Commissioner Jay Monahan said that the PGA Tour reached an agreement with Saudi Arabia’s Public Investment Fund on Monday night, the shocking merger then leading to a rollout plan that included Monahan and PIF governor Yasir Al-Rumayyan being interviewed together on CNBC less than 24 hours later.
One of the key questions that arose: Why now?
The bitter divide between the two warring sides has lasted for more than a year – this week is the one-year anniversary of the inaugural LIV Golf event in London – so what has transpired that made the deal more palatable for both the Tour and the PIF?
Monahan was vague in regard to an exact turning point over the past seven weeks of discussions – “Circumstances change,” he said – but the specter of the Tour’s ongoing antitrust lawsuit and the financial realities of the new designated-event model appeared to factor significantly.
In order to keep pace with LIV Golf’s $25 million purses, Monahan said the Tour has needed to dip into its reserves to cover the increased costs of the designated events. Those mounting fees, as well as the ongoing lawsuit (which would stretch into at least 2024) and the Tour’s commitment to the European tour, have been “significant,” Monahan said.
“I’m grateful that when we looked at 2024, the response that we’ve gotten from our sponsors and our partners have been very positive, and the losses that we experienced in ’23 will be significantly mitigated,” he said. “This puts us in a position where we’ve got capital that we can deploy to the benefit of our members and through our tournaments, and it gives us capital to deploy in growth businesses that ultimately will generate a return that we’ll reinvest in our players.”
Another factor was more strategic, however.
It was an opportunity, Monahan said, to “take the competitor off the board.”
“We were competing against LIV, I felt very good about the changes we’ve made and the position we were in,” Monahan said, “but to take the competitor off the board, to have them exist as a partner, not an owner, and for us to be able to control the direction going forward put us in a … productive position for the game at large.”
Over the past year the Saudi-backed league has poached star players – including Phil Mickelson, Brooks Koepka, Bryson DeChambeau and Dustin Johnson, as well as reigning Open champion Cameron Smith – and there now exists a pathway for those players to return to the Tour if they reapply for membership and meet the tours’ criteria.