The Dec. 31 deadline for the PGA Tour and Saudi Arabian Public Investment Fund to finalize their agreement to house commercial operations under a new for-profit entity is in jeopardy of being pushed back, according to Bloomberg. The likely delay spawns primarily from two topics: antitrust concerns from U.S. regulators and PGA Tour players demand for equity in the new entity.
Other topics still up for discussion include financial details surrounding PIF’s investment in the new for-profit entity, called PGA Tour Enterprises, and various contracts. According to the framework agreement, the fund holds first right of refusal for additional investment opportunities and veto power over others who may invest in the future.
During the July 11 hearing in front of the U.S. Senate PGA Tour chief operating officer Ron Price testified that PIF’s initial investment had been discussed to be “north of $1 billion.” Soon after, the two parties dropped the non-solicitation clause from the framework agreement which was put in place to stop the flow of players between tours during negotiations. The removal of the clause was due to antitrust pressure applied by the Justice Department as it tightened the labor market and suppressed competition for players.
A deadline extension has yet to officially be added, but the delay would mean both the PGA Tour and the Saudi-backed LIV Golf would operate as is in 2024 until the deal is finalized.
This comes two months after the PGA Tour named Tiger Woods the sixth player director on its policy board as part of new transparency and governance measures. The new board consists of six player directors, five independent directors and the PGA of America director.
In addition to Woods’ inclusion on the board, a number of player requests — which were granted by PGA Tour commissioner Jay Monahan — were added:
- No major decision can be made in the future without the prior involvement and approval of player directors
- The player directors’ special advisor, Colin Neville of the Raine Group, will be made fully aware of negotiations between the PGA Tour and Saudi Arabian PIF regarding its framework agreement
- Player directors will have authority to approve or deny any changes to tour as part of the framework agreement discussions
Through Neville, players appear to be taking full advantage of their new-found power as they seek to garner as much control as possible and pave the avenue through which LIV Golf members will be welcomed back to the PGA Tour. Receiving equity is not seen as a way to compensate those who forwent lucrative contracts from the rival league, but rather as a way to ensure PGA Tour membership has a share in PGA Tour Enterprises.