PGA Tour turns down Endeavor bid to form partnership, says COO
The PGA Tour has turned down a bid by Endeavor to form a strategic partnership with the circuit, according to Endeavor’s chief operating officer.
“They've officially turned it down,” Mark Shapiro told Sportico Friday. “We're big fans of golf, and we'll continue to champion the PGA Tour, but we're not going to be an investor at any level.”
Endeavor – which owns WWE, the UFC and various sports agencies, including IMG – publicly expressed interest in a partnership with the Tour and it’s not clear if the Tour’s ongoing negotiations with Saudi Arabia’s Public Investment Fund prompted the circuit to turn down the offer.
In the first provision of June’s framework agreement between the PIF and PGA Tour, the fund has the “right of first refusal on capital raised by NewCo,” the for-profit entity that would include the Tour, LIV Golf and the DP World Tour. The deadline to negotiate a definitive agreement is Dec. 31 and the original deal required that the “parties will work in good faith to enter into the definitive agreements as expeditiously as possible.”
Endeavor has an existing partnership with the Tour that includes selling commercial rights and managing tournaments.
Fenway Sports Group – which owns MLB's Boston Red Sox, the NHL's Pittsburgh Penguins and the English Premier League's Liverpool FC – is also reportedly interested in investing in the Tour.
In an “open letter to the membership of the PGA Tour,” former Tour player and policy board member Joe Ogilvie pointed out that any investment, either by PIF or another private equity firm, would include compromises.
“If we sell a part of our Tour, we are taking on a close partner. It's not dissimilar to getting married. Once consummated, the decision-making by law will require that the best interests of all parties be considered, including your new spouse,” Ogilvie wrote. “We can’t take their money and check in with them on occasion, they’re in bed with us. They will be part of our Tour, for better or for worse. We must understand the detailed motivations of any new investor and how they will participate in the functioning of the board.”
While Ogilvie, a long-only value manager with Wallace Capital Management, explained the move to a for-profit model will benefit the Tour and players, he did stress the need for the circuit’s players to maintain control.
“The policy board of the PGA Tour will be made up of a majority of player directors, with identical voting rights as the independent directors,” Ogilvie wrote. “The framework agreement was the most important decision since Arnold Palmer and Jack Nicklaus created the modern PGA Tour and was made without a single PGA Tour player's input, including those players representing you on the PGA Tour policy board.”
