ATLANTA — The PGA Tour is all-in on its still-developing agreement with the Saudi Public Investment Fund. Speaking prior to the Tour Championship at East Lake on Tuesday morning, PGA Tour commissioner Jay Monahan indicated that while he fully expects a deal to get done, the Tour was facing impending financial challenges … and there is, as yet, no public indication of any other source of funding for the Tour.
In his annual “state of the tour” address, Monahan held forth on a range of topics, most notably the status of ongoing negotiations between the Tour and PIF. Long on optimism but short on specifics, Monahan noted that “we have put an end to the divisive and distracting litigation, we have safeguards that are in place to put the PGA Tour in a position to control our future, and as I sit here today, I am confident that we will reach an agreement that achieves a positive outcome for the PGA Tour and our fans. I see it and I'm certain of it.”
The Tour and the PIF shocked the golf world with their joint announcement in early June of a partnership that would halt hostilities and form a new, for-profit organization to oversee the game of professional golf. Since then, Monahan has spent much of his time in damage-control mode, trying to reassure players, sponsors and fans that the agreement wasn’t just the right move — it was, in the tour’s estimation, the only move.
“When you look at the performance of our players, you look at the commitment of our players, our partners, our fans, all of our constituents, our tournaments,” Monahan said, “I feel like we're in the strongest position to be able to succeed and successfully conclude these negotiations in a way that protects the legacy of the PGA Tour on a long-term basis.”
The tour found itself in a financial arms race with the Saudi-backed LIV Golf, a race the tour — which does not have access to billions in oil-derived wealth — was doomed to lose from the start. Tournament purses have spiraled in recent years on the PGA Tour, a rise only accelerated by the arrival of LIV Golf. The winner of the FedEx Cup playoffs, for instance, will receive $18 million this year, up from $10 million as recently as 2018. Beyond the purses, an array of new bonus pools, incentives and “elevated events” will continue to chip away at the tour’s reserves.
Monahan conceded as much on Tuesday, but spun the agreement forward as an opportunity to tap into the PIF’s capital for the tour’s own purposes. He noted that the agreement will be a chance for the tour to “use the capital to be able to invest back in our product … to do things like further reduce commercial inventory in our broadcast, to further invest in our data businesses, to further invest in our media business.” The “reduction of commercial inventory” element of that statement in particular would be of interest to golf fans who have long complained about the commercial load of golf telecasts.
While Monahan expressed optimism about the future of the “NewCo” — the company to be formed by the tour and the PIF — he declined to speak in specifics about the future of LIV Golf as a tour, or the fate of LIV Golf players who might, at some point, wish to rejoin the PGA Tour.
“I'm not going to talk publicly about [specific details] until we've completed those discussions and I can answer that question specifically and directly,” he said.
The tour and the PIF have a self-imposed deadline of Jan. 1, 2024, to reach an agreement, and there’s no public backup plan. “In terms of alternatives,” Monahan said, “the sole conversation that we're having is the conversation we're having with PIF.”
“We're confident that we're going to reach a positive outcome for the PGA Tour,” he added. “I don't have any reason to think that we won't be successful.”