Tue, Jun 6, 2023 7:30 PM
By DOUG FERGUSON, AP Golf Writer
The PGA Tour abruptly dropped its expensive fight with Saudi Arabia’s LIV Golf venture on Tuesday and instead announced a stunning merger that creates a global operation featuring the world’s top players backed by the Saudis' massive wealth.
As part of the deal merging the PGA Tour and European tour with Saudi Arabia's golf interests, the sides immediately are dropping all lawsuits involving LIV Golf.
From the golf side, still to be determined is how players like Brooks Koepka and Dustin Johnson can rejoin the PGA Tour after defecting last year for signing bonuses reported to be in the $150 million range.
From the commercial side, the governor of Saudi Arabia's sovereign wealth fund joins the PGA Tour board of directors and leads the new business venture as chairman, though the PGA Tour will have a majority stake.
News of the deal came as a surprise to many watchers of the lawsuits and Saudi Arabia’s inroads into U.S. politics, sports and culture.
“This is a huge development and obviously upends a world of golf, which has been perhaps more tradition-bound in the past,” said Kristian Ulrichsen, a Middle East fellow at Houston’s Baker Institute.
Under Crown Prince Mohammed bin Salman, Saudi Arabia’s sovereign wealth fund has made a point of seeking out investments, like LIV, where it could shake up existing industries, Ulrichsen said.
“That’s sort of one of their mantras, is to try to be disruptive and to take on the status quo,” he said. “And in this case, they seem to have succeeded.”
The announcement comes a year after LIV Golf began. PGA Tour Commissioner Jay Monahan was at the Canadian Open that week and said pointedly about any player who joined LIV or was thinking about it: “Have you ever had to apologize for being a member of the PGA Tour?”
Now they are partners, giving Saudi Arabia a commercial voice in golf’s premier organization.
“I recognize everything I’ve said in the past. I recognize people will call me a hypocrite," Monahan said in a conference call Tuesday evening. "Any time I’ve said anything, I’ve said it with the information I had, and I said it with someone trying to compete with our tour and our players.”
Most PGA Tour players were bewildered by the shocking turnaround. It didn't help that a news outlet broke the embargoed announcement before Monahan could send a memo to the players. Most learned of the development on social media.
“I love finding out about morning news on Twitter,” two-time major champion Collin Morikawa tweeted.
Many were not happy. Wesley Bryan tweeted, “I feel betrayed, and will not ... be able to trust anyone within the corporate structure of the PGA Tour for a very long time.”
Byeong Hun An added on Twitter: “I’m guessing the liv teams were struggling to get sponsors and pga tour couldn’t turn down the money. Win-win for both tours but it’s a big lose for who defended the tour for last two years.”
“They were going down their path, we were going down ours, and after a lot of introspection you realize all this tension in the game is not a good thing,” Monahan said in a phone interview with The Associated Press.
“We have a responsibility to our tour and to the game, and we felt like the time was right to have that conversation.”
Monahan held a player meeting at the Canadian Open, though most top players are not there. He described the meeting as “intense, certainly heated.”
And while this likely will only lead to greater riches in golf, there still was explaining to do on why the tour would merge with a group that tried to take away some of the PGA Tour's best players and was seen as the latest example of “sportswashing.”
The deal was in the works for the last seven weeks, when Monahan first met with Yasir Al-Rumayyan, governor of the Public Investment Fund. Players typically approve changes to the schedule and other competition matters. On this one, they were left out.
“No one had word of this,” Monahan said. “Our players expect us to operate in the best interests of the tour.”
Instead, he cited guidance from corporate members of the PGA Tour board.
Still, Monahan has his toughest work ahead of him.
He sought loyalty from his players against a league accused of taking part in sportswashing, an attempt by Saudi Arabia to shift focus away from its human rights abuses, such as the 2018 killing of journalist Jamal Khashoggi.
Now the very group that posed such a threat is the commercial partner of the PGA Tour and European tour.
“The divisiveness is now over, and two years of disruption and distractions ... is over and now we can concentrate on building our respective tours,” said Keith Pelley, CEO of the European tour. “And we are building it with PIF, who is clearly committed to the game.”
Along the way, PGA Tour players also got rich. The tour raised prize money at elite events to $20 million, the same purse for LIV’s individual competition. The 2024 schedule has been reshaped for roughly 16 tournaments like that.
“In the short term, I expect a lot of questions and criticism,” Monahan said. “In the long run, players who stayed with the PGA Tour will see they benefited in many ways.”
The agreement combines the Public Investment Fund's golf-related commercial businesses and rights — including LIV Golf — with those of the PGA and European tours. The new entity has not been named.
Al-Rumayyan will join the board of the PGA Tour, which continues to operates its tournaments. The PIF will invest in the commercial venture.
“From the very beginning, the whole initiative was how to grow the game of golf,” Al-Rumayyan said. “And I think what was achieved today was exactly that.”
Augusta National and the Royal & Ancient welcomed the news because it ends a bitter feud. Augusta National said the deal “represents a positive development in bringing harmony to men's professional golf.” R&A CEO Martin Slumbers said it would help golf “move forward in a collaborative, constructive and innovative fashion.”
As for the new role of Greg Norman, Al-Rumayyan said only that Norman is LIV Golf's commissioner and details of his future role would be announced in the coming weeks.
Monahan's memo to players indicated a strong Saudi Arabian presence. He said PIF would make a financial investment to become a “premier corporate sponsor” of the PGA Tour, the European tour and other international tours.
The PIF initially will be the exclusive investor in the new entity and will have the exclusive right to further invest, including a right of first refusal on any capital that may be invested.
Al-Rumayyan has been spotted wearing a “MAGA” hat during LIV events at courses owned by former President Donald Trump.
Trump predicted last July that a merger was inevitable and said anyone not signing with the Saudi league would be losing out. He weighed in Tuesday and called it a “glamorous deal for the wonderful world of golf.”
Monahan said the merger came together the last seven weeks, with PGA Tour board member Jimmy Dunne responsible for bringing together Monahan and Al-Rumayyan. Dunne and Ed Herlihy, chairman of the PGA Tour's board, will serve on the board of the commercial venture.
The concern for PIF was whether its leaders could be deposed, which Saudi Arabia wanted to avoid. Being open to depositions would leave the kingdom's leaders more vulnerable to legal action, including lawsuits demanding they reveal business deals in the United States.
A federal judge had ruled the PIF could not claim immunity from the Foreign Service Immunity Act because of its commercial work with LIV Golf in the U.S.
The PIF appealed the ruling to the Ninth U.S. Circuit Court of Appeals, which was likely to extend the lawsuit deep into 2024 if not longer.
Associated Press writer Ellen Knickmeyer in Washington and AP Sports Writer Steve Douglas in Stockholm contributed to this report.
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