The PGA Tour, LIV Golf and DP World Tour, Europe’s main golf circuit, have reached an agreement to merge their commercial interests into one single, for-profit global golf entity, according to an announcement Tuesday morning.
The partnership is a massive restructuring for the sport, which has been torn apart over the past few years as LIV Golf, backed by Saudi Arabia’s Public Investment Fund, muscled its way onto the scene, offering huge contracts to players who were pressured to declare allegiances.
The tie-up will end all pending litigation between the parties, the three groups said in a statement, but it will also inextricably link the PGA Tour and DP World Tour to the Saudi money that made LIV Golf so controversial in the first place. PIF will be investing more money into the venture, according to the announcement, and it will be the entity’s exclusive outside backer, with right of first refusal on any capital into the new entity or any of its three members.
The PGA Tour, however, will consolidate a lot of the power. A new board of directors will oversee the new entity’s commercial operations, businesses and investments, and the PGA Tour will appoint a majority of that board. It will also have a majority of the voting interest.
“After two years of disruption and distraction, this is a historic day for the game we all know and love,” PGA Tour commissioner Jay Monahan said in a statement. “This transformational partnership recognizes the immeasurable strength of the PGA Tour’s history, legacy and pro-competitive model and combines with it the DP World Tour and LIV—including the team golf concept—to create an organization that will benefit golf’s players, commercial and charitable partners and fans.”
The merger, if it closes, will likely create tough choices for players, fans and sponsors who previously criticized LIV Golf for its ties to the Saudi Arabian state, one of a number of countries accused of investing in sports as a way of diverting attention from human rights abuses and links to global terrorism. Golf is not the only sport dealing with Saudi sportswashing—earlier this week, PIF announced its plans to take over Saudi Arabia’s four largest soccer teams as those clubs extend massive contract offers to some of the sport’s most popular players.
The announcement of the new golf entity will have continuous downstream effects across all of golf, not just its professional ranks. In the hour after the merger was announced, golf companies Acushnet (NYSE: GOLF) and Topgolf Callaway (NYSE: MODG) jumped at least 5%.
Tuesday’s news is light on details about what this new, still-unnamed entity means specifically for the sport’s calendar, its athletes and its fans. Many of golf’s biggest stars who accepted large contracts from LIV were on the outs with the more established tours. However the three entities said Tuesday that they will work to determine “fair criteria” for the “re-admission” of those golfers.
The announcement also says that the PGA Tour will remain a 501c3 tax exempt organization that will retain administrative oversight of the current PGA Tour events. The DP World Tour and LIV Golf will also retain oversight of their own events.
The board of directors of this new commercial entity will be chaired by PIF Governor Yasir Al-Rumayyan, with Monahan serving as CEO. There will also be an executive committee comprised of Al-Rumayyan, Monahan and PGA Tour policy board member Jimmy Dunne.
This week marks one year since LIV Golf held its debut event at the Centurion Club near London. The new tour has already been a boon for the pocketbook of players across the sport. The PIF-funded tour handed out massive signing bonuses to attract stars, including a reported $200 million for Phil Mickelson and $125 million for Dustin Johnson. The upfront paycheck pushed Mickelson’s career earnings north of $1 billion.
The eight LIV no-cut events last year had total prize money of $255 million. Johnson topped the LIV prize money list with $35.6 million, including bonuses. In 2023, the 14 events were scheduled to pay $405 million.
The PGA Tour responded to the LIV threat by boosting its own purses and bonus programs to stop the exodus of golfers. This year, it established 13 “elevated” events that feature increased prize money totaling $315 million, up 47% from 2022. The PGA Tour’s total purse for the year is expected to top $560 million, an increase of $140 million.
The Tour’s Player Impact Program began in 2021 as a way to funnel more money to top player who bring attention to the sport. It paid out $40 million during the first year and jumped to $100 million for 2022. Tiger Woods headed the ranking both years, earning a combined $23 million. Five LIV golfers finished in the top 20 at last month’s PGA Championship, including winner Brooks Koepka.
This story has been updated throughout.
