Fact or Fiction: Is There a New Deal Between the PGA Tour and LIV?

A report from The Sun, part of the Murdoch media empire, indicates that the PGA Tour and LIV have reached a deal that was brokered by Tiger Woods, Rory McIlroy, PGA Tour Commissioner Jay Monahan and the Saudi Arabia’s Public Investment Fund ( PIF, creator of LIV), headed by Yasir Al-Rumayyan. Right now, with no announcement being made by the PGA Tour, this may be more in the realm of wishful thinking than done deal. 

The reason all this falls under fact or fiction is that if a deal is done and concluded and signed off on and real, for lack of a better term, the PGA Tour sends out a press release to explain it, just as they did with the Strategic Sports Group (SSG) deal. They haven’t done that yet.

Also, according to The Sun, the LIV events will be folded into the PGA Tour, and according to Sports Illustrated, $1.5 billion will be put into PGA Tour Enterprises, the new for-profit business of the PGA Tour. Whether the events go “into” the Tour may or may not be exactly the way it works. There are still plenty of unknowns.

For instance, LIV may go into PGA Tour Enterprises instead.

It’s a little harder to find real facts, but this much we know:

The latest press conference with Jay Monahan, PGA Tour Commissioner, at the microphone resulted in him saying, “When you look at where we are right now, we're in regular dialogue. We have the right people at the table with the right mindset.”

That was at the Tour Championship.

Prior to that, at The Players, he explained, “The structure is, PGA TOUR, Inc., the TOUR's 501(c)6, continues to stay in place, and the best way to look at that is that is all of our membership, eligibility, and most importantly, all of our competition related business. It sits right there." "PGA TOUR Enterprises takes all the commercial assets that have existed in the PGA TOUR and puts them in a new for-profit entity.”

It‘s clear from the Florida Division of Corporations page, which anyone can access, that the PGA Tour has more than one subsidiary, and more than one kind of company. It does not specifically tell us whether the PGA Tour, Inc., is over PGA Tour Enterprises, but that may be the case.  

Regardless, there are two separate entities set up and the boards are basically the same at present, with members of the PGA Tour and PGA Tour execs listed on PGA Tour, Inc., and with SSG members as well as PGA Tour Players and PGA Tour execs listed as board members of PGA Tour Enterprises. ( Several board members who resigned are still listed, but that will be fixed when the next annual filing takes place.)

Now, according to Bob Harig of Sports Illustrated, for their investment, PIF supposedly gets an 11% ownership.  

His report also noted that PIF would get two seats on the PGA Tour board, including one spot as chairman. Don’t panic. Ask which board and chairman of what? Those are important distinctions. 

Most likely it is two seats on the board of PGA Tour Enterprises, which is either a subsidiary of or a second company partially owned by the PGA Tour, which is the only part of the Tour that they could take a stake in as investors.  

People get the different parts of the PGA Tour confused all the time. PIF is not getting to own the actual tournament golf aspect of the PGA Tour. Not now. Not ever, although ever is a long time.

It’s like one guy owning the salt shaker and the other guy owning the pepper shaker. They are not going to be blended in the same container, but Tour players are going to be involved in both. PIF is going to be an investor with an 11 percent interest in PGA Tour Enterprises, just like SSG has invested.

The dollar amount, first of all, would make PIF an equal investor to SSG (Strategic Sports Group), the sports ownership group that already put up $1.5 billion for part ownership. SSG certainly would not agree to less influence than PIF has, but perhaps they have agreed to have a PIF representative serve as chair of PGA Tour Enterprises business first because there are a significant number of SSG members and PGA Tour players as well as the PGA Tour commissioner serving on the board. It’s probably part of the negotiation.

If the PIF has 11 percent and SSG has 11 percent, then the PGA Tour has 78 percent. 

Honestly, we are lacking in some basic facts here. We just don’t know how many of which will be on the new company board in the future. We only know what is there now, according to the most recent filing.

Regardless of the PIF investment and the SSG investment, should the PIF deal prove to be true, it will not interfere with the non-profit portions of the PGA Tour, according to what Tour execs have said in months past.

"Charity will always be a fundamental element to the PGA TOUR," Commissioner Monahan said at The Players last March."Nothing is changing on that front. It's important not only to our tournament organizations, it's important to our corporate partners and I think our players also. It's very important to them as they see the impact of being in these communities week-in and week-out."

Foreign Not For Profit Corporation
PGA TOUR, INC.

Foreign Limited Liability Company
PGA TOUR ENTERPRISES, LLC

The use of the word FOREIGN in this case means the company or corporation was incorporated in a state other than Florida. The PGA Tour was originally incorporated in Maryland, and PGA Tour Enterprises was incorporated in Delaware.