There have been plenty of bombshells during the PGA Tour and LIV Golf League’s ongoing battle on the course and in the courts to topple each other for supremacy in what was once known as the gentleman’s game.
But nothing from the past 18 months or so — not Phil Mickelson’s controversial comments about the Saudi Arabian monarchy’s history of alleged human rights violations; not major championship winners like Dustin Johnson, Bryson DeChambeau and Brooks Koepka accepting hundreds of millions of dollars to defect to LIV Golf; or Peter Uihlein jumping from Smash GC to the 4Aces — could have prepared the golf world for what went down Tuesday morning.
Shortly after 9 a.m. ET, PGA Tour commissioner Jay Monahan sat with Yasir Al-Rumayyan, the governor of Saudi Arabia’s Public Investment Fund (PIF), which is financing LIV Golf, on CNBC to announce that their circuits, along with the DP World Tour, had reached an agreement to unify and form a larger commercial enterprise.
PIF, with more than $600 billion in assets, will be the leading investor in the yet-to-be-named new entity, and also will become a premier corporate sponsor of the PGA Tour, DP World Tour and other international tours.
For those who need a point of comparison, it was like Dusty Rhodes’ girlfriend showing up on stage at a World Championship Wrestling event in the 1980s with Ric Flair and pledging her loyalty to the Nature Boy.
Or Alabama football coach Nick Saban taking the Auburn job. No one saw it coming — not even the PGA Tour’s biggest stars, who were kept in the dark.
After months of defending the PGA Tour and criticizing the source of LIV Golf’s funding at every turn, Monahan made an abrupt eight-inch-heel turn, leaving golf fans and his own tour members to question everything they’d heard from him for more than a year.
“I recognize that people are going to call me a hypocrite,” Monahan said during a video conference with reporters on Tuesday. “Anytime 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. I think that in looking at the big picture and looking at it this way, that’s what got us to this point.”
While there are still many details to be worked out, here’s what we know and don’t know about the new partnership:
How did the deal come together?
Sources told ESPN on Tuesday that the deal came together very quickly. PGA Tour policy board chairman Ed Herlihy and board member Jimmy Dunne, who is well-connected in the golf world, helped lay the groundwork for the agreement and had an initial meeting with Al-Rumayyan.
In the video conference with reporters, Monahan said the PGA Tour had been in talks with PIF for about seven weeks. There were four in-person meetings, as well as video conferences and telephone calls. Monahan said an agreement was reached Monday night.
On CNBC on Tuesday, Al-Rumayyan said he met Monahan in London recently. They had lunch, played golf the next day, and then had lunch again. Monahan said the policy board has to approve the deal formally; Al-Rumayyan said it should be finalized in a “matter of weeks.”
What changed Monahan’s mind about PIF?
That’s the million-dollar question. In October, after Mickelson had suggested that the PGA Tour and LIV Golf needed to come together, Monahan told ESPN at the Presidents Cup in Charlotte, North Carolina, that it would never happen.
“Well, I think words and actions are important,” Monahan said at the time. “I think it’s impractical when you look at the fact that certain players have sued the PGA Tour, their employer has sued the PGA Tour. It’s not in the cards. It hasn’t been in the cards, and it’s not in the cards. I think we’ve been pretty consistent on that front.”
When Monahan was asked if the circuits could co-exist, he said: “I’d provide the same answer. The answer to that is they’ve gone down their path, and I think we have been pretty consistent that we’re going down.”
So what changed? Sources told ESPN that the PGA Tour and LIV Golf have each spent tens of millions of dollars defending themselves in a federal antitrust lawsuit that LIV Golf and 11 of its players filed against the PGA Tour in August. The PGA Tour filed a countersuit, claiming LIV Golf interfered with its contracts with players.
On Friday, the U.S. Court of Appeals for the Ninth Circuit in California denied the PGA Tour’s motion to dismiss LIV Golf’s appeal over sovereign immunity. The case would have likely dragged on for several months, if not a couple more years. Neither side wanted to share its secrets via required discovery, and neither wanted to keep spending money on lawyers.
Richard Sheehan, a professor emeritus of finance at Notre Dame’s Mendoza College of Business, who specializes in the economics of sports, said in a statement provided to ESPN that “economic interests do generally win out in the long term.”
“Multiple lawsuits with potentially huge costs, very long potential timelines, and tremendous uncertainty regarding the legal outcomes have a way of focusing participants’ attention on issues at hand and the financial and reputational stakes in the balance,” Sheehan said.
“LIV and the Saudis may well have entered the golf arena in an effort to repair the Saudi Arabian monarchy’s reputation on human rights. The lawsuits do not help on that end. And the PGA likely has no interest in trying to match Saudi/LIV funding of a protracted and expensive legal battle. Both had an incentive to settle, and the questions now revolve around the terms of that settlement.”
Instead of spending tens of millions of dollars more on lawyers, Monahan might have figured it was more financially prudent to get in business with the Saudis, rather than sue them.
“In terms of how did we get to this point and how did we go from a confrontation to now being partners?” Monahan said Tuesday. “We just realized that we were better off together than we were fighting or apart, and by thinking about the game at large and eliminating a lot of the friction that’s been out there and doing this in a way where we can move forward.”
When did players learn the news?
Believe it or not, it seems that nearly all of them learned the same time as everyone else — when CNBC published a short statement on its website, followed by a news release on the PGA Tour’s website shortly after 10 a.m. ET.
Players weren’t happy about being kept in the dark. Tiger Woods, Rory McIlroy, Jon Rahm and members of the Players Advisory Committee didn’t even know what was taking place behind the scenes.
“It’s disappointing being a PGA Tour member,” England’s Callum Tarren told the Golf Channel. “The guys who’ve stayed loyal to the PGA Tour, it’s kind of a kick in the teeth for them. Obviously, Rory was a huge advocate of the PGA Tour, and now it looks like all of this hard work and sticking up for the PGA Tour was just left by the wayside.”
Longtime PGA Tour member Scott Stallings blasted Monahan during an interview with Sirius/XM Radio on Tuesday.
“How many other sides of his mouth can he speak out of?” Stallings said. “And that’s tough to say about the commissioner of the tour, but I mean literally it wouldn’t take you very long to internet search to find completely contradictory comments to what he said on the CNBC interview today. I have no problem with the guys who went to LIV, zero problems with the guys that decided to go.
“But with [Monahan] saying on the interview that they’re currently finding a path for the guys to be able to play on the PGA Tour by the end of 2023. He said they’ll never play on the PGA Tour again. I’m just trying to understand at what point are we going to start establishing a baseline of truth? … As far as that being our guy that’s our advocate in the world in the game of golf, that’s very disconcerting as a player.”
When did LIV Golf CEO Greg Norman find out, and what happens to him?
Interestingly, Norman’s name didn’t appear in the 976-word statement that was released by the PGA Tour, DP World Tour and Public Investment Fund on Tuesday. Norman didn’t react to the breaking news on social media on Tuesday. In fact, the LIV Golf League didn’t even weigh in with a statement to the media or on its social media, either.
Al-Rumayyan told CNBC that Norman didn’t find out about PIF’s partnership with the PGA Tour and DP World Tour until shortly before everyone else did.
“I made a call just before this and, of course, he is a partner with us, and all the stakeholders that we have with us, they had the call right before this interview,” Al-Rumayyan told CNBC.
Norman has been the face of LIV Golf during its first two seasons. He hasn’t said much during the past several weeks, however, and his days with LIV Golf seem to be numbered. There has to be a reason Norman didn’t commentrow about something he’d been pushing for months.
What will future schedule and tournament formats look like?
While the deal has been described as a unification of the competing tours, they’re going to continue to be separate entities for the rest of this season. The final seven LIV Golf League events will go on as planned, starting with a tournament in Spain at the end of this month. The season ends with a team championship in Saudi Arabia in early November.
The PGA Tour’s plan to stage elevated events with no cuts and reduced fields in 2024 and beyond isn’t expected to change.
The bigger question is what happens to the LIV Golf League after this season. The Saudis have invested more than $2 billion into the venture, and the league’s lawyers said in court documents obtained by ESPN in February that it generated virtually no revenue in its first season in 2022. The league’s season debut in Mayakoba, Mexico, and second in Tucson, Arizona, drew low ratings. LIV Golf has since declined to provide TV ratings.
With the Saudis planning to invest billions of additional dollars into the new entity and the PGA Tour as one of its premier corporate sponsors, it might no longer have an interest in continuing to fund the LIV Golf League with little financial return.
The team format could be folded into the PGA Tour schedule, or the LIV Golf League might continue in some iteration that takes place in the fall after the PGA Tour season concludes. But there seem to be serious questions about the future of the LIV Golf League.
“We’re in a framework agreement,” Monahan said. “We haven’t concluded the definitive agreement. I have not had the opportunity that I’m going to have to conduct a comprehensive empirical evaluation [of LIV Golf]. I don’t want to make any statements or make any predictions. But what is in place is a commitment to make a good-faith effort to look at team golf and the role it can play going forward.”
Will the PGA Tour give the LIV guys their cards back?
It remains to be seen how difficult it will be for players like Mickelson, DJ, Koepka, Patrick Reed and others to return to the PGA Tour if they choose to do so.
In a memo to PGA Tour members on Tuesday, Monahan described the reinstatement of players who had defected to the LIV Golf League as a “complicated endeavor and one that will be guided by established PGA Tour rules and regulations.”
Does that mean those players will still face suspensions and/or fines for playing in LIV Golf tournaments without a conflicting-event release?
At the Players Championship in March, Monahan was asked about the possibility of suspended players returning to the PGA Tour. He said at the time, “I’ve been hearing that a lot lately and I’m not certain where that’s coming from. The players that are playing on that tour are contractually obligated to play on that tour. So any hypotheticals at this point really aren’t relevant. But our position, to answer your question directly, has not changed.”
On Tuesday, Monahan said there is a plan in place, but he wasn’t willing to disclose it until the agreement with PIF and the DP World Tour is finalized.
“At this point, we’re under a framework agreement,” Monahan said. “To complete this, we’ve got to get to definitive. We have that identified in our framework agreement. But at this point, it’s reapplying for membership at some point after the end of 2023, and that’s something that I’ll address in the future, certainly, once we get through the definitive.”
Do the LIV guys have to pay back any money?
Many of the league’s top stars received multi-year contracts that guaranteed them more than $100 million over the course of the deal, including Mickelson (reportedly $200 million), Johnson ($150 million), Bryson DeChambeau ($125 million) and Koepka ($100 million).
The guaranteed money was being paid over the course of those deals, so PIF wouldn’t be owed any sort of refund from the players. But if the LIV Golf League ends up folding, would PIF honor the remaining years on the players’ contracts? LIV Golf League officials previously told ESPN that each of the deals is different, so it’s unknown if LIV Golf has an escape clause if the league folds. Could the players sue the league for the rest of their money?
Do the PGA Tour players get any money?
One would have to assume that a large share of the Saudis’ investment in the PGA Tour would go toward even richer purses for players. Several of the tour’s top stars, including McIlroy, Rahm, Patrick Cantlay, Cameron Young and Hideki Matsuyama, declined significant offers from LIV Golf and remained loyal to the PGA Tour.
If the PGA Tour allows suspended LIV Golf players to come back, how is it going to make players like McIlroy and Matsuyama financially whole for what they passed up by turning down LIV Golf?
“You know, it probably didn’t seem this way to them, but as I looked to our players, those players that have been loyal to the PGA Tour, I’m confident that the move that they made, they’ve made the right decision,” Monahan said. “They’ve helped rearchitect the future of the PGA Tour. They’ve moved us to a more pro-competitive model.”
Monahan was asked if the PGA Tour would consider making the players who were offered lucrative contracts from LIV Golf but turned them down financially whole.
“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 equalization over time, and I think that’s a fair and reasonable concept.”
This story originally appeared on ESPN
