PGA Tour to weigh outside investors as talks over Saudi tie-up continue

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The PGA Tour has begun a formal process to review outside investments separate from its negotiations over a deal with Saudi Arabia’s Public Investment Fund, as the US-based professional golf organisation evaluates options to unify and commercialise the men’s sport around the world.

Allen & Co, the PGA Tour’s investment banker, formally opened the bid process starting last Friday. Interested potential investors include Endeavor, Fenway Sports Group and a consortium of private investors that includes the billionaire Henry Kravis.

The tour shocked the sports world in June by announcing it had reached a “framework agreement” with PIF and the Europe-based DP World Tour to halt civil litigation between the US circuit and the breakaway LIV Golf League, which launched in 2022 with billions of dollars in funding from the Saudi sovereign wealth fund.

The PGA Tour is expected to evaluate bids that contemplate both replacing the mooted PIF investment as well as structures where bidders partner alongside Saudi Arabia.

“We remain focused on reaching a definitive agreement with PIF and the DP World Tour, but not surprisingly, these negotiations have resulted in unsolicited outreach and proposals from a number of other interested investors,” PGA Tour commissioner Jay Monahan wrote in a memo seen by the Financial Times.

“All of this activity reinforces the tour’s strong position and our potential for growth,” he added.

The framework agreement envisioned an umbrella organisation beneath which the PGA Tour would function alongside LIV Golf. The PGA Tour is to hold a majority controlling interest in the new vehicle, with PIF to make a cash investment estimated in the billions of dollars for a minority stake.

In June, Monahan and the PIF head Yasir Al-Rumayyan, had said a final definitive agreement could be reached within weeks after the sides agreed to a valuation of the golf assets contributed to what it called “NewCo”.

Terms of the framework agreement between the PGA Tour, DP World Tour, and the PIF stipulate the parties have until December 31 to reach a deal, said people familiar with the matter. The Tour is guiding for a soft deadline of December for outside investor bids, one of the people said, in hopes of reaching a decision that month.

PGA Tour players, who were not informed about the negotiations with PIF before the announcement, have been separately organising themselves to understand potential deal terms.

The players are working with Colin Neville, an executive at Raine Group, the merchant bank that has been active in sports and golf. The PGA Tour policy board, whose majority is now comprised of players including recent addition Tiger Woods, will have to approve any transaction.

Among the complexities to be hammered out is the future of PGA Tour players who defected to LIV Golf and what their path back to the PGA Tour may be. Several PGA Tour players have said loyalists should be rewarded for resisting the hundreds of millions in signing bonuses that defectors received from the Saudi wealth fund.

PIF and LIV Golf have insisted the LIV Golf circuit will continue and several LIV golfers have said they are not interested in returning to the PGA Tour. But LIV was dealt a blow earlier this week when the body that sets official player rankings declined to grant points to LIV tournaments.

The LIV tour is to play its penultimate tournament of the season this week in Jeddah, Saudi Arabia before its championship finals at Donald Trump’s Miami resort scheduled for late October.

The US PGA Tour in its public campaign and litigation to quash LIV had accused Saudi Arabia of attempting to take over professional golf in order to “sportwash” its checkered human rights record, a stance it has since quickly backed off of.

In July, longtime PGA Tour policy board member Randall Stephenson, the former chief executive of AT&T, resigned that position saying he had concerns about conducting business with the country which he said had been found accountable for the 2018 death of Saudi journalist Jamal Khashoggi.

The PGA Tour has insisted it will retain full operational and governance control over its tournaments, with PIF and any other financial backers merely providing cash.