‘A unique offering in professional sports’: PGA Tour to offer top golfers equity

MEMPHIS, TENNESSEE - AUGUST 11: Rory McIlroy of Northern Ireland and Scottie Scheffler walk off the 11th tee box together during the second round of the FedEx St. Jude Championship at TPC Southwind on August 11, 2023 in Memphis, Tennessee. (Photo by Ben Jared/PGA TOUR via Getty Images)
MEMPHIS, TENNESSEE - AUGUST 11: Rory McIlroy of Northern Ireland and Scottie Scheffler walk off the 11th tee box together during the second round of the FedEx St. Jude Championship at TPC Southwind on August 11, 2023 in Memphis, Tennessee. (Photo by Ben Jared/PGA TOUR via Getty Images)
The PGA Tour will offer equity to players such as Roroy McIlroy and world No1 Scottie Scheffler
The PGA Tour will offer equity to players such as Roroy McIlroy and world No1 Scottie Scheffler

The PGA Tour is to offer players equity in its business for the first time once it reaches a final agreement with Saudi Arabia’s Public Investment Fund over a tie-up with LIV Golf and Europe’s DP World Tour.

Such a move could boost the earning potential of the game’s biggest stars, such as Rory McIlroy, while also encouraging their loyalty to playing on and promoting the leading circuit in men’s professional golf.

Commissioner Jay Monahan also confirmed that the PGA Tour had received numerous “significant” formal offers of minority investment in the new entity, amid reports of interest from the owners of Premier League clubs Liverpool and Chelsea.

Such investment could raise doubts over the viability of fleshing out June’s framework agreement with PIF and the DP World Tour, of which Monahan said progress had been “deliberate given the complex nature”.

News of the opportunity for Tour members to own a stake came in a memo from Monahan to players on Tuesday, a day after a lengthy board summit featuring Tiger Woods at its Florida headquarters.

“Tour management has designed a program that would align the interests of our members with the commercial business of the Tour via direct equity ownership in PGA Tour Enterprises,” Monahan said.

“At the point we secure outside investment, this would be a unique offering in professional sports, as no other league grants its players/members direct equity ownership in the league’s business.

“We recognize – as do all of the prospective minority investors who are in dialogue with us – that the PGA Tour will be stronger with our players more closely aligned with the commercial success of the business.”

The PGA Tour would be the biggest sports organisation to offer its competitors equity, a practice until now only trialled by challenger brands such as triathlon’s PTO Tour.

Talks with PIF over investment in a new entity that would pool the PGA Tour’s commercial rights with those of LIV Golf and the DP World Tour look increasingly unlikely to conclude this year, as originally forecast.

Monahan said they remained ongoing but also confirmed reports of minority investment proposals from unnamed investors, identified by some US media as including Fenway Sports Group, which owns Liverpool and baseball’s Boston Red Sox, and Eldridge Industries, led by Chelsea co-controlling owner Todd Boehly.

“We continue to remain focused on our negotiations towards a Definitive Agreement with PIF and the DP World Tour as our priority,” Monahan wrote.

The PGA Tour boss said talks with PIF had “generated unsolicited – although not surprising – interest from numerous outside potential investors”.

He added: “Many of those prospects moved forward to a diligence review – with Tour management and [its bankers] Allen & Company working together with the potential minority investors’ representatives – and we then received significant, formal proposals that demonstrate the power of the PGA Tour brand, its players and our commercial opportunity.”

McIlroy earlier stressed the need for confidentiality in talks with PIF and the DP World Tour, which he has been privy to in his role as a player director on the PGA Tour.

“I think if you were in the middle of it, you would see that there’s a path forward,” he said. “It’s just that no one on the outside has any details. Loose lips sink ships, so we are trying to keep it tight and within walls. I’m sure when there’s news to tell, it will be told.”

McIlroy wants a swift conclusion to negotiations that have already taken five months but acknowledged that any agreement could still be scuppered by US competition watchdogs.

“I think getting something done sooner rather than later is a good thing. Because you know, even if we get a deal done, it doesn’t mean that it’s actually going to happen,” he said.

“That’s up to the United States government at that point and whether the Department of Justice thinks it’s the right thing to do. We are just going to have to wait and see. But in my opinion, the faster something gets done, the better.”