December 1, 2023

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PGA Tour and LIV announce surprise merger to end bitter split

PGA Tour and LIV announce surprise merger to end bitter split
  • The PGA Tour calls the convention a “historic day” for golf
  • The deal ends litigation between the parties
  • PGA Tour players left their shock with a surprising announcement
  • The families of the 9/11 victims criticized the merger

June 6 (Reuters) – The golf world was stunned on Tuesday when the PGA Tour, DP World Tour and Saudi-backed rival circuit LIV, who have been embroiled in a bitter battle that has divided the sport, announced a surprise agreement. Merger and formation of one unified business entity.

In addition, the organizations said in a joint press release that they will work together to allow LIV Golf players to re-apply for membership on the PGA Tour and DP World Tour, formerly known as the European Tour, after the 2023 season.

The massive announcement has been criticized by many PGA Tour players who have been left in the dark about the merger and it comes after a public war of words between all parties, leading to rising tensions and a bitter legal battle.

How did we go from confrontation to being partners now?

PGA Tour Commissioner Guy Monahan

“After two years of disruption and distraction, this is a historic day for the game we all know and love,” said PGA Tour Commissioner Jay Monahan, who has long been an outspoken critic of LIV Golf.

“How did we go from confrontation to being partners now? We just realized we were better off together than we were fighting or apart,” he told reporters after an “intense” meeting with the golfers on tour to discuss the details of the deal.

No details were provided on how the agreement would affect the current competitive golf landscape, including eligibility for this year’s Ryder Cup, although the parties said they would work in the coming months to finalize the terms of the merger.

The LIV Golf series is funded by Saudi Arabia’s Public Investment Fund and critics have accused it of being a way for the country to try to improve its reputation in the face of criticism of its human rights record.

Much of the backlash centers around the Saudi government’s alleged involvement in numerous human rights abuses, including the killing of Washington Post journalist Jamal Khashoggi in 2018.

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A source familiar with the matter said the deal announced on Tuesday was a binding framework agreement, but the financial terms had not yet been disclosed.

The source added that Michael Klein & Co will conduct valuation work on LIV assets and Allen & Co will conduct valuation work on PGA Tour assets before determining the price at which the merger will occur.

The source said that the agreement includes a mechanism to resolve any disputes regarding the evaluation, without going into further details.

Exclusive investor

The announcement of the merger includes an agreement to end all litigation between the participating parties.

In addition, the Public Investment Fund (PIF) will make a capital investment in the new entity to facilitate its growth and success.

A person familiar with the matter said the Public Investment Fund, which owns more than 90% of LIV, plans to invest billions of dollars in order to acquire a significant minority stake in the combined company.

“Today is a very exciting day for this special game and the people it touches around the world,” said Yasser Al-Rumayyan, the fund’s governor.

“We are proud to partner with the PGA Tour to build on the unprecedented success of PIF and its proven track record of unlocking value and bringing innovation and global best practices to businesses and sectors around the world.”

Monahan said the agreement was in the best interests of PGA Tour members, though he described the closed-door meeting with the players, where some called for his resignation, as “extreme” and “heated.” [nL1N37Y3B0]

“It puts us in control and allows us to partner with the Public Investment Fund in a constructive and productive way,” Monahan said.

“I realize that people will call me a hypocrite.

“Anytime I said anything, I said it with the information I had at that moment… I accept those criticisms. But circumstances do change.”

Featuring 54-hole no-cut events rather than the traditional 72-hole format, LIV Golf launched in 2022 and has lured big-name players away from competitive circuits with massive amounts of prize money per golfer.

The Public Investment Fund will initially be the exclusive investor in the new entity and the board of directors will include Al-Rumayyan as President and Monahan of the PGA Tour as CEO.

After years of acrimony, the deal appears to have come together quickly with little fanfare and no leaks – despite being one of the biggest trade stories in sports history.

Al-Rumayyan told CNBC that he and Monahan met in London.

“We had lunch followed the next day by a round of golf and then another lunch. We had discussions and covered everything. I think it will take weeks (until a final deal is reached).”

Manahan added, “I give Yasir great credit for coming to the negotiating table, going into the discussions with an open heart and an open mind. We’ve done the same thing and golf is better for what we’ve done here today.”

The PGA Tour, a nonprofit organization, confirmed in July 2022 that the US Department of Justice was investigating whether it violated antitrust law in fighting LIV. Read more

The PGA has sought to ward off competition by banning its players from participating in the breakaway circuit.

However, one antitrust expert said a PGA/LIV deal would be approved and two others said contact with him is very soon.

“This is entertainment. I think that will make it less of a priority for antitrust enforcers,” said Seth Blum of Blum Strategy Adviser.

mixed reaction

Some of the more notable players to move to LIV Golf include Hall of Fame golfer Phil Mickelson, former world number one Dustin Johnson, PGA Championship winner Brooks Koepka and 2022 British Championship winner Cameron Smith.

“Wonderful day today,” tweeted Mickelson, whose public image suffered a hit in February 2022 when an author of an unauthorized bio published an excerpt from the book in which he called the Saudis “creepy” but said he was willing to step over their images. HR records to gain leverage with the PGA Tour.

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Some PGA Tour players have expressed surprise that they were not informed of the agreement prior to its announcement.

“I love discovering the morning news on Twitter,” wrote two-time main champion Colin Morikawa.

Former US President Donald Trump, who owns three courses that are part of LIV Golf’s 14-event schedule in 2023, celebrated the deal in a social post Truth with all hats on.

“Great news from LIV Golf. A great, beautiful and magical deal for the wonderful world of golf. Congratulations everyone!!!”

Since its launch, LIV players have only competed alongside former teammates in the major tournaments, as these four blue-rib events on the golf calendar are not run by the PGA Tour or DP World Tour but by independent organizations.

Many of those who accepted the lucrative signing bonuses to join LIV Golf cited the reason behind the jump as a desire to play fewer events and spend more time with their families.

Among the organizations denouncing the deal are the advocacy groups 9/11 United Families and Democracy in the Arab World Now, founded by Khashoggi.

Fifteen of the 19 kidnapped on September 11, 2001 were from Saudi Arabia. However, the kingdom has long denied any role in the attacks on the Twin Towers, which killed nearly 3,000 people.

“Last year’s 9/11 community was singled out by Jay Monahan in unequivocal agreement (Tour) that the Saudi LIV project was nothing more than a sporting wash of Saudi Arabia’s reputation,” Families United said in a statement.

“Now it appears that the PGA and Monahan have become just paid Saudi shillings, taking billions of dollars to clean up the Saudi reputation so that Americans and the world will forget how the kingdom spent billions of dollars before 9/11 to fund terrorism, spread their vitriolic hatred, fund al Qaeda and kill our loved ones.”

Reporting by Frank Bing in Toronto; Additional reporting by Diane Bartz, Greg Romiliotis, Jonathan Landay, Mitch Phillips and Rory Carroll; Editing by Alex Richardson, Christian Radnedge, Toby Davis and Peter Rutherford

Our standards: Thomson Reuters Trust Principles.