Even at this early moment when the shock is still fresh and the details are still undetermined, one thing has become clear about the stunning announcement that the PGA Tour and LIV Golf have agreed to merge their commercial operations under a shared ownership group:
The professional game has been forever changed.
Whether going into business with Saudi Arabia’s Public Investment Fund and its governor, Yasir Al-Rumayyan, ultimately will be a good thing or a necessary business decision for the PGA Tour lies at the heart of the almost breathtaking surprise that the two rival groups have agreed to move forward together.
The announcement had the effect of an earthquake, and only now, even as the aftershocks continue, can the impact begin to be measured.
Other than the small handful of people instrumental in structuring what PGA Tour commissioner Jay Monahan called a “framework agreement,” no one saw this coming.
It began when Jimmy Dunne, a member of the tour’s Policy Board, met with Al-Rumayyan seven weeks ago and reported back to Monahan the possibility of a future treaty between the two sides. Though many of the specifics are yet to be resolved, Monahan said the agreement was finalized Monday night, just hours before it was announced.
Where it leads remains open to speculation.
Will it change how the PGA Tour looks and operates?
Will LIV Golf continue, or how will it be folded under an umbrella that includes the PGA and DP World tours?
Will the players who left for LIV be allowed to return to their respective tours with or without penalty or punishment?
Why did the PGA Tour do an about-face following its public criticism of LIV Golf and come to an agreement with the group that created the biggest existential threat to the tour since it was created in 1968?
Did money and the Saudis win?
If perception is reality, at least in the short term, Tuesday did not look like a good day for the PGA Tour and Monahan. Though Monahan, Al-Rumayyan and other leaders preached the shared message that their agreement is a huge victory in terms of unifying the sport, it appears as if the PGA Tour made a financial decision in the face of mounting fiscal challenges.
The PGA Tour had won the battle in terms of golf. LIV’s minuscule television ratings and struggle to develop a sizable fan base threatened to marginalize the upstart league despite the success of some of its players – notably Brooks Koepka – in the first two major championships this year.
The team concept has been slow to catch on, and though it may continue in some form, it seems unlikely it will feature prominently on the PGA Tour. What could evolve under the new agreement is a global tour of sorts with perhaps 20 or so high-profile, high-dollar events that mostly will benefit the top players, not unlike the current tour structure.
Monahan has been reluctant to explain what changed specifically, what took him off his hawkish position, vowing to protect and strengthen the PGA Tour only to be sitting shoulder-to-shoulder with Al-Rumayyan on CNBC on Tuesday morning sharing the stunning news of their agreement.
“Circumstances change,” Monahan said more than once on a conference call with reporters Tuesday afternoon. (For full transcript, click HERE.)
What specifically?
“We just realized that we were better off together than we were fighting or apart,” Monahan said.
It doesn’t take a cynic to believe it happened because of Saudi Arabia’s money. If it wasn’t going away, the PGA Tour found a way to get a share of it. Monahan, who spoke last year about “legacy over leverage” and said PGA Tour players never had to apologize for where they play, became a target immediately after the news broke.
“I recognize that people are going to call me a hypocrite,” Monahan said. “Any time I said anything, I said it with the information that I had at that moment, and I said it based on someone that’s trying to compete for the PGA Tour and our players. I accept those criticisms. But circumstances do change.”
For players, including Rory McIlroy and Tiger Woods, who rejected hundreds of millions of dollars being offered by LIV and took strong public stances against the Saudi-backed organization, it was a dramatic reversal from what they advocated.
It was a victory for Saudi Arabia in its effort to have a seat at the table among golf’s global leaders, and it seems likely to be more lucrative for top PGA Tour players as more money seems destined to be pumped into their already thriving business.
Though Monahan and tour executives have stressed over the past 12-18 months that the PGA Tour is a player-run organization, the players were not involved in this landscape-altering agreement. They learned of it Tuesday morning about the time the rest of the world – including LIV CEO Greg Norman – learned about it.
Winning back player trust could be Monahan’s first order of business, and it began with a player meeting which Monahan described as “intense, certainly heated” Tuesday afternoon at the RBC Canadian Open in Toronto.
“I think if you look at just the environment that we're in, and the PIF was controlling LIV, and we were competing against LIV, I felt very good about the changes we've made and the position that we were in,” Monahan said.
“But ultimately to take the competitor off of the board, to have them exist as a partner, not an owner, and for us to be able to control the direction going forward put us in a position as the PGA Tour to do and serve our members, and at the same time, again, get to a productive position for the game at large.”
It’s not as if the PGA Tour’s new designated tournament model wasn’t working, at least from the perspective of the players and the public. It has been a clear success, and the tour is said to be just days away from releasing the 2024 version of its schedule with a similar structure focusing on bringing the top players together more often.
The creation of the $20 million events, which are expected to have 70-80-player fields next year, came in direct response to LIV’s spending spree that fractured the sport last year.
Having introduced the designated-event model this year, the tour asked some sponsors to more than double their spending, and felt some pushback. As one sponsor said, putting up the additional money with no assurance that all of the top players would play became an increasingly difficult sell.
“To make the changes in ’23 and ultimately to make the changes in ’24, we've had to invest back in our business through our reserves,” Monahan said. “Between our reserves, the legal fees, our underpin and our commitment to the DP World Tour and their legal fees, it's been significant.”
LIV Golf, which will celebrate the one-year anniversary of its first event June 9, will continue to operate as it has through the remainder of 2023, but it’s unclear how it will look next year and beyond.
The PGA Tour, however, is likely to look much the same next year, whether or not LIV members are allowed to rejoin the tour in 2024.
Monahan said he does not see a future that includes players moving between the PGA Tour and LIV Golf, if it continues to exist in its current form.
One benefit for both sides is the end to the legal battles between the two groups. The discovery process on both sides was likely to reveal information that neither wanted to become public.
Still to be determined is a potential path back to the PGA Tour for players who jumped to LIV and, if those players are allowed back, how might the tour reward those who turned down potential millions to stay.
One LIV player said bringing players back to the PGA Tour would be “awkward” but applauded the agreement.
Monahan said the tour Policy Board, which includes five players among its 10 members, will have to approve all changes including appointments and allowing former members to return.
“I think those are all the serious conversations that we're going to have,” he said. “We're going to have them with our board. Ultimately everything needs to be considered. Ultimately what you're talking about is an equalization over time, and I think that's a fair and reasonable concept.”
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Top: Yasir Al-Rumayyan (left) and Jay Monahan appear on CNBC Tuesday morning to announce the new business arrangement involving the PGA Tour, LIV Golf and the DP World Tour.