Unveiling the details of PGA Tour’s $3,000,000,000 deal with Strategic Sports Group
As the PGA Tour and PIF continue to work towards a merger, the Tour will get an infusion of cash from an outside source: Strategic Sports Group. They have officially reached an agreement that will see the group, which is a consortium of investors and sports owners, giving the golf tour $3 billion.
This agreement also officially launches the PGA Tour Enterprises, a commercial venture that falls under the Tour's control. The details of this deal, according to golf reporter Daniel Rapaport, are incredible.
The agreement reportedly comes with a $3 billion investment and a staggering $12 billion valuation. The golfers themselves will get $900 million in equity shares. Those will be handed out to around 180 players, with highly ranked players earning more than others. The PIF investment is subject to regulatory issues, so all of this could take a while.
The Tour also offered up a statement (via Awful Announcing):
"The tour’s policy board approved the investment at a meeting late Tuesday night, and its commissioner, Jay Monahan, was expected to brief golfers on details of the deal on a conference call Wednesday morning. The deal is expected to help the tour create a new for-profit company that will oversee its commercial interests, with the Strategic Sports Group (SSG) serving as a minority investor."
The PGA Tour has been funneling money into the sport so that it can attempt to keep up with the unbelievable money being spent on LIV Golf. They know the risk that comes with being stingy since LIV pays handsomely, but it has also resulted in a cash shortage that this agreement will help with.
Strategic Sports Group rescues PGA Tour
SSG's investment is expected to completely fund all PGA Tour event prize purses for the next five years. Given the increases they felt forced to employ for purses, this was proving to be a difficult issue moving forward.
Longtime sponsors like Wells Fargo, Honda and Farmers Insurance had backed out, leaving the future a massive question mark. That is until SSG stepped in.
This doesn't put an end to the Tour's discussions with PIF, as the statement via Awful Announcing mentioned:
"The tour originally planned to create the new entity alongside the Saudi Arabia Public Investment Fund, which owns LIV Golf, a rival team-based golf circuit, but the two sides have yet to agree to terms nearly eight months after announcing their intention to join forces. Though they faced a Dec. 31 deadline to reach a final deal, the two sides are still negotiating and remain hopeful the PIF will become an investor in the new commercial entity, according to two people familiar with the discussions who spoke on the condition of anonymity because of the sensitivity of the discussions."
They mentioned that they are still in deep and ongoing talks with the PIF as they aim to resolve the issues and come to an agreement. There has recently been a push for more unity in the sport, with even Rory McIlroy asking for LIV Golfers to be allowed to return to PGA if they so choose.