When the PGA Tour announced the $3 billion investment from the Strategic Sports Group (SSG) to create the PGA Tour Enterprises, one of the biggest questions surrounding the deal regarded player equity.
A Tour statement said “nearly 200 PGA Tour members will have the opportunity to become equity holders” in the new for-profit entity and that PGA Tour Enterprises was “also considering participation by future PGA Tour players that would allow them to benefit from the business’s commercial growth,” meaning new players or those who return from LIV Golf would have access once they gain membership.
A week after the initial release, the Tour sent an email to players – first reported online by Ryan French of Monday Q Info – on Wednesday breaking down the equity groups and how grants would work. The player grants will vest over time and only qualified PGA Tour players are eligible.
From the email:
- Group 1 consists of $750 million in aggregate equity and will be granted to 36 players based on career performance, last 5-year performance, and Player Impact Program results.
- Group 2 consists of $75 million in aggregate equity and will be granted to 64 players based on the last 3-year performance.
- Group 3 consists of $30 million in aggregate equity and will be granted to 57 players who have earned certain fully-exempt PGA Tour status categories.
- Group 4 consists of $75 million in aggregate equity and will be granted to 36 players who were instrumental in building the modern PGA Tour, based on career performance.
Of the initial $1.5 billion of the $3 billion investment, $930 million is accounted for in those four groups. PGA Tour Enterprises also allows for a co-investment from Saudi Arabia’s Public Investment Fund, “subject to all necessary regulatory approvals.”
Back on June 6, 2023, the Tour announced a framework agreement with the DP World Tour and Saudi PIF to create the for-profit entity now known as PGA Tour Enterprises. Four months later, the PGA Tour’s policy board announced it had advanced discussions with the SSG and that it had not shut the door on the PIF.
The Dec. 31 deadline to come to a definitive agreement with the PIF was extended, and Monahan recently sent a memo to players that stated “active and productive” negotiations would continue into 2024 with the PIF based on the progress made to date. Monahan and Al-Rumayyan reportedly met last month in Saudi Arabia to continue negotiations.
Two key questions remain. First, how will grants to future players be handled? Second, and most importantly, what even is PGA Tour Enterprises? As of now, the new entity is all sizzle and no steak, with lots of money but zero substance.