'Potential there is really big': PGA commissioner, PIF governor explain golf's big merge

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LIV Golf and the PGA Tour created a tsunami Tuesday when the rival golf competitors announced a merger.

LIV Golf started play a year ago and lured some of the top PGA Tour players with the promise of bigger purses backed by the Public Investment Fund of Saudi Arabia.

LIV Golf was met with much criticism from Rory McIlroy, Tiger Woods and others for accepting support from a country with a history of human rights violations and for breaking tradition.

There are many unknowns about the merger, including how it will operate, who will make key decisions and even what the new organization's name will be.

After previously lambasting supporters of LIV Golf and suspending players who defected to the new series, PGA Tour commissioner Jay Monahan joined PIF governor Yasir Al-Rumayyan on CNBC's "Squawk on the Street" on Tuesday to discuss the implications of the LIV Golf and PGA Tour merger and why they decided to join forces after a tense rivalry. They said that opportunities for growth as the demographics of golf are changing were a key factor in creating unity.

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How the PGA Tour-LIV Golf merger will operate

The PGA Tour was previously a tax-exempt non-profit organization. When the merger with LIV Golf was announced, part of the deal is that the new joint organization will be a for-profit LLC.

Monahan maintains that certain elements of the new venture will remain under a 501 (c)(6) and the commitment to serving communities that host tournaments will remain a core value of professional golf.

"The (c)(6) stays in place and out of the (c)(6), we'll continue to operate our tours. We'll put our player retirement plans and assets there. So that stays in place," he said. "I think it's very important, one of the things that's important to both of us is every single week we're playing tournaments, we're making a huge impact in the communities where we're invited guests.

Monahan continued that there are still many steps toward finalizing the structure of the new organization.

"This is early. We're going to go through an evaluation, or valuation, of all the businesses," he said. "... As Yasir is quick to point out, there will be an additional investment in growth initiatives. That's what's really exciting here."

Al-Rumayyan acknowledged that getting the ground work for the new organization is of first priority and that the investment could be billions of dollars. Despite the many unknown variables, he is steadfast in seeing the vision through.

"The first step is today. The second one is the definitive agreement. Then we are creating the board and the governance of the whole thing is we will evaluate every proposal that will come to us at the board level," he said. "So whatever it takes, that's how much is the commitment that we are committed for."

LIV Golf-PGA Tour merger seeking to unify golf, reach broader audience

Host David Faber asks the guests, "Are you creating one entity for global golf, essentially?"

"Exactly, that's the idea," Al-Rumayyan said. "The potential there is really big. If you look at the size of golf, monetary-wise, it's about $100 billion today. I think the growth is there. I think working together, we can have a faster growth rate than the way it was for the past 10 or 20 years."

Monahan agreed and said he is serious about embracing the changing demographic of golf, which this deal represents.

"When you look at the game on a global basis, there are now more people playing the game outside the U.S. than playing inside the United States," he said. "You look at everything that has transpired in terms of the forms of distribution, Top Golf and all the other ways that people can interface with our sport. There are now more off-course participants than on-course participants and that combined audience in the U.S. is 48% under the age of 35. Reaching a younger demographic at a time when the sport has never been more popular and doing so by coming together to collaborate at this point in time, that's where we see the commonality in purpose and that's where we see this huge opportunity."

This article originally appeared on USA TODAY: PGA Tour-LIV Golf merge: PGA commissioner, PIF governor weigh in