MIAMI – The PGA Tour’s new for-profit entity will dish out over 80 per cent of the initial US$930 million (S$1.25 billion) of player equity grants to its top-36 golfers, according to a leaked memo reported by United States media on Feb 7.

ESPN and Golf Digest both reported the contents of the memo from PGA Tour commissioner Jay Monahan, which had been distributed to players.

In January, the tour announced a deal that could eventually be worth up to US$3 billion with a group of billionaire sports team owners to create a new entity called PGA Tour Enterprises. The move comes after the PGA Tour lost several top stars to the breakaway LIV Golf circuit, backed heavily by Saudi Arabia’s Public Investment Fund (PIF).

Under the new programme, players would collectively access more than US$1.5 billion in grants, with Strategic Sports Group (SSG) investing an initial US$1.5 billion and the possibility of pumping in another US$1.5 billion later.

In the memo, Monahan said that US$930 million of initial player equity grants would be handed to 193 PGA Tour members.

A total of US$750 million of that amount would go to the top-36 players based on career performance, including results over the past five years and their position in the Player Impact Programme (PIP), which ranks how much a player is deemed to have impacted tickets, sponsorships, media consumption and fan engagement.

There are four groupings of players outlined in the memo, with Group 2 made up of 64 players who will share US$75 million based on performance over the last three years.

Group 3 includes 57 players dividing US$30 million in equity, having earned certain fully exempt PGA Tour status categories. The final grant would go to 36 players who “were instrumental to building the modern PGA Tour, based on career performance”.

“All initial grants will vest over time and will require minimum participation (playing 15 or more events on the PGA Tour) and/or service requirements commensurate with the value of the grant”, the memo stated.

According to the note, the tour will also award “recurring player equity grant”, which will be incremental to the initial sums and will be worth an aggregate amount of US$600 million. Those grants will be awarded in US$100 million totals each year, beginning in 2025 and till at least the 2030 season.

“These recurring grants will reward future top performers and will be based on last three-year performance, last year performance and PIP results,” PGA Tour commissioner Monahan said in the memo.

The SSG includes Fenway Sports Group, owners of English football’s Liverpool, Major League Baseball’s (MLB) Boston Red Sox and the National Hockey League’s Pittsburgh Penguins, plus MLB’s New York Mets owner Steven Cohen, National Football League’s Atlanta Falcons and Major League Soccer’s Atlanta United owner Arthur Blank.

The new company has yet to be created, however, but Monahan said he hopes that legal and regulatory matters will be resolved before March. The PGA Tour remains in merger talks with PIF and it is unclear how the new structure would operate should such talks succeed.

LIV has continued to attract top players, with reigning Masters champion Jon Rahm signing up in December for a deal reportedly worth between US$300 million and US$600 million.

In the latest development of the US Senate committee investigation into the possibility of a PGA Tour merger with LIV, bankers and consultants who advise PIF have testified that they face “criminal and financial penalties” if they cooperate with the probe.

According to a report by Bloomberg News, the PIF sued its advisers in a Saudi court last November preventing them from sharing information with the US Senate committee on homeland security and governmental affairs.

In Washington this week, banker Michael Klein and representatives of consulting firms McKinsey, Boston Consulting Group (BCG) and Teneo faced lawmakers and pleaded their case for not cooperating.

“The PIF has been explicit that the disclosure of information relating to BCG’s work for PIF is a violation of Saudi law, which ‘imposes criminal penalties for disclosing or disseminating such information including imprisonment for a maximum of 20 years’,” BCG’s Rich Lesser said in prepared testimony.

“We risk criminal and financial penalties for the firm and for individuals working or living in Saudi Arabia.”

That includes 20-year prison sentences for executives and staff working in Saudi Arabia, Klein said.

“This represents aberrant behaviour for a client, and, quite frankly, for the PIF, who has historically been a client that has operated with best practices of governance with us,” Klein said at a hearing.

The executives added that they are fighting the PIF’s lawsuit, Bloomberg reported. They claimed they are attempting to reduce the number of redactions in their documents submitted to the Senate panel. Most of BCG’s 91-page document submission, for example, were calendar invitations with every attendee’s name redacted.

In a statement to Bloomberg, the PIF said it was making “significant efforts to facilitate the production of requested information from our advisers consistent with the laws of Saudi Arabia, which should be recognised like those of any other country.” AFP, REUTERS