PGA Tour agrees to merge with Saudi-backed rival LIV Golf
- The PGA Tour agreed to merge with rival LIV Golf, which is backed by the Saudi Arabia Public Investment Fund, an entity controlled by Saudi Crown Prince Mohammed bin Salman.
- The proposed merger comes after the PGA Tour and LIV Golf have been embroiled in lawsuits regarding antitrust claims. The deal would end all pending litigation.
- PGA Tour Commissioner Jay Monahan acknowledged he would be called a hypocrite and said he accepts the criticism.
The PGA Tour has agreed to merge with Saudi-backed rival LIV Golf in a deal that would see the competitors squash pending litigation and move forward as a larger golf enterprise.
The two entities signed an agreement that would combine the PGA Tour's and LIV Golf's commercial businesses and rights into a new, yet-to-be-named for-profit company. The agreement includes DP World Tour, also known as the PGA European Tour.
LIV Golf is backed by the Saudi Arabia Public Investment Fund, an entity controlled by Saudi Crown Prince Mohammed bin Salman and has been embroiled in antitrust lawsuits with the PGA Tour in the last year. The deal announced Tuesday would end all pending litigation.
PIF is prepared to invest billions of new capital into the new entity, CNBC's David Faber reported Tuesday. Terms of the deal weren't disclosed.
The agreement — the second stunning sports deal in just months, following World Wrestling Entertainment's merger with Endeavor Group's UFC — will require the approval of the PGA Tour policy board, Commissioner Jay Monahan said in a memo to players that was obtained by CNBC.
"There is much work to do to get us from a framework agreement to a definitive agreement, but one thing is obvious: through this transformational agreement and with PIF's collaborative investment, the immeasurable strength of the PGA Tour's history, legacy and pro-competitive model not only remains intact, but is supercharged for the future," he wrote in the memo. Deal talks started about seven weeks ago, he said later Tuesday.
Monahan also acknowledged the shock and anger triggered by the deal's announcement, saying a meeting with PGA Tour players was "intense" and "heated."
PIF Governor Yasir Al-Rumayyan said Tuesday on CNBC's "Squawk on the Street" that after the merger is finalized, which he expects to be "in a matter of weeks," the new board is prepared to evaluate every proposal that is presented. Al-Rumayyan is slated to serve as chairman of the board.
"Whatever it takes that's ... what we're committed for," Al-Rumayyan told Faber.
LIV didn't see its matches distributed on TV in the U.S. until a few months ago, when the league signed a deal with the CW Network as the exclusive U.S. broadcast partner. The CW had agreed to air 14 global events, which began in February. Terms of the multiyear deal had not been disclosed.
Nexstar Media Group owns 75% of the CW Network. A representative for the company said in a statement Tuesday there would be no change to the LIV Golf event schedule for 2023.
"This is exciting day to unify and grow the game of golf," Nexstar said in the statement. "We look forward to broadcasting seven more exciting tournaments this year featuring the world's best golfers."
Rival lawsuits
Monahan said the tour looked at the game of golf "on a global basis," as its seen more growth in the sport outside of the U.S.
Still, he acknowledged Tuesday on CNBC that there has been a lot of tensions between the two organizations, but said "the game of golf is better for what we've done today."
The two organizations had filed a series of antitrust claims against the other in recent months. LIV Golf sued The PGA Tour alleging anti-competitive practices for banning its players. The tour countersued, claiming LIV was stifling competition. Disputes ensued regarding the discovery process for evidence.
The lawsuits were spurred as the upstart league had lured multiple high-profile players, such as Phil Mickelson and Bubba Watson, from the PGA Tour after the tour had banned the players from competing in LIV's events.
On Tuesday, Mickelson tweeted, "Awesome day today" as part of a post sharing the news of the merger.
The deal comes soon after LIV golfer Brooks Koepka won the PGA Championship, one of four major titles in men's golf.
As part of the agreement, the groups will establish "a fair and objective process for any players who want to re-apply for membership with the PGA Tour or DP World Tour" following the end of the 2023 season, according to a release.
Growing controversy
LIV Golf, which launched in 2022 and has been spending top dollar to lure golfers, has also been the subject of controversy, criticism and political intrigue in the U.S. PIF has reportedly invested $2 billion into LIV already, and had aspirations of creating franchises and teams that could one day be sold.
Critics of LIV have also accused PIF of "sportswashing" by using the league to distract from the kingdom's history of human rights violations.
Family members of those who perished in the Sept. 11, 2001, terrorist attacks have protested the league, including outside of events. Fifteen of the 19 hijackers on Sept. 11 were from Saudi Arabia, and Osama Bin Laden, the mastermind behind the attacks, was born in the country. It has been concluded by U.S. officials that Saudi nationals helped fund the terrorist group al-Qaeda, although investigations didn't find that the Saudi officials were complicit in the attacks.
The group 9/11 Families United said they were "shocked and deeply offended" by the merger in a statement on Tuesday.
"Mr. Monahan talked last summer about knowing people who lost loved ones on 9/11, then wondered aloud on national television whether LIV Golfers ever had to apologize for being a member of the PGA Tour. They do now – as does he," said 9/11 Families United Chair Terry Strada, whose husband Tom died in the World Trade Center's North Tower. "PGA Tour leaders should be ashamed of their hypocrisy and greed. Our entire 9/11 community has been betrayed by Commissioner Monahan and the PGA as it appears their concern for our loved ones was merely window-dressing in their quest for money – it was never to honor the great game of golf."
The statement referred to when Monahan said during an interview with CBS Sports that he had discussed these controversies with tour players.
"I think you'd have to be living under a rock not to know there are significant implications," Monahan said during the interview. "I would ask any player who has left or any player who would consider leaving, 'Have you ever had to apologize for being a member of the PGA tour?'"
Monahan on Tuesday said he expected to be called a hypocrite and that he accepts the criticism.
Former President Donald Trump, who has hosted a number of LIV Golf events at his golf courses, has defended those events, falsely claiming that "nobody's gotten to the bottom of 9/11." Last year, Trump also said on Truth Social that a merger between LIV and The PGA Tour was inevitable.
On Tuesday, Trump weighed in on the merger on his Truth Social platform: "Great news from LIV Golf. A big, beautiful, and glamorous deal for the wonderful world of golf. Congrats to all!!!"
– CNBC's David Faber and Jessica Golden contributed to this article.
CNBC on July 25 is holding Game Plan, an invite-only event in Los Angeles, with speakers including the NBA's Kevin Durant and ESPN Chairman James Pitaro, which will center around discussions regarding emerging opportunities across the sports landscape.
Read the full news release announcing the PGA Tour-LIV deal:
PGA TOUR, DP World Tour and PIF announce newly formed commercial entity to unify golf
PGA TOUR, DP World Tour, LIV Golf merge commercial operations under common ownership
Agreement establishes common goal to promote and grow the game globally for the benefit of all stakeholders, ends litigation
NEW YORK; RIYADH; PONTE VEDRA BEACH, Florida, June 6, 2023 – The PGA TOUR, DP World Tour and the Public Investment Fund (PIF) today announced a landmark agreement to unify the game of golf, on a global basis. The parties have signed an agreement that combines PIF's golf-related commercial businesses and rights (including LIV Golf) with the commercial businesses and rights of the PGA TOUR and DP World Tour into a new, collectively owned, for-profit entity to ensure that all stakeholders benefit from a model that delivers maximum excitement and competition among the game's best players.
In addition, PIF will make a capital investment into the new entity to facilitate its growth and success. The new entity (name TBD) will implement a plan to grow these combined commercial businesses, drive greater fan engagement and accelerate growth initiatives already underway. With LIV Golf in the midst of its second, groundbreaking season, the PGA TOUR, DP World Tour and PIF will work together to best feature and grow team golf going forward.
Notably, today's announcement will be followed by a mutually agreed end to all pending litigation between the participating parties. Further, the three organizations will work cooperatively and in good faith to establish a fair and objective process for any players who desire to re-apply for membership with the PGA TOUR or the DP World Tour following the completion of the 2023 season and for determining fair criteria and terms of re-admission, consistent with each Tour's policies.
"After two years of disruption and distraction, this is a historic day for the game we all know and love," said PGA TOUR Commissioner Jay Monahan. "This transformational partnership recognizes the immeasurable strength of the PGA TOUR's history, legacy and pro-competitive model and combines with it the DP World Tour and LIV – including the team golf concept – to create an organization that will benefit golf's players, commercial and charitable partners and fans. Going forward, fans can be confident that we will, collectively, deliver on the promise we've always made – to promote competition of the best in professional golf and that we are committed to securing and driving the game's future.
"We are pleased to move forward, in step with LIV and PIF's world-class investing experience, and I applaud PIF Governor Yasir Al-Rumayyan for his vision and collaborative and forward-thinking approach that is not just a solution to the rift in our game, but also a commitment to taking it to new heights. This will engender a new era in global golf, for the better."
"Today is a very exciting day for this special game and the people it touches around the world," said PIF Governor Yasir Al-Rumayyan. "We are proud to partner 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.
"There is no question that the LIV model has been positively transformative for golf. We believe there are opportunities for the game to evolve while also maintaining its storied history and tradition. This partnership represents the best opportunity to extend and increase the impact of golf for all. We look forward to collaborating with Jay and Keith to bring the best version of the game to communities around the world."
Under the terms of the agreement, the Board of Directors of the new entity will oversee and direct all the new entity's golf-related commercial operations, businesses and investments. The new entity will work to ensure a cohesive schedule of events that will be exciting for fans, sponsors and all stakeholders. 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 a right of first refusal on any capital that may be invested in the new entity, including into the PGA TOUR, LIV Golf and DP World Tour. The PGA TOUR will appoint a majority of the Board and hold a majority voting interest in the combined entity.
Separately, PGA TOUR Inc. will remain in place as a 501(c)(6) tax exempt organization and retains administrative oversight of events for those assets contributed by the PGA TOUR, including the sanctioning of events, the administration of the competition and rules, as well as all other "inside the ropes" responsibilities, with Jay Monahan as Commissioner and Ed Herlihy as PGA TOUR Policy Board Chairman. PIF's Governor Yasir Al-Rumayyan will join the PGA TOUR Policy Board. The DP World Tour and LIV Golf will retain similar administrative oversight of events on their respective Tours.
The Board of Directors of the new commercial entity will include Al-Rumayyan as Chairman and Monahan as Chief Executive Officer; the new entity's Board will also include an Executive Committee comprising Al-Rumayyan, Monahan, Herlihy and PGA TOUR Policy Board member Jimmy Dunne. The full Board will be announced at a later date, and it is anticipated that all three founding members will have representation.
Keith Pelley, Chief Executive of the DP World Tour, said "This is a momentous day. We are delighted to be able to not only reignite our relationship with PIF, but also to have the opportunity to build on our current Strategic Alliance partnership with the PGA TOUR. Together we will be stronger than ever and well positioned to continue to bring the game to all corners of the globe. To partner in this new entity and influence the growth of the game for all our DP World Tour members is energizing and exciting."
All parties will work in the months to come to finalize terms of the agreement, with details to be announced in due course.