PGA Tour lands deal worth $3B
PEBBLE BEACH, Calif. — The PGA Tour is getting a $3 billion investment from Strategic Sports Group in a deal announced Wednesday that would give players access to more than $1.5 billion as equity owners in the new PGA Tour Enterprises.
The launch of PGA Tour Enterprises, with SSG as a minority partner, comes eight months after the PGA Tour signed a framework agreement with the Saudi backers of LIV Golf for a commercial venture, which ultimately led to private equity groups wanting to join.
The Public Investment Fund of Saudi Arabia is not part of the deal yet, though the tour said negotiations with the PIF are ongoing for it to also become a minority investor.
“The coolest thing about it is the players are now owners,” said Jordan Spieth, one of six players on the PGA Tour board. “So not only do they benefit with the tour, they now are equity owners so they want to push it themselves, they want to make the product better themselves. Not that they didn’t before, but you directly benefit from owning a piece.”
How much of a piece remained unclear. PGA Tour Commissioner Jay Monahan held a conference call with players from all its main tours (including the PGA Tour Champions and Korn Ferry Tour) on Wednesday morning that included Tiger Woods, whom the tour appointed to the board last summer at the players’ request.
“As the tour grows, we grow,” Woods told players, according to Golf.com, which obtained access to the call. “So the more we invest into the tour, the more we get the benefits of it, which has never been — it’s never happened in sports history. So we’re the first.”
Also uncertain is where this leaves the PIF.
The tour said its deal with SSG allows for a co-investment from the PIF, subject to regulatory approval.T
The PGA Tour plans several player meetings over the next month to work through details.
“By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the tour,” Monahan said in the announcement.
He said a partnership with SSG — a group comprised of American owners and executives of pro sports franchises — will “enhance our organization’s ability to make the sport more rewarding for players, tournaments, fans and partners.”
The unique equity program in golf would give some 200 players access $930,000 in initial grants. Starting next year, PGA Tour Enterprises would use $600,000 for recurring grants for future players.
While details of the equity ownership program were not announced, the initial grants would be based on career accomplishments, recent achievements and PGA Tour status. The grants would vest over time.
SSG is led by Fenway Sports Group and includes owners Marc Attanasio (Brewers), Arthur Blank (Falcons), Steven Cohen (Mets), Wyc Grousbeck (Celtics), Tom Werner and John Henry (Red Sox), and Marc Lasry (Bucks). Others in the group include Alec Scheiner, former Browns president and co-founder of Otro Capital.