The agreement between the PGA Tour, DP World Tour and Saudi Arabia’s Public Investment Fund sent shockwaves through the golf world earlier this month.
Since the groundbreaking news, it’s been reported the U.S. Department of Justice is reviewing the proposed deal, same with the U.S. Senate. The leaders of the Tour, PIF and LIV Golf have even been invited to a senate hearing July 11, 2023.
Information has been slow to release over the last month, leaving players and fans with countless unanswered questions. On Monday night, the framework agreement leaked on Twitter and was first reported by The Athletic.
The document is just six pages long and was signed on May 30 – a week before the news broke on CNBC – after six weeks of negotiations by PGA Tour commissioner Jay Monahan, DP World Tour CEO Keith Pelley and PIF Governor Yasir Al-Rumayyan. According to the report, the Tour sent the document to the U.S. Senate Permanent Subcommittee on Investigations, and the Tour plans to participate in the hearing while the PIF’s actions are unknown.
Here’s what we learned from the framework of the deal:
- LIV Golf’s future will be decided by the new entity’s board that will be controlled by a Tour majority.
- A “Communications Committee” will be created that will “help facilitate a smooth business transition” and “coordinate and manage communications” between PIF, LIV and the PGA Tour.
- The PIF will be “a premier corporate sponsor” of the PGA Tour, DP World Tour and other international tours, and will be a title sponsor for at least one event.
More from the agreement to create a new global golf entity, which they reference as “NewCo:”
PIF will contribute their golf-related investments and assets, including LIV, to NewCo along with a cash investment, in exchange for the issuance to PIF of an equity ownership interest in NewCo at a fair value mutually agreed by the parties. Following the contribution of assets into NewCo, NewCo shall assume all of the liabilities and obligations of the contributed assets, provided that each Party’s contributed businesses will be valued in their totality, taking into account all liabilities, commitments, contributions and obligations made or incurred by the respective prior owners, including in respect of player contracts and other working capital and operating expenses. In addition, the PIF will make a cash investment in NewCo for an incremental ownership in order to fund the growth of NewCo which will include a right of first refusal on capital raised by NewCo, provided that, for the avoidance of doubt, the PGA Tour will at all times maintain a controlling voting interest in NewCo and PIF will continue to hold a non-controlling voting interest, notwithstanding any incremental investment by PIF or exercise of its right of first refusal.
The framework agreement between the PGA Tour, DP World Tour, and PIF. pic.twitter.com/utQK0JefYV
— No Laying Up (@NoLayingUp) June 27, 2023
The new information is in addition to what was already known: Monahan will be the CEO of the new venture, Al-Rumayyan will be the chair of the board, and PGA Tour board members Jimmy Dunne and Ed Herlihy – who helped construct the agreement – will complete the executive board. The PIF will be the sole investor and have right of first refusal to new money coming in. Players will be returning to the various Tours, but it’s still unclear what must happen before they are once again eligible.
While some questions have been answered with regard to the partnership, plenty more still remain.