The PGA Tour has finalized an agreement with the Strategic Sports Group that will infuse up to $3 billion into the Tour’s new for-profit entity, PGA Tour Enterprises.
SSG’s landmark deal to become a minority investor in PGA Tour Enterprises was announced Wednesday morning in a 30-minute conference call from commissioner Jay Monahan to members of the PGA Tour, Korn Ferry Tour and PGA Tour Champions.
“This is a monumental day for our organization,” Monahan told players.
In a historic aspect of the agreement, nearly 200 PGA Tour players will have access to more than $1.5 billion in equity in this new venture. The initial grants, available to qualified Tour members, would vest over time and be based on a tiered system that takes into account a player’s recent and career achievements. It represents a significant shift in how the Tour has typically rewarded performance through prize money and bonus programs.
Members of the PGA Tour policy board, who signed off on the deal, said this unprecedented arrangement encourages the players to be fully invested in their product and aligns the interests of the competitors, management and investors.
According to a source, Tiger Woods, who was named last year as a player director on the policy board, told players that, “As the Tour grows, we grow. The more we invest into the Tour, the more we get the benefits of it.”
Fellow player director Peter Malnati followed Woods on the call, according to a source, and said that although he was “exhausted” by the process, he was “energized by what’s to come.”
Monahan told players that part of SSG’s initial $1.5 billion investment to fuel growth will be used toward areas such as the Tour’s digital platforms, data programs, DP World Tour, the Tour’s international presence and other investment opportunities, according to a source.
The agreement with the U.S.-based investors is separate from the negotiations that are ongoing between the Tour, DP World Tour and Saudi Public Investment Fund. The Dec. 31 deadline that was outlined in the initial framework agreement was extended into this year, and SSG has consented to a co-investment with the PIF in the future.
On the call, Monahan described the negotiations with the PIF as “active” and “frequent,” according to a source. Monahan was in Saudi Arabia earlier this month to meet in person with PIF governor Yasir Al-Rumayyan.
The Tour announced last December that, after receiving more than two dozen investment bids, it was entering the final stages of negotiations with SSG, a consortium led by Fenway Sports Group that also included notable billionaire sports team owners such as Arthur Blank and Steve Cohen. Combined, the investment group boasts more than 200 years of experience in sports and entertainment.
As part of the new structure of PGA Tour Enterprises, there will be a 13-person board: seven players; four representatives from SSG, an independent director from the PGA Tour policy board; and the current commissioner of the PGA Tour.
