Tag: Ari Emanuel

Report: PGA Tour evaluating alternative sources of capital beyond current framework agreement with PIF

“We put in a bid. It’s one of the great sports. I love it. You know, I think we could add to it what we’ve added to all of our sports.”

How are things progressing in the PGA Tour’s efforts to move forward on the framework agreement it signed in June with Saudi Arabia’s Public Investment Fund? It depends who you ask.

ESPN reported “that while the negotiations with PIF chairman Yasir Al-Rumayyan and other officials with the country’s sovereign wealth fund are ongoing, the proposed deal is far from getting done for a variety of reasons, including PIF officials wanting more control of the new for-profit enterprise. Sources said the Saudis are also digging in their heels on incorporating team golf into the sport’s future global ecosystem.”

Earlier this week, PGA Tour executive Jason Gore sent a memo to players providing an update. As first reported by ESPN, Gore wrote, “We remain focused on reaching a Definitive Agreement with PIF and the DP World Tour, but not surprisingly, these negotiations have resulted in unsolicited outreach and proposals from a number of other interested investors. All of this activity reinforces the Tour’s strong position and our potential for growth.”

Could the Tour end up going another direction and avoiding the scrutiny of the U.S. Department of Justice’sAnitrust Division? It’s a direction that Randall Stephenson, in his letter of resignation as an independent director of the PGA Tour’s board, suggested the Tour should consider. He wrote, “I hope, as this board moves forward, it will comprehensively rethink its governance model and keep its options open to evaluate alternative sources of capital beyond the current framework agreement.”

Bloomberg previously named three bidders last month, including Endeavor Group Holdings, Inc. In May, Endeavor CEO Ari Emanuel said on the Freakonomics podcast that, at the behest of LIV’s Phil Mickelson and Bryson DeChambeau, the company had been considering investing a billion dollars in LIV until Tour Commissioner Jay Monahan persuaded him to reconsider.

Speaking at a Bloomberg conference this week, Emanuel confirmed the company is interested in buying a stake in the Tour.

“We put in a bid. It’s one of the great sports. I love it. You know, I think we could add to it what we’ve added to all of our sports.”

Fenway Sports Group, which owns the Boston Red Sox and has strong ties to Monahan, who formerly worked there, and Henry Kravis, of “Barbarians at the Gate” fame as co-founder of the investment firm KKR & Co., were also mentioned by Bloomberg as potential U.S. investors.

Bloomberg reported last month that Endeavor Group Holdings Inc. and Fenway Sports Group, which owns the Boston Red Sox, Pittsburgh Penguins and the Premier League team Liverpool F.C., were exploring investing in the PGA Tour as a “possible alternative transaction” to the pending deal with PIF. Bloomberg reported that Henry Kravis, co-founder of the investment firm KKR & Co., was among other U.S. investors contemplating a potential deal with the PGA Tour.

Emanuel said that his company was competing with “like seven other bidders.” According to an ESPN source privy to the state of the negotiations, “at least 10” private equity groups and other investors have had discussions about investing in the PGA Tour. “If the negotiations with PIF fail, the PGA Tour’s goal would be to build a $2 billion ‘war chest’ equal to what the Saudis had committed to investing in the Tour,” ESPN reported.

Collin Neville, who was hired as a consultant to the PGA Tour, also leads the sports practice at the Raine Group, a venture capital firm, and previously led the Premier Golf League’s unsuccessful negotiations with the DP World Tour, clearly sees the potential for reimagining the Tour’s non-profit status in a for-profit world.

For now, the Tour appears to be moving forward with PIF. Monahan teamed with board members Jimmy Dunne and Ed Herlihy to strike the framework agreement after a series of secret meetings with PIF governor Al-Rumayyan and announced the creation of a new for-profit business entity on June 6.

The framework agreement expires Dec. 31, though there have been reports it could be extended into 2024.

CEO says Endeavor considered $1 billion investment in LIV Golf that would’ve replaced Saudi Arabia

Ari Emanuel shared some interesting opinions on Saudi Arabia while discussing LIV Golf.

Ari Emanuel, the chief executive officer of Endeavor – the parent company of UFC as well as talent agencies IMG and WME – recently joined Freakonomics Radio and discussed how the company considered a $1 billion investment in LIV Golf.

According to Emanuel, Phil Mickelson and Bryson DeChambeau made an approach to talk about funding, and Endeavor held internal discussions for a proposed $1 billion investment in LIV Golf, which is now financed by Saudi Arabia’s Public Investment Fund.

Thanks to Endeavor’s ties throughout professional golf, as well as Emanuel’s relationship with PGA Tour commissioner Jay Monahan, the plans for the investment fell through.

“We’re all connected in golf,” Emanuel said. “And (the PGA Tour) said, ‘Please don’t do it.’ So we stopped. I’m friends with Jay. We have a lot of business with Jay. I don’t want to hurt Jay.”

“I said to Jay, ‘We’re pulling out. But you have got to figure out an economic solution here because … it’s going to force you,’” Emanuel continued. “And he did. To his credit, I think Jay did an incredible job.”

LIV Golf is currently wrapped up in an antitrust lawsuit against the PGA Tour, and the U.S. Department of Justice is also investigating the Tour for anticompetitive actions with regard to LIV.

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LIV Golf has long been criticized as a way for Saudi Arabia to sportswash its human rights record. The Kingdom has been accused of wide-ranging human rights abuses, including politically motivated killings, torture, forced disappearances and inhumane treatment of prisoners. Not to mention members of the royal family and Saudi government were accused of involvement in the murder of Jamal Khashoggi, a Saudi journalist and Washington Post columnist, at the Saudi consulate in Istanbul in 2018.

Emanuel said he doesn’t have a moral stance on LIV being funded by the PIF and he isn’t concerned about sportswashing.

“I haven’t really thought about it. I have enough on my plate,” he said. “They’re doing what they’re doing.”

Emanuel said he once met with Saudi Arabia’s Crown Prince Mohammed bin Salman to discuss a deal and called him “as charming as could be.”

“He’s incredible,” Emanuel gushed. “He had this whole vision, bringing entertainment and movies back. And he wanted to spend $30 billion in entertainment. Well, I can do math, $30 billion, I mean, it’s money. And I thought his vision was incredible.”

Just seconds later Emanuel was quick to cover his comments by adding the following: “But let’s be very clear about something. I’m not defending what they did. You know, I’ve had a brother that’s been in two White Houses. Every country does bad things. They just don’t do it in an embassy.”

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