Unveiling Opportunities: What the PGA Tour and Liv Tour Merger Means for Golfers

The announced merger of the PGA Tour and LIV Golf sent shockwaves through the sports world last month.  After two years of aggressive posturing and threats by both sides, the announcement that all was now copacetic came seemingly out of nowhere.  For months, the only reasonable outcome felt like a zero-sum result where the “winner” would take all and the loser would be left in ruin. 

In an effort to protect its dominant position in professional golf and decades-long legacy, the PGA Tour unveiled sweeping changes at the end of the 2022 season that resulted in much larger tournament purses and an event schedule that would bring the Tour’s best players together more frequently.  It was a win-win for players and fans.  More money for the players and bigger, better events for fans.

LIV Golf on the other hand, after debuting to much fanfare and hype, was showing signs of being stuck in neutral.  The team golf concept that is central to the LIV’s model has struggled to catch on with fans and the upstart tour has struggled to find top-tier sponsors and television opportunities.  LIV Golf, financed by Saudi Arabia’s sovereign wealth fund known as the Public Investment Fund (PIF), staged its first tournament in June 2022 after spending hundreds of millions of dollars to lure some of golf’s biggest names to join its ranks.  Players like Phil Mickelson, Dustin Johnson, Brooks Koepka, and Cameron Smith collected huge sums by agreeing to make the jump.  Saudi Arabia’s controversial human rights and corruption history immediately made the LIV Tour a topic of heated debate.  Golf purists and PGA Tour backers were disgusted by the Saudi’s attempt to “sports wash” their public image through golf and some of the game’s most celebrated figures’ willingness to go along for the ride.

Given the circumstances, it’s no surprise that the last 15 months or so have been the most contentious period in the history of professional golf.  And with that as the backdrop, last month’s announcement of a pending merger between the PGA Tour and LIV Golf was nothing short of shocking.

This article will explore what the PGA Payout could mean for players going forward.

The framework of the deal

Before we discuss how the deal will impact the players, we need to address the framework of the merger.  Firstly, the announcement appeared to be rushed and fairly incomplete.  There remains much to be ironed out in terms of details and how the sides will actually come together.  From what we know so far, the PGA Tour LIV Golf merger will combine each side’s assets into a yet-to-be-formed new entity.  The legacy PGA Tour will remain a non-profit entity and retain full control of the operational oversight of tournaments and how they are run and managed.  However, all of the PGA Tour’s commercial properties and business rights would be folded into the new for-profit entity (“NewCo”).  The Tour’s commercial properties include its television rights which are the big dollar item in all of this.  Also held inside of NewCo will be all of LIV Golf’s assets and the assets of the DP World Tour (also referred to as the European Tour) which is the international counterpart to the PGA Tour.

NewCo’s board of directors will be governed by Yasir al-Rumayyan, the current director of LIV Golf and the governor of Saudi Arabia’s Public Investment Fund.  The remainder of the board will be composed of existing PGA Tour executives and the PGA Tour will hold a majority voting interest over the board, effectively giving it control of all decisions.

Roughly speaking, these are the most concrete details released to the public so far.  The various parties involved are now in the process of determining and valuing each side’s existing assets so as to establish an initial valuation of the for-profit NewCo.  That valuation will then determine PIF’s initial investment in the new entity and what each side’s stake will be worth.  Everything else at this point is nothing more than speculation and hearsay and that includes how it will impact players from the PGA Tour and LIV Golf.

What Does the PGA Tour LIV Golf Merger Mean for Players?

At this juncture, the best answer is we don’t know.  When news of the PGA Tour LIV Golf merger was first announced on June 6th, it was quickly apparent that all players were kept in the dark and knew nothing about the advanced stages of any negotiation.  Key PGA Tour players like Rory McIlroy and Tiger Woods were not notified of what was going on behind the scenes and learned of the news on a similar timeline to the rest of us.  As the news arrived on the morning of June 6th, supporters of each side, despite their shock and severe lack of facts, quickly dug in and claimed victory and PGA Payout.  

Yet as details began to trickle out, it became apparent that players and supporters from the LIV Golf side viewed this as vindication while PGA Tour pros and fans were angered and blindsided by the news.  How could Jay Monahan and PGA Tour leadership explain this about-face to players who stayed loyal to the PGA Tour when LIV Golf was waving, in some cases, hundreds of millions of dollars at them as a recruitment tool?  How would those players be made whole?  And what of the players that jumped ship and took the big PGA Payout? Would they just be allowed back on the PGA Tour now?  So far the answers to these questions haven’t been well thought out or convincing and surely they will need to be addressed by PGA Tour leadership.

McIlroy, for instance, who is one of the most important players in the game, had been extremely vocal in his support for the PGA Tour and anti-LIV Golf for the last two years.  He could not go to a single tournament or press conference without facing questions about the rival tours and he was always steadfast in his support of the PGA Tour.  What measures will be taken to recognize players of McIlroy’s caliber and the support they provided the PGA Tour when things had started to look quite bleak?

 

Hopefully, those matters will be sorted out in a fair manner with time.  On a more optimistic note, the merging of the rival tours could reap huge benefits for players and fans alike in the years ahead.  If we can take the PGA Tour and LIV Golf/PIF at their word, and that is a very big “if”, each side gets the outcome they’ve sought all along.  The PGA Tour remains the dominant name in professional golf, gets an almost unlimited bankroll, and shuts down the wildly expensive legal battles they were fighting.  LIV Golf and PIF accomplish their goal of getting a seat at the main table in another professional sport (they are also highly involved in professional soccer, auto racing, and horse racing) further diversify their investments, and attempt to better their country’s image. 

If each side gets what they want, players will surely feel the benefits as well.  It is likely that event purses will grow even bigger, their opportunities for commercial appeal and exposure will multiply as the game grows more global, and they could see new forms of compensation like contracts and guarantees especially if LIV Golf’s team component survives in some fashion. Stay tuned.