A filing describing the merger of the PGA Tour with Saudi-backed LIV Golf shows the deal’s broad outlines, but also how much of the biggest union in golf history still needs to be worked out.
The five-page provisional agreement, filed to US lawmakers and reviewed by Bloomberg News, was provided ahead of a July 11 hearing by a Senate panel investigating the merger. It discloses new details about the understanding between the two golf circuits but leaves out fundamental financial provisions of the merger, as they seek to value their respective assets.
The US golf circuit will maintain a controlling voting interest in the new entity. PGA Tour Chairman Jay Monahan will be chief executive officer, while the governor of Saudi Arabia’s Public Investment Fund, Yasir Al-Rumayyan, will head the board, according to the filing.
PIF will pitch in golf assets, including those of LIV Golf, along with a cash investment in exchange for equity ownership in the entity dubbed NewCo in the framework agreement. The fund will pump in additional money with a right of first refusal on capital raised by NewCo.
Rough Framework
The merger, which blindsided golfers and fans when it was announced June 6, is far from a done deal. For one thing, the deal will need to pass antitrust scrutiny. The provisional agreement will end as soon as the circuits agree on definitive financial terms, or on Dec. 31 if they fail to do so, according to the framework.
Read More: PGA Golfers Are Now Told to Love LIV After Forgoing Its Millions
The PGA Tour and Europe’s DP World Tour, which is also part of the global deal with LIV Golf, will contribute their commercial rights, including contracts with players in the pro golf business, but not certain non-operational assets such as corporate reserves and golfer retirement plans, according to the agreement.
“The framework outlines a future for professional golf under the PGA Tour’s leadership that benefits players, fans, and the sport,” a PGA Tour spokesperson said. “Any resulting agreement will have to be approved by the full board of the PGA Tour, including our player directors.”
Representatives of PIF and the DP World Tour didn’t immediately respond to requests for comment outside regular business hours.
Golf Tumult, Court Battle
LIV Golf’s emergence in pro golf last year prompted high-ranking and veteran players like Phil Mickelson and Bryson Dechambeau to switch to the Saudi-funded league that offered them lucrative deals. The PGA Tour responded by suspending the LIV players. The battle between the circuits splintered the world of pro golf and led to a heated antitrust court fight that was dropped when the deal was announced.
In terms of player rights, the agreement says the new entity will set in motion “a fair and objective process” for any players who seek to return to the PGA Tour and DP World Tour after the 2023 tournament season ends. The accord calls for the combined circuit to do its best to secure Official World Golf Rankings — a rating system for golfers — for LIV golfers and events that are excluded from it.
The agreement says the new entity’s executive committee will include Monahan, Al-Rumayyan, PGA board Chairman Ed Herlihy and PGA board member Jimmy Dunne.
PIF will also invest to become a premier corporate sponsor of the PGA Tour and DP World Tour and will have a representative — the first being Al-Rumayyan — mutually picked by PIF and the Tour, on the US circuit’s policy board, according to the agreement. The PGA Tour’s policy board members include former AT&T Chairman Randall Stephenson and golfers Rory Mcllroy and Patrick Cantlay.
Senate panel chairman Richard Blumenthal, a Connecticut Democrat, last week asked Monahan and executives of PIF and LIV Golf to testify. Such invitations often make way for subpoenas and it’s unclear whether the executives have agreed to show up for questioning.