With the self-imposed December 31 deadline looming for the PGA Tour and Saudi Arabia’s Public Investment Fund, PGA Tour veteran Davis Love III has confirmed the leader in the clubhouse for the worst-kept secret in golf – the deal isn’t getting done any time soon.
“The only thing I do know is nothing is going to happen really fast,” Love said during an interview on Friday in Ponte Vedra Beach, Florida, where he was meeting on a golf course project.
Asked if he thought a deal beyond the framework agreement, which was announced on June 6, would be consummated by the end of the year, he said, “I don’t see any way.”
But Love isn’t discouraged. He said that the Tour has returned its focus to determining what is best for the players and he likes their options.
“It’s forced us to take a look at what has been going on for 53 years and think about what the next 50 years will look like,” he said. “How do we set up our company to be ready for the future?”
It’s also given him a fresh perspective on the players who jumped ship and accepted lucrative guaranteed money offers to join the upstart LIV Tour.
“I told some of them this in the very beginning. I’m not against you as a person, I’m against what’s happening and I think you’re making a bad business decision,” Love said. “Jay tried to explain it to these guys, you are signing with our competitor and giving our competitor leverage that is going to hurt our ability to make decisions and hurt our financial position. You don’t really understand that it is not just playing in this golf tournament versus that one.
“I’m still against the fact that this is a hostile takeover. These guys signed with a company that is trying to take us over. If a bunch of guys left Pepsi and went over to Coke and tried to take over Pepsi would you ever let them come back to Pepsi? I don’t think so. It may not be a perfect comparison but they sued us to make us change our rules so they could get what they wanted.”
But what should the future look like for the Tour? Love said that is the hot topic inside the halls of PGA Tour headquarters and with the policy board. As the longest-serving tenured member of the PGA Tour policy board and one of the Tour’s elder statesmen, Love has been called back into duty as a member of a small “ad hoc” governance committee to make sure that is top of mind.
“I’ve been drug back into the board conversations and I’m learning more and more. It’s so much deeper than should (LIV) be getting world ranking points. There’s a whole lot I don’t know but I do know there is nothing going on right now besides where do we want to go?” he said. “We might have screwed up the last three years, now how do we set up the PGA Tour for the future? Is there a different model? We’re independent contractors, maybe we’re not independent contractors? The lawsuits are dropped; now what do we want to do, what does (the PIF) want to do? Do they really want to keep blowing that much money on LIV? Probably not.”
Love suggested that the reason a deal may not be reached before the deadline is due to the Saudi’s unwillingness to negotiate.
“It’s just like the lawsuit: we’re never going to go to trial if they don’t ever do discovery. Our staff and players did discovery. They refused.
“We made an offer,” Love continued, referring to the Tour, “and if you don’t ever communicate, we can’t make another offer. It’s bizarre what’s going on. It’s a long way from anything. The sharks are circling. Now everyone wants to invest in the PGA Tour.”
It’s been reported that as many as 10 different investors have emerged as potential options for the Tour — although one company, Endeavor, reportedly said it already has been rejected — either to dilute the PIF’s ownership stake, which could make a deal more palatable to the U.S. Department of Justice and in the court of public opinion, or possibly as an alternative to Saudi money. Love said it will take time to weigh those options too.
“We don’t need money, that’s the beautiful thing,” he said. “One very smart business person said, ‘You may think you’re in a mess but I buy distressed companies and try to fix them to make money. Your company isn’t in trouble, you make a lot of money. It’s perfectly fine the way it is. All you’re trying to do is make it better. You’re in a great position.’”
Love went on to point out that it isn’t just the Saudi fund he is concerned about partnering with, but rather extends to any of the investment funds looking to pump money into the Tour.
“If it was Warren Buffett instead of PIF, do we really want Warren Buffett to control the PGA Tour just because he gave us a whole bunch of money? Shouldn’t the players control the PGA Tour and the staff that the board approved?” he mused.
Love is delighted that Tiger Woods has joined the Tour’s policy board to add another voice and said the first matter of business should be to shore up Tour governance and start rebuilding trust with key constituencies.
“How do we restructure the board – we need a new independent director – that has to happen first,” Love said. “Then we can go decide if there’s a deal somewhere.”
When asked why he thought Woods wanted to become involved in the business of the Tour at this critical juncture, Love said, “One is his injury and not playing right now but also helping a bunch of players get more involved, he loves that…Maybe he sees it as a responsibility and maybe he sees it as an opportunity, I don’t know. I’m just glad he’s doing it.”
Even as the clock ticks to make a deal with PIF, Love is looking big picture and thinking about the long term.
“I think it is going to be incredible for our business,” he said. “The only thing I do know is nothing is going to happen really fast.”