“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.