PGA Tour considers US investors to quell LIV Golf deal worries
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The PGA had received unsolicited interest from investors and it has a responsibility to its members, sponsors and fans to evaluate opportunities.
PHOTO: AFP
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NEW YORK – High-profile United States investors are being considered to help finance the PGA Tour’s merger with Saudi-backed LIV Golf in an effort to ease political opposition to the deal.
The PGA said it had received unsolicited interest from investors
The inclusion of outside investors could help appease politicians who have voiced concerns that the deal would amount to a takeover of a US institution by LIV Golf, a rival venture financed by Saudi Arabia’s sovereign wealth fund, said people familiar with the matter.
This is despite assurances by PGA representatives in July that the kingdom’s Public Investment Fund (PIF) would be only a minority investor in the combined entity.
The deal is still a long way from completion, with the sides yet to agree to financial terms and make further concessions to address regulatory concerns.
In its latest update, the PGA said negotiations with the PIF and the European DP World Tour are progressing with a goal of reaching a definitive agreement by Dec 31.
“Throughout 2023, the PGA Tour has demonstrated its strength, reach and value as an enterprise,” it said. “Our focus continues to be on finalising an agreement with the Public Investment Fund and the DP World Tour, however, our negotiations have resulted in unsolicited interest from other investors.”
Any investment would be made through PGA Tour Enterprises, a subsidiary that the PGA Tour would permanently control through majority board representation, according to its statement.
Representatives for LIV Golf and the PIF were unavailable for comment. Any deal with LIV Golf and any outside investor would also need the backing of PGA players, who were left furious after they were not consulted about the merger. Former world No. 1 Tiger Woods recently joined the influential PGA policy board, giving the players a one-seat advantage.
A nearly year-long antitrust court feud between the PGA and LIV Golf was dropped following the surprise announcement in June that the two rivals – along with the European Tour – would combine their golf-related business and rights in a new entity.
As part of the agreement, the PIF is prepared to invest billions of new capital in the combined venture. The governor of the PIF, Yasir Al-Rumayyan, is slated to be the new entity’s chairman.
PGA chief operating officer Ron Price told lawmakers at a Senate hearing in July that the PIF will invest “a significant amount – north of US$1 billion (S$1.37 billion)” after the deal is finalised.
PGA commissioner Jay Monahan said in August that the PGA was not considering any outside investors at that time.
It is unclear which investors might potentially back the new venture but, in the wake of the Covid-19 pandemic, sports has emerged as one of the few forms of live entertainment guaranteed to attract viewers.
Saudi Crown Prince Mohammed bin Salman has made sports a key plank of diversifying his country’s economy from oil, and the kingdom has spent billions of dollars to support that effort. BLOOMBERG
