The PGA Tour and LIV Golf, the insurgent league bankrolled by billions of dollars from Saudi Arabia's sovereign wealth fund, said on Tuesday that they had agreed to a merger, ending a bitter and costly fight for supremacy of men's professional golf that had divided top players, everyday fans and corporate sponsors.
The merger represented the most stunning success to date of Saudi Arabia's ambition to become a player in global sports. Yet unlike its purchase of a Premier League soccer team or its sponsorship of events as diverse as boxing cards and Formula 1 auto races, its billion-dollar play for control of golf seemed from the start like nothing less than an attempt to seize control of an entire sport — one that in the United States has occupied a rarefied place in the sports firmament for more than a century.
LIV Golf had sparked a crisis for the PGA Tour, which has scrambled to reinvent its economic model as it has watched some of its biggest stars switch circuits. But LIV itself has also been a target of fierce criticism, immense skepticism and bitter litigation. Although much about the circuit's operations remains unclear — many documents that would reveal details are under court seal — some information about its structure and its operations has emerged in legal filings, interviews, business records and internal documents reviewed by The New York Times. And some LIV critics contend that the sovereign wealth fund is using sports to distract from Saudi Arabia's record of human rights abuses.
Now, by merging with the PGA Tour, LIV Golf has gained a foothold that guarantees it outsize influence in the game's future after a long struggle to break through, especially in the United States, where the PGA Tour has long dominated men's professional golf. The governor of the Saudi state entity bankrolling LIV, the Public Investment Fund, will become chairman of the new golf organization, which was created so quickly that it was announced before it even had a name.
Here are a few other notable parts of the deal:
*The Public Investment Fund also will have right of first refusal on new investments in the merged tour, according to the statement announcing the merger. That leaves open the possibility for Saudi Arabia to take more ownership of the sport in the future should the tour need to raise more capital.
*In a joint statement on Tuesday, the wealth fund and the PGA Tour said the former rivals would "implement a plan to grow these combined commercial businesses, drive greater fan engagement and accelerate growth initiatives already underway."
*Under the terms of the tentative agreement, the Public Investment Fund will at first be the exclusive investor in the blended operation, along with the established tours, which includes the DP World Tour, and LIV. Jay Monahan, the PGA Tour commissioner, is expected to be the new group's chief executive, with Yasir al-Rumayyan, the wealth fund's governor, installed as its chairman.
The merger establishes an unusual structure for how golf will be governed going forward.
The PGA Tour, which is a nonprofit organization, will remain that way and retain oversight over the "sanctioning of events and administration of the competition and rules" for the tour, according to the release announcing the merger. Basically, the PGA Tour will still have full control over how its tournaments are played.
But all of the PGA Tour's commercial businesses and rights — such as the rights to televise its tournaments, which garner hundreds of millions of dollars annually — will be owned by a new, as-of-yet unnamed for-profit entity.
That entity will also own LIV Golf as well as the commercial and business rights of the PGA European Tour, known as the DP World Tour.
The board of directors for the new for-profit entity will be chaired by Yasir al-Rumayyan, the governor of the Saudi sovereign wealth fund, the Public Investment Fund, who also oversees LIV. Three other members of the board's executive committee will be current members of the PGA Tour's board, and the tour will appoint the majority of the board and hold a majority voting interest.
With the PGA Tour controlling the for-profit holding company and remaining in charge of administering its own tournaments, it may seem as though the PGA Tour will forever remain the dominant voice in men's professional golf. But that could change.
The Public Investment Fund will invest "billions," according to al-Rumayyan, into the new for-profit entity, and it will also hold "the exclusive right to further invest in the new entity, including a right of first refusal on any capital that may be invested in the new entity, including into the PGA Tour, LIV Golf and DP World Tour," according to the release.
If the Public Investment Fund invests more money — because the economy goes south and sponsors pull out of tournaments, for instance — in the for-profit entity, it will surely demand more board seats and greater voting rights, potentially tilting control of men's professional golf toward Saudi Arabia.