PGA Tour lands $3 billion investment from U.S. group as Saudi talks continue
The PGA Tour signed a $3 billion investment agreement with a consortium led by Fenway Sports Group, as talks with Saudi Arabia's Public Investment Fund remain ongoing.
Why it matters: This will allow the pro golf group to beef up its commercial business and provide a financial stake to players.
Details: The deal will see Strategic Sports Group become a minority investor in the newly-created PGA Tour Enterprises, a for-profit entity that will manage the PGA's commercial business.
- The deal, which includes $1.5 billion upfront, values PGA Tour Enterprises at $12 billion, according to Bloomberg.
- As part of the agreement, nearly 200 PGA Tour members will have the opportunity to become equity holders in the new company, with the potential for future players to be included.
- This would be based on vesting grants, the number of which could be based on factors like career accomplishments and recent achievements.
Investor list: In addition to Fenway (whose backers include LeBron James), Strategic Sports Group includes: Milwaukee Brewers owner Mark Attanasio, Atlanta Falcons owner Arthur Blank, Boston Celtics majority stake owner Wyc Grousbeck, and the family office of New York Mets owner Steve Cohen.
Catch up quick: The PGA Tour and PIF first agreed to a framework deal in June that would have combined the commercial businesses of the PGA Tour, DP World Tour and Saudi-backed LIV Golf into a separate entity that would count the PIF as minority investors.
- The surprise announcement immediately sent shockwaves throughout the sport and drew the ire of some players and U.S. regulators wary of foreign influence in golf.
- As talks dragged on, the PGA Tour attracted further interest from U.S. investors to co-invest in the deal. The PGA Tour engaged in final negotiations with Strategic Sports Group in December.
- The PGA Tour said Wednesday that talks have progressed with the Saudis and that Strategic Sports Group has consented to a future investment from Saudi Public Investment Fund.
- In regards to the DP World Tour, the PGA Tour said that a strategic alliance "remains a focus" and that it's in "active discussions on how to best work together for the continued benefit of all."
The bottom line: The fragile peace between PGA Tour and LIV was already fraying. Last month, LIV poached Jon Rahm and has added ex-PGA Tour golfers Adrian Meronk and Tyrrell Hatton in recent days.
Editor's note: This story has been corrected to remove Redbird Capital Partners founder Gerry Cardinale and Cubs chairman Tom Ricketts from Strategic Sports Group participants.