The 239 days that have elapsed since June 6 proved the Framework Agreement between the PGA Tour and the Saudi Arabian Public Investment Fund was more armistice than peace accord, so it’s tempting to interpret the announcement that a group of sports industry titans have invested $3 billion in the newly-formed PGA Tour Enterprises as rearmament for more conflict ahead. It’s more accurate to read it as evidence that parties to the game’s civil war are closer than ever to their desired outcomes.
Except you, dear golf fan. You can pound sand, at least for now.
The unveiling of the Strategic Sports Group investment wasn’t intended to answer fundamental questions about the future of golf but rather to assure the only constituency that really matters that their interests are being tended. That constituency is star players, and their only interest is personal enrichment, which they’ll see in equity grants and purse guarantees, even if it’s unclear how the market works for them to realize the value of their equity by selling it. For most, it’s not LIV Golf money, but it’s enough to hold off the wolves that are apparently gathering at every door in Jupiter, Florida.
But Wednesday also offered a measure of clarity on what other parties are getting.
The deal restores to the PGA Tour a little of the leverage that had seemed lost, especially when LIV poached Jon Rahm last month. It now has the resources to go it alone without the Saudis, but then that’s always been true. The Tour is just no less dependent on the loyalty of its members, many of whom have shown themselves to be Benedict Arnolds in soft spikes.
SSG’s investors get a minority stake in the only major league in the U.S. that didn’t have conventional owners, one that is ripe for private equity’s most cherished combination: expansion and cost-cutting. They also gain proximity to Yasir Al-Rumayyan, the governor of PIF and the idealized Ken doll of investment partners.
Ostensibly, PIF is not part of this deal — its negotiations with the PGA Tour are far from the finish line — but there’s a clear victory here too for Al-Rumayyan. SSG’s backers include owners from every American league (NFL, MLB, NHL, NBA) and PIF, like many wealth funds in Gulf States, is eager for access to those opportunities. Golf is merely the Saudi’s pathway to greater prizes.
All of the aforementioned parties are incentivized to see the Saudi component finalized. As for regular fans, the only thing…
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