Why has the PGA Tour & LIV Golf merger taken so long and what will it look like?
It was just last year that the PGA Tour and LIV Golf shook the golf world by announcing a proposed merger. Since then, there have been delays. Why?
In early June last year, the PGA Tour shocked the world when it announced that it would be merging with LIV Golf, a fledgling golf league that is funded by the Saudi Arabian Public Investment Fund (PIF). The news of course followed months worth of bitter fighting between the two organizations that saw player sanctions and even suggestions that the new golf league was nothing more than an elaborate attempt at ‘sport washing’, by a regime that many view as totalitarian and the financial hand behind many terrorist acts, including 9/11.
Is the PGA Tour/LIV Golf merger still going to happen?
In principle, Yes. On the other hand, it’s important to note that it will not be as described in the initial document that was released by the PGA Tour last summer. As most golf fans will know, a lot has happened since the agreement was first put forward not the least of which is the US government’s increased scrutiny where Saudi investment is concerned. Then, there is also the effect that the proposed merger had on fans of the game, as well as the various players who have weighed in on how purses and points should be allocated. So, where are things at now? Well, it’s clear that the initial deadline of December 31st, 2023 has come and gone, but we do know that negotiations continue. Before we get to that, let’s look at why the process has taken so long.
What has delayed the PGA Tour/LIV Golf merger?
If we’re honest, this was never going to be something that happened according to plan or in any prescribed timeline. For starters, there is the fact that players and fans alike were blindsided by reports of the merger. To that end, it was only logical when a number of players openly voiced their outrage. So intense was the backlash that PGA Tour commissioner Jay Monahan essentially found himself under siege, something that seemingly and sadly let to health concerns and an indefinite leave of absence. Upon his return, he began the process of giving more clout to the players having apparently read between the lines where job security was concerned. This brings us to the present situation wherein the argument stands that perhaps the players are now too powerful.
Where specifics are concerned, there are now six players on the Policy Board of the PGA Tour, five independents, and one from the PGA of America. To be clear, voting requires a two-thirds majority i.e., players still need support elsewhere to make changes. That said, it’s clear that they now control the lion’s share on the board. Regarding who those six members are, there are three in particular who are worthy of attention: Tiger Woods and Jordan Spieth who have both made their views known, and Patrick Cantlay who is now regarded by many as “...the most powerful person on the PGA Tour.” As things stand, Cantalay is reportedly in favor of making a deal with US investors, while Woods himself recently issued a statement in which he said that all player directors are “working together to represent the PGA Tour.”
Ultimately, what has resulted from the mixture of governmental critique and the PGA Tour’s internal shake-up, is a greater focus on securing American investment as opposed to that which comes from Saudi Arabia. What we have seen so far is the PGA taking steps to do so as evidenced by an announcement last December, when the Tour declared that its Policy Board had “unanimously” agreed to continue negotiations with Strategic Sports Group, a consortium consisting of the Fenway Sports Group – owner of the Boston Red Sox and Liverpool – and other billionaire team owners, such as Arthur Blank (Atlanta Falcons) and Wyc Grousbeck (Boston Celtics). Conversely, the statement also indicated that the board “anticipated advancing negotiations with PIF in the weeks to come.”
OK, so where is the PGA Tour/LIV Golf merger at right now?
If we go back to Woods’ above-mentioned statement, it’s interesting to note that he also went on to suggest that SSG would be a better fit as a chief investor. “We’re trying to get a deal done with all of the different entities that we have going on here. SSG has come into the mix now,” Woods said. “(SSG) have a lot of equity and a lot of name investors that have the same alignment that we have, and we are all heading in the right direction.” Regarding the more intimate details, sources told ESPN back in December last year that a new deal would see the PGA Tour retain control of the new for-profit entity, with both PIF and SSG as minority owners. Additionally, a figure of $7 billion was mentioned in terms of the deal’s possible value. At this point, we’ve got no official word on what comes next, but based on everything that’s been said, we can only assume that will change soon.
Yet, the reality is the figure is actually irrelevant. What is now clear is that the PGA Tour doesn’t have the same leverage that it once did. That can be seen plainly in the fact that players continue to jump ship. Most recently we saw John Rahm joining LIV Golf for a reportedly more than half a billion dollars. With numbers like that being thrown around, there really is no competition. What’s more, is that reports also suggest the number of PGA stars interested in following suit is growing at an increasing rate.
Speaking about the exodus, LIV Golf chief and former legend of the sport Greg Norman was quick to touch on the ripple effect that he believes Rahm’s arrival will cause. “To have Jon (Rahm) on board was critically important to our next steps into the future and what we want to do,” Norman told the BBC’s World Business Report last year. “It will create a domino effect, there will be more apples falling from the tree - there’s no question about it, because LIV continues to grow and develop. ...Since Jon signed, less than a week ago now, I know my phone is blowing up. I know we probably have eight to 12 players who are very, very keen to sit down and talk to us about coming on board. Time will tell.” At this point, while it remains unclear as to exactly when the deal will be finalized, it appears that it will happen. Of course, what the PGA Tour’s place in all of it will be remains to be seen.