings last season, is likely to receive significantly less compared to what he could have earned with a move to LIV Golf. Although Woods may not be concerned about the financial aspect, it highlights the disparity between a player’s value and their ranking.
One of PGA Tour commissioner Jay Monahan’s missteps was believing that adding billionaire backers to the bargaining process would give the Tour an advantage. However, negotiating with individuals who possess vast resources has proven to be a flawed strategy. The PGA Tour’s moral high ground has been compromised since the decision to merge with LIV Golf. Merely enriching the wealthy will not earn the Tour any favor, and it may even alienate potential sponsors and viewers.
The longer golf fans are deprived of seeing their favorite players compete in major tournaments and other significant events, the greater the risk of losing casual viewers and the associated revenue. Sponsors such as Wells Fargo, Honda, and Farmers Insurance have already severed ties with the PGA Tour, signaling a decline in interest. It is crucial for Monahan and the PGA Tour to acknowledge the reality they face. Desperate attempts reminiscent of the television show Succession will only succeed if the Saudis, who are unlikely to back down, are out of the picture.
