Framework of PGA Tour-LIV golf deal released
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The PGA Tour will have a permanent controlling interest in the subsidiary’s board of directors, regardless of the Saudi investment.
PHOTO: REUTERS
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WASHINGTON – The framework of the merger agreement of the PGA Tour and Saudi-backed LIV Golf
The PGA Tour will have a permanent controlling interest in the subsidiary’s board of directors, regardless of the Saudi investment, the framework says.
“The framework outlines a future for professional golf under the PGA Tour’s leadership that benefits players, fans and the sport,” a PGA Tour spokesman said.
“Any resulting agreement will have to be approved by the full board of the PGA Tour, including our player directors.”
The PGA Tour and the DP World Tour had been involved in a bitter fight with the rival LIV circuit, which is backed by Saudi Arabia’s Public Investment Fund (PIF). The parties earlier in June announced an agreement to merge and form one unified commercial entity.
The framework agreement also ends litigation between the two sides, while the future of LIV Golf will now be determined by the PGA Tour.
The US Department of Justice and the US Congress both plan to scrutinise the agreement.
Little was known of the deal until Monday, when multiple outlets reported that the sides sent a six-page document – and other information and paperwork – to the US Senate Permanent Subcommittee on Investigations.
According to the reports, among the items in the document relating to the new subsidiary are:
The executive board members are set to be PGA Tour commissioner Jay Monahan (currently on medical leave from his job), PIF governor Yasir Al-Rumayyan and PGA Tour board members Ed Herlihy and Jimmy Dunne.
A “communications committee” will “facilitate a smooth business transition” and “coordinate and manage communications” between the PGA Tour, LIV and PIF.
As a “premier corporate sponsor” of the PGA Tour, DP World Tour and other golf circuits, PIF will take on title sponsorship of one event or more.
Valuations of all of the parties’ assets will determine the amount of PIF’s initial investment, which has previously been reported to be in the US$2 billion (S$2.7 billion) to US$3 billion range.
PIF will contribute its golf-related investments and assets, including LIV, to (new entity) NewCo along with a cash investment, in exchange for the issuance to PIF of an equity ownership interest in NewCo at a fair value mutually agreed by the parties.
Players who jumped from the PGA Tour to LIV will be allowed to return as soon as 2024, but returning could be subject “to each Tour’s disciplinary policies”. In other words, players might face some sort of sanction.
The framework is likely to be a focus of a US Senate panel on July 11 when Monahan, Al-Rumayyan and LIV Golf chief executive officer Greg Norman have been invited to testify.
The proposed deal has faced intense criticism in Washington.
US Senator Richard Blumenthal has asked the PGA and LIV Golf for communications and records on their planned merger, citing concerns about the Saudi government’s role
