Details are starting to emerge about the reasons behind this week’s news about the PGA Tour’s merger with the Public Investment Fund and DP World Tour to form a new global golf entity.
The Wall Street Journal reported Saturday that PGA Tour commissioner Jay Monahan told Tour employees on Thursday it couldn’t financially afford to keep spending millions of dollars in its legal fight against the PIF while increasing purse sizes to combat players defecting to the LIV Golf League.
“We cannot compete with a foreign government with unlimited money,” Monahan reportedly told employees. “This was the time. We waited to be in the strongest possible position to get this deal in place.”
The report states Monahan told Tour employees the model wasn’t sustainable. The PIF has a reported $620 billion in assets. This meeting came two days after the announced deal to form a new for-profit entity.
Monahan reportedly told employees the Tour had spent $50 million in legal fees and dipped into reserves for $100 million to pay increased purses in designated events and other bonuses.
A PGA Tour spokesperson provided a statement to ESPN, saying: “To characterize that this agreement was made due to litigation costs and other use of reserves is an oversimplification. With the end of the fractured landscape in the world of men’s professional golf, the PGA Tour has never been a more valuable property.
RBC Canadian Open: Photos
“The Public Investment Fund has recognized that value and the opportunity for [return on investment] with their investment in the tour. Additionally, this transaction will make professional golf more competitive with other professional sports and sports leagues.”
The agreement ended all legal disputes between PIF and the PGA Tour.
During Tuesday’s PGA Tour players’ meeting in Toronto, Tour pros called PGA Tour commissioner Jay Monahan a hypocrite and said it was time for new leadership. The latter remark drew a standing ovation.
“Jay took the arrows, took the hit, he got lambasted and was burned in effigy, but is he going to lose his job? No,” a former Tour executive told Golfweek on Friday.
The PGA Tour’s 2023 season continued as is come Thursday, with the RBC Canadian Open continuing Saturday before the USGA’s U.S. Open in Los Angeles next week. The LIV Golf League’s season, which has seven events remaining in 2023, is expected to finish this year, too.
Further details on the merger are to be determined.