The PGA Tour is set to receive a massive influx of cash from a consortium of American sports owners.
The PGA Tour is on the precipice of landing a historic $3 billion investment from the Strategic Sports Group (SSG), according to reports from Bloomberg and The Wall Street Journal.
This initial investment is substantial not only for monetary reasons but also because it does not include the Saudi Public Investment Fund (PIF), LIV Golf’s beneficiary. Last June, the PGA Tour, the DP World Tour, and the PIF signed a framework agreement in which the parties would work towards a formal deal that would unite golf.
Yet, an agreement between golf’s key stakeholders remains in flux.
This deal between SSG and the PGA Tour does not include the PIF, yet Bloomberg reports that the SSG and the PGA Tour will continue to discuss how to include the Saudi Arabian sovereign wealth fund in the near future.
But Bloomberg also noted that any investment could change, depending on how discussions play out.
Nevertheless, the PGA Tour has seen LIV Golf poach its top talent, including Jon Rahm and, most recently, Tyrell Hatton, the 16th-ranked player in the world. Phil Mickelson, Brooks Koepka, Bryson DeChambeau, and other high-profile players have jumped to the Saudi-backed circuit, receiving large paydays for joining the breakaway league. Each LIV Golf event has $20 million purses, as players have opportunities to earn more cash through its team competitions.
/cdn.vox-cdn.com/uploads/chorus_asset/file/25255696/1798536960.jpg)
Photo by David Cannon/Getty Images
The PIF has over $700 billion in assets and has poured more than $2 billion into LIV Golf since its launch in 2022.
The PGA Tour responded to these actions by increasing its purse sizes and creating a lucrative Player Impact Program (PIP) that awards the most popular players. In doing so, the tour faced no choice but to squeeze out more capital from their corporate sponsors. The tour has since seen some partners walk away due to rising costs, including Honda and Wells Fargo—two longtime supporters.
But the tour cannot compete with a foreign sovereign wealth fund, let alone a country that helps power the world with its oil.
Hence, the PGA Tour entered into discussions with SSG this past fall, knowing it needed more capital to support its circuit. SSG includes Boston Red Sox and Liverpool F.C. owner John Henry, New York Mets owner Steve Cohen, Atlanta Falcons owner Arthur Blank, and Marc Lasry, CEO of the Avenue Capital Group. Lasry owned the Milwaukee Bucks from 2014 to 2023. SSG includes other billionaires as well.
On top of its substantial investment into the PGA Tour, SSG can help the tour reform its business model “to increase profitability and make even more money for its players,” per The Wall Street Journal.
Should its deal with the PIF fall through, however, the PGA Tour will, at the very least, receive a much-needed investment from SSG.
And with SSG’s support, an agreement with the PIF does not look as certain as it once did.
Jack Milko is a golf staff writer for SB Nation’s Playing Through. Be sure to check out @_PlayingThrough for more golf coverage. You can follow him on Twitter @jack_milko as well.
0 Comments