Memo – PGA Tour eyes investors besides Saudis

The PGA Tour remains focused on reaching an agreement with Saudi Arabia’s Public Investment Fund (PIF) and the DP World Tour, according to a memo sent to players by PGA Tour executive vice president Jason Gore. The memo also mentioned receiving interest from other potential investors. Gore stated that the negotiations with PIF and the DP World Tour are progressing well, but have also resulted in unsolicited outreach from other investors, which strengthens the Tour’s position and growth potential.

While negotiations with PIF chairman Yasir Al-Rumayyan and other officials are ongoing, sources indicate that the proposed deal is facing obstacles, including PIF officials seeking more control and resistance to incorporating team golf into the sport’s future global ecosystem.

The parties had previously announced a framework agreement to form a new for-profit enterprise called PGA Tour Enterprises, which combines PIF’s golf-related commercial business and rights (including LIV Golf) with the commercial business and rights of the PGA Tour and DP World Tour. The framework agreement is set to expire on Dec. 31, but may be extended.

The U.S. Department of Justice’s Antitrust Division is investigating certain aspects of the deal, leading some to doubt its approval. A source familiar with the negotiations expressed skepticism, stating that the PGA Tour and the Department of Justice may never approve the merger due to concerns about the Saudis’ limited influence in a merged entity.

Recently, news broke that Endeavor Group Holdings Inc. and Fenway Sports Group are exploring investment opportunities in the PGA Tour as an alternative to the pending deal with PIF. Private equity groups and other investors have also shown interest, with the PGA Tour aiming to secure a $2 billion “war chest” if the negotiations with PIF fail.

Ari Emanuel, CEO of Endeavor, confirmed that his company submitted a bid to the PGA Tour on Oct. 6 and mentioned seven other bidders. Endeavor, valued at approximately $9.5 billion, has recently acquired World Wrestling Entertainment and merged it with UFC to form TKO Group Holdings. Emanuel expressed enthusiasm for the sport and the potential value his company could bring to it.

Colin Neville from Raine Capital and investment bank Allen & Co., along with PGA Tour’s player directors, are involved in the negotiations. Gore mentioned that a policy board meeting on Nov. 13 will be dedicated to discussing the ongoing negotiations.