[PHOTO: Jared C. Tilton]
Despite rumours that the framework agreement with Saudi Arabia’s Public Investment Fund is in jeopardy, PGA Tour commissioner Jay Monahan asserted to tour membership that conversations remain ongoing.
In a memo sent to players on Tuesday (first reported by Golf Channel), Monahan reiterated that his focus remains working “toward a definitive agreement with PIF and the DP World Tour as our priority”.
“Progress has been deliberate given the complex nature of the potential agreement, and we will keep you apprised of the progress, with continued input and direction from your player directors and player adviser Colin Neville,” Monahan wrote.
Since the tour’s surprise announcement that it had come to a detente with PIF in June, the PGA Tour has been entertaining interest from several companies vying to provide financial backing. It remains unclear if this backing would be an alternative to PIF’s support or to supplement it in order to appease U.S. antitrust regulations. Earlier this spring, the PGA Tour acknowledged these discussions in a memo to its membership. “We remain focused on reaching a definitive agreement with PIF and the DP World Tour, but not surprisingly, these negotiations have resulted in unsolicited outreach and proposals from a number of other interested investors,” the PGA Tour’s Jason Gore wrote in the memo, which has been obtained by Golf Digest. “All of this activity reinforces the tour’s strong position and our potential for growth.”
On Tuesday, Monahan said the review of these bids remains ongoing after a Monday policy board meeting. Entities in the bidding process include the Fenway Sports Group (which owns the Boston Red Sox, Pittsburgh Penguins and the Premier League team Liverpool F.C.), Acorn Growth, Eldridge Industries, and the investment firm KKR & Co. Executives from Endeavor—the parent company the WWE, the UFC, and sports agency IMG—said last month its bid was rejected.
Tuesday’s memo also noted that the tour has designed a program that would allow direct equity ownership for players in the new for-profit entity.
Other items in the memo include the announcement that Patrick Cantlay was re-appointed as a player director, and that Valero chairman Joe Gorder will join Ed Herlihy, Jimmy Dunne, Mark Flaherty and Mary Meeker as independent directors on the board. Gorder fills the vacated spot of Randall Stephenson, a former AT&T executive and an influential voice in professional golf, who resigned from his position on the policy board in July citing “serious concerns” with the tour’s proposed deal with PIF.
The framework between the tour and PIF calls for a new agreement to be completed by the end of the year, although both sides can agree to extend the deadline. The memo did not address if the deadline would be extended. Additionally, outside obstacles remain for the PGA Tour–PIF partnership. The U.S. Senate opened an investigation into the pending deal, citing that the alliance “raises concerns about the Saudi government’s role in influencing this effort and the risks posed by a foreign government entity assuming control over a cherished American institution”. The deal could be reviewed by the Committee on Foreign Investment in the United States, which analyses mergers regarding potential threats to the nation’s security. The tour continues to be under an antitrust probe by the U.S. Department of Justice, and PIF’s investment into the tour is expected to fall under this investigation.
“Even if we get a deal done, it doesn’t mean that it’s actually going to happen,” said Rory McIlroy, a member of the policy board, during a press conference on Tuesday at the DP World Tour Championship in Dubai. “That’s up to the United States government and whether the Department of Justice think that it’s the right thing to do. So it wouldn’t be a sure thing.”
Asked more about the status of the negotiations or if he could elaborate on any details being discussed, McIlroy was stoic in his response.
“If you were in the middle of it, you would see that there’s a path forward. It’s just that no one on the outside has any details,” McIlroy said. “Loose lips sink ships, so we are trying to keep it tight and within walls. I’m sure when there’s news to tell, it will be told. But getting something done sooner rather than later is a good thing.”
