Structured Merger Between PGA Tour and LIV Golf: A Comprehensive Guide

PGA Tour and Saudi-Backed LIV Golf Plan to Merge Commercial Operations

Agreement Details

The PGA Tour, Saudi Arabia Public Investment Fund, and Europe's DP World Tour have agreed to merge their commercial operations and create a for-profit subsidiary of the PGA Tour. The new entity will manage commercial assets for all of the tours, while the PGA Tour will handle competitions. The tour will retain a permanent controlling interest in the new entity's board of directors, and PIF will be a non-controlling minority investor, investing billions into the entity. Valuation of the assets has yet to be negotiated and was not included in the agreement, which was dated May 30.

Controversy and Criticism Surrounding LIV Golf

LIV Golf and other sports investments backed by the Saudi crown prince, Muhammed bin Salman, have been accused of using sportswashing to improve the country's image and divert attention from human rights violations. Since LIV's launch in 2022, the organization has been mired in controversy and criticism.

Antitrust Claims and Lawsuits

LIV and the PGA Tour have filed antitrust claims against each other. LIV accused the tour of anticompetitive practices and stifling competition, while the PGA Tour countered that LIV was doing the same. The tentative agreement will terminate all litigation between the two organizations.

Next Steps and Senate Hearing

The Senate Homeland Security Committee's permanent subcommittee on investigations will hold a hearing to examine the proposed deal and the "risks associated with a foreign government's investment in American cultural institutions." The PGA Tour executives, including player directors, will have to sign off on an eventual definitive agreement, negotiations are still ongoing.
In conclusion, the PGA Tour and Saudi-backed LIV Golf merging commercial operations will significantly impact the golf industry. The establishment of a for-profit subsidiary of the PGA Tour will allow the newly created entity to manage commercial assets for all tours while the PGA manages competitions. The controversy surrounding the Saudi crown prince's involvement with LIV Golf has been widely criticized for sportswashing and the diversion of attention from human rights violations. This merger could further add to the criticism unless the parties involved demonstrate transparency and commitment to ethical values. The antitrust claims and lawsuits filed against each other by both parties could have hindered the progress of the merger, which may have a ripple effect on the golf industry. However, the tentative agreement will terminate all litigation. Overall, the outcome of the Senate hearing and negotiation by PGA Tour executives will determine the success of the merger. While the newly created entity could offer new opportunities for businesses in the golf industry, navigating the potential PR implications may pose a challenge.