The US PGA Tour announced a deal worth up to $3 billion with a group of billionaire sports team owners on Wednesday to create a for-profit entity, PGA Tour Enterprises.
The commercial venture partnership with Strategic Sports Group (SSG), under the PGA Tour’s control, offers nearly 200 PGA Tour players the chance to become equity holders in the new company launched Wednesday.
SSG includes Fenway Sports Group, owners of English football’s Liverpool FC, MLB’s Boston Red Sox and the NHL’s Pittsburgh Penguins, plus MLB New York Mets owner Steven Cohen and NFL Atlanta Falcons and MLS Atlanta United owner Arthur Blank.
Under the program, players would collectively access more than $1.5 billion in grants that vest over time with SSG investing an initial $1.5 billion and the possibility of investing another $1.5 billion later.
The money would maximize revenue to benefit players as well as enhance worldwide golf growth opportunities, said three-time major winner Jordan Spieth, among the PGA Policy Board player members who unanimously backed the deal.
“It’s navigating the next media rights deals,” Spieth said. “It’s trying to figure out how to better monetize the content that we have at the PGA Tour. We’re going to rely on them (SSG) is the short answer to help dictate how to grow that Newco.
“You talk about the funding, but really the strategies that they can have in navigating that space will be very important.”
Player equity grants, according to a statement by the PGA Tour, “will be based on career accomplishments, recent achievements, future participation and services and PGA Tour membership status and grants are only available to qualified PGA Tour players.”
“The coolest thing about it is the players are now owners,” Spieth said. “Not only do they benefit with the tour, they now are equity owners so they want to make the product better.
“We’re in a place where we could be better than we’ve ever been.”
The PGA Tour also said that progress has been made in ongoing merger talks with the Saudi Arabian Public Investment Fund (PIF), backers of the LIV Golf League, which will be allowed to make future investments in PGA Tour Enterprises.
“Both parties are working towards an ultimate agreement,” the PGA Tour said in a statement.
The talks regard completing a merger framework deal announced last June that would unite the PGA and DP World tours with the PIF.
Spieth questioned the importance of a PIF-PGA merger in the wake of the SSG deal, seeing more benefit from a LIV-PGA talent reunification more than Saudi financial support.
“I’m not sure of the level necessarily of the importance,” he said. “I don’t think that it’s needed. I think the positive would be a unification.”
The PGA Tour announcement of the SSG deal said terms would allow for an investment by the PIF in the future “subject to all necessary regulatory approvals,” a nod to US lawmakers who have inquired into details of the Saudi plan.
“By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour,” said PGA Tour commissioner Jay Monahan, chief executive officer of the new PGA Tour Enterprises.
PGA Tour player directors Spieth, Tiger Woods, Adam Scott, Webb Simpson, Peter Malnati and Patrick Cantlay said in a statement they were proud to give unanimous support to the new deal with SSG.
“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,” their joint statement said.
“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.”
John Henry, Fenway Sports Group’s principal owner and manager of SSG, was excited to hammer out final terms after months of talks.
“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,” he said.