June 19, 2024

PGA Tour announces $3 billion investment by SSG, negotiations continue with PIF

The PGA Tour has finalized a $3 billion deal with Strategic Sports Group (SSG), the Tour announced Wednesday. It held meetings with the PGA Tour Player Advisory Council as well as the larger membership of the PGA Tour, Korn Ferry Tour and Champions Tour to announce the news.

PGA Tour commissioner Jay Monahan touted the deal as a win in a memo to the players.

“By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour,” Monahan said. “Fans win when we all work to deliver the best in sports entertainment and return the focus to the incredible — and unmatched — competitive atmosphere created by our players, tournaments and partners.”

The PGA Tour Player Directors, a group that includes Tiger Woods and Jordan Spieth, voted unanimously for the deal.

“It was incredibly important for us to create opportunities for the players of today and in the future to be more invested in their organization, both financially and strategically,” said PGA Tour player directors Woods, Spieth, Patrick Cantlay, Peter Malnati, Adam Scott and Webb Simpson in a statement. “This not only further strengthens the Tour from a business perspective, but it also encourages the players to be fully invested in continuing to deliver – and further enhance – the best in golf to our fans.”

SSG is a group of investors that own a variety of sports franchises. It will make an initial investment of $1.5 billion into PGA Tour Enterprises and provide a “strategic focus on maximizing revenue generation for the benefit of the players.”

“Our enthusiasm for this new venture stems from a very deep respect for this remarkable game and a firm belief in the expansive growth potential of the PGA Tour,” said John Henry, principal owner of Fenway Sports Group and manager of the Strategic Sports Group.

PGA Tour players will collectively have access to $1.5 billion in equity shares of the new company, PGA Tour Enterprises. The amount for individual players will be determined by career accomplishments, recent success and tour membership status and will vest over time.

Negotiations with the Saudi Arabia Public Investment Fund (PIF) remain ongoing.

What is SSG?

The Strategic Sports Group seems to have come together specifically for this investment, the largest ever in pro golf. The list of investors includes Mark Attanasio (Milwaukee Brewers), Arthur Blank (Atlanta Falcons), Steve Cohen (New York Mets), John Henry and Tom Werner (Boston Red Sox, Liverpool FC, Pittsburgh Penguins), Wyc Grousbeck (Boston Celtics), Marc Lasry (former Milwaukee Bucks owner) and Tom Ricketts (Chicago Cubs).

Many of those names are new to golf, though Blank, Lasry and Cohen also own TGL franchises in Atlanta, San Francisco and New York.

The PGA Tour announced last month it had chosen to move forward in negotiations with the group, after considering pitches from other hedge funds and investment capital firms.

What about the PIF?

While this represents a significant investment by an outside group into the PGA Tour, it does not end the ongoing fight between the tour and LIV, the PIF-funded team golf league that will operate its first event of 2024 this week in Mayokaba, Mexico.

And LIV continues to be aggressive — announcing Tuesday that Tyrrell Hatton, a top-10 player in the world according to DataGolf.com, has joined Jon Rahm’s Legion XII team along with touted amateur Caleb Surratt. In the absence of a deal — and with the tour openly negotiating with other investors — LIV has been unafraid to swoop in and increase its relevancy by adding more known, top-level players.

Rory McIlroy, long the biggest and most outspoken proponent of the PGA Tour, seems resigned to the current situation. He was asked Tuesday if a win at this week’s AT&T Pebble Beach Pro-Am or the Genesis Invitation next month would be “cheapened” by Rahm, Dustin Johnson and others not being in the field.

“I’d like to win here and stand up with a trophy on 18 green and know that I’ve beaten all of the best players in the world, so yeah,” McIlroy said.

What questions remain?

In a time when sponsors were pulling out of events as purses ballooned, yes, this is big news for the PGA Tour’s security and stability for the future. But it still leaves most questions unanswered. While there remains optimism in negotiations with PIF, it’s unclear what effect this ultimately has on the deal. It likely strengthens the tour’s position in negotiations, reducing its dependency on PIF investment. The other wrinkle is that any deal with PIF will likely deal with a lengthy regulatory process with the U.S. government. This likely helps the tour remain powerful in the short term.

But what does PGA Tour Enterprises look like? Very few questions have been answered. A large chunk is going to player purses and player equity, but what else does the tour plan to do with this funding? Does it hope to buy out other events? Does it want to expand the game globally? We’re still so early in this that a $3 billion deal still doesn’t provide clarity. — Brody Miller, staff writer

Required reading

(Photo of Jay Monahan: Kevin C. Cox / Getty Images)

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