SSG Antes Up in the High Stakes PGA Tour Ownership Game

It is a business version of chicken or as any kid would say in a contest with a rival, put up or shut up.

The first investment sum of $1.5 billion was closed on January 31st. Think of it as Phase One. Another $1.5 billion, for a total of $3 billion, remains available for investing in PGA Tour Enterprises in the future.

Now, to have equal status with SSG, PIF will need to plunk down $3 billion big ones.
Interestingly, any participation by the PIF (Saudis), according to the statement, is welcomed by the PGA Tour but “subject to regulatory approvals.” That means the U.S. government has to approve it or at least not object to it.

While the statement from the Tour was still somewhat vague on details, it did indicate, broadly, which PGA Tour players would be able to be “equity holders ( think stockholders, i.e. owners)” in the new organization.

What we don’t know is what is in PGA Tour enterprises. Is it the PGA Tour as it exists today or is it new stuff? New programs? New contests? We will have to wait to see.

Who gets a piece of the pie?

Approximately 200 PGA Tour members will be able to participate in the sharing of ownership. The amount of ownership will be determined by “career accomplishments, recent achievements, future participation and services, and PGA TOUR membership status.”

Translation part 1: If players left the PGA Tour and make no effort to return, they don’t get any of this. In other words, Phil Mickelson just missed a big future payday, and Tiger Woods is guaranteed another future big bag of money.

Translation part 2: If players want to collect the big bucks from this deal, they are going to have to participate in a variety of tournaments and who knows what else. In other words, it’s going to be more involved than just showing up 15 times a year playing golf and asking where the courtesy car is.

If they are owners, they are going to have to act like owners, act like they care how the company is run, care about who buys tickets, and how everybody is treated.

“By making PGA TOUR members owners of their league, we strengthen the collective investment of our players in the success of the PGA TOUR,” Commissioner Jay Monahan said in a statement.

That may be the most important part of the deal. It may be the cog that has been missing from the PGA Tour up to the present now. But maybe it wasn’t needed until now.

The Player Directors, Patrick Cantlay, Peter Malnati, Adam Scott, Webb Simpson, Jordan Spieth, and Tiger Woods, issued a joint statement saying: “We were proud to vote in unanimous support of this historic partnership between PGA TOUR Enterprises and 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.”

Just who is SSG?

SSG is Strategic Sports Group. The PGA Tour provided a list of the investors:

• Fenway Sports Group which owns Boston Red Sox, Liverpool F.C., Pittsburgh Penguins, RFK Racing, and Boston Common Golf and includes
• John W. Henry, Principal, Fenway Sports Group
• Tom Werner, Chairman, Fenway Sports Group
• Mike Gordon, President, Fenway Sports Group
• Sam Kennedy, CEO & President, Boston Red Sox; Partner, Fenway Sports Group
• Steven A. Cohen, Owner, Chairman & CEO, New York Mets; Chairman & CEO, Point72; Owner, TGL New York
• Andrew B. Cohen, Chief Investment Officer and Co-Founder of Cohen Private Ventures; Vice Chairman, New York Mets
• Arthur M. Blank, Co-Founder, Home Depot; Owner and Chairman, AMB Sports and Entertainment which includes the Atlanta Falcons, Atlanta United, Mercedes-Benz Stadium, Atlanta Drive GC, PGA TOUR Superstore
• Mark Attanasio, Principal, Milwaukee Brewers and Norwich City; Founder & Managing Partner, Crescent Capital Group
• Wyc Grousbeck, Co-Founder, Causeway Media Partners; Lead Owner, Boston Celtics
• Avenue Sports Fund, led by Avenue Capital Group CEO Marc Lasry, Owner, TGL San Francisco; Former Principal, Milwaukee Bucks
• Linda Henry, Co-Owner & CEO, Boston Globe Media; Investor, WNBA and League One Volleyball; Partner, Fenway Sports Group
• Alec Scheiner, Co-Founder and Partner, Otro Capital

These people are fairly heavy hitters. They aren’t Warren Buffett ( Berkshire Hathaway), Bill Gates (Microsoft), or Larry Ellison (Oracle), but they own big parts of the sports economy in the US.

Other investors include: Main Street Advisors including LeBron James, Maverick Carter and Paul Wachter; Herb Wagner; Henry McCance; William Alfond; Michael Egan; Tom DiBenedetto; Michael Pucker; Richard Warke; Mitchell Jacobson; Frank Resnek; Laura Trust; and Teddy Werner.

Now, of conversational interest is that Monahan once worked for Fenway Sports Group and Rory McIlroy’s TGL Team is owned by Fenway Sports Group, and there are other TGL owners who are Friends of Tiger and/ or Friends of the Tour.

What does it mean for the non-top-stars of the PGA Tour? Anybody not named Tiger or Rory should definitely put in a call to Ponte Vedra and ask what they can do for the PGA Tour, starting now.

In the future, it looks like it’s not just the scores that will merit cash today, but contributions to the organization that will score ownership shares and future power.

One thing is certain, this is about to get really interesting!