re: Official: LIV golf in the hands of PGA Tour Leaders

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Nothing like “owning” something where you don’t have control of it

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Not a real business savvy type, are you?

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Not a real business savvy type, are you?

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I have been involved with M&A for the better part of 10 years through control documentation and review of the contracting process

The financiers can make life a living hell, but they aren’t ultimately in control. They can only try and throw their weight around with threats of leaving, those with the votes hold the actual power to kill anything and everything if they want

Now, the truth, is both sides normally are going to work together because it is in each others interests. For this case, it’s best interest for the pga to keep the Saudi money happy, for the Saudis, it’s in their best interest to let the people with the successful popular golf enterprises to run the golf operations

It isn’t at all a difficult concept

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Why would they go back to the PGA and Euro Tour?

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Because it will be $ beneficial for newco for the best to play against each other. I’m not sure how long the process will take and what contractual agreements exist that have to be figured out, but that just seems like the most likely scenario imo. It’s just a thought. Like everyone else, I don’t really know.

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The financiers can make life a living hell, but they aren’t ultimately in control.

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lol

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Tour executive vice president Tyler Dennis and chief operating officer Ron Price tell Sports Illustrated that the PGA TOUR “is fully in control of this new company (NewCo), which we tentatively are calling PGA Tour Enterprises” and added that the PIF “absolutely” wants the TOUR to be in control of men’s professional golf. They said the TOUR wouldn’t have come to the agreement without that assurance.

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I mean, will people accept it now? PIF wants the PGA people to run the show, that’s the entire reason they made this deal

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i think some people are thinking about this from a PE backed scenario where they come in as majority owners and an operational background, which this isn't. This is more like pure financing.

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This framework has more questions than answers. It should also be noted that the deal can also be terminated before the end of the year by either side, and the numerous investigations could complicate things further. This merger surviving until Jan will be quite the accomplishment in itself. And with how few details were actually included in the framework agreement, it’s clear there is a long way to go.


For example, A new “communications committee” will “facilitate a smooth” transition and manage communications between the three entities. Sounds like a built-in buffer even for dialog between all 3 entities is recognized as a must. Get ready for a continued dose of all 3 entities. Expecting LIV Golf to just go away is as shortsighted as expecting the DP Tour to just go away.

The PIF will be a “premier corporate sponsor” of both the Tour and DP World Tour and will be a title sponsor for at least one high-profile event. If PIF is chasing a tournament all their own, and getting it, how can you say they will be nothing but a silent partner?

The agreement states that all three leagues will co-exist. What part of that would suggest it's as simple as the PGA getting its way?

You also just had a Player's meeting on Tuesday and their questions are far from answered. Anyone that forgets that Monahan has lost complete trust and integrity with the Players is just whistling past the graveyard. Monahan hasn't faced this moral backlash and anger yet.

This framework agreement is anything but concise and settled, in any world.

Ok, ive had time to read the entire document. It's lighter than i thought, but here are the key terms based on my deal experience.

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In addition, the PIF will make a cash investment in NewCo for an incremental ownership in order to fund the growth ofNewCo which will include a right of first refusal on capital raised by NewCo, provided that, for the avoidance of doubt, the PGA TOUR will at all times maintain a controlling voting interest in NewCo and PIF will continue to hold a non­controlling voting interest, notwithstanding any incremental investment by PIF or exercise of its right of first refusal.

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Laywers will add the bolded phase it when they want to make a point and this is big, it pretty much says no matter how much money PIF dumps in, they can't get a controlling interest. Which makes sense, contrary to what people think, PIF doesn't want/need control, they just want to be seen together with PGA and elevate its brand that way.

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Except for the matters set forth in Paragraphs 6, 9 and 10 below, which are legally binding effective upon the execution of this Agreement, the following terms are non-binding pending the execution of definitive agreements (the "Definitive Agreements"), which the Parties agree to negotiate in good faith consistent with the terms of this Agreement.

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paragraph 6 includes the settlement of ligitation, so even if the deal falls through, the lawsuits are done. Could they start new ones? Sure, but its unlikely.

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(a) NewCo will name PGA TOUR, as competition manager for all of the PGA TOUR's contributed golf-related commercial businesses and investments into NewCo and provide PGA TOUR all information/materials necessary to execute such role, and PIF will provide all working capital/funding required to operate LIV through an investment into NewCo, and

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As some has speculated, this will work similarly to the FIA which governs many international motorsport orgs, most famously Formula 1. Also notes that PIF will continue to flip the bill for LIV specifically

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b) The PGA TOUR will have full decision making authority with respect to all strategic and operational matters related to competition in respect of its contributed golf-related commercial businesses and investments into NewCo subject to any relevant customary protections and

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So this confirms that the PGA Tour will retain full authority over all of its IP that it is contributing AND any investments into NewCo

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PGA TOUR / DP World Tour and LIV to Co-Exist. Subject to execution of the Definitive Agreements, (a) NewCo will undertake a full and objective empirical data-driven evaluation of LIV and its prospects and potential and will make a good faith assessment of the benefits of team golf in general, and PIF, the PGA TOUR and the DP World Tour will work together in an effort to

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They title this section "co-exist" then the first comment is to take a full and objective view of its prospects and potential...not great...but PIF says they are responsible for all cost so if they want to keep pumping money into LIV then it can.

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His Excellency Yasir AI-Rumayyan shall be designated as Chairman of the board of directors ofNewCo;

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People like to make a big deal out of this title and its usually because they don't understand that the title itself holds no special privilege or authority. It's quite common for owners of a company to be the CEO and Chairman of the board, but the title itself has no real power and in this case its confirmed by the other governance measures. I'm quite sure that it makes his excellency feel important.


In summary, i don't think there are any real surprises here. There are a lot of people who were cheering for LIV to "win" or the PGA to "win", but i don't think they knew what winning meant for each side. LIV was created for the express purpose of being a pain in the arse to the PGA so they could get a seat at the table. They have no interest in running a golf league and they have proven they aren't very capable either outside of writing insane checks. Jay absolutely had to tuck his tail between his leg and come back to the table, but i guarantee if he wanted to set up the same structure with backers, he 100% could have gotten it done with domestic money. Oddly enough in this format, it will probably result in FAR less meddling by investors than if they raised money domestically.

There is a lot of ink in this agreement on how things will work between the PIF and the PGA Tour/DP World Tour. There is little if any ink regarding LIV. Can any conclusions be drawn from this?

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There are a lot of people who were cheering for LIV to "win" or the PGA to "win", but i don't think they knew what winning meant for each side.

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I didn’t really care who won. I wanted LIV to get OWGR because several top golfers were there and I wanted them at least competing in every major. But it’s pretty clear LIV players and LIV won and the PGA Tour players that turned down Saudi money lost. Initially LIV wanted a seat at the table of top level golf and the PGA didn’t want dirty Saudi Blood money. LIV accomplished its purpose and was disruptive enough to get the PGA to fold.

Long term, we will see if it becomes a win for most involved. I’m just happy it looks like the best golfers will soon be competing with each other more regularly.

LIV loses if you see LIV as really being about 54 hole, shotgun start events that will go toe to toe with PGA tour events. I think that goes away it gets folded into the DP or PGA schedule as some unique world events.

I agree that PIF is, at least for now, perfectly fine having a funding and business role while golf people run newco. They also know they have the monetary influence to manipulate the votes should they ever need to.