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All You Need to Know About The $3 Billion PGA TOUR Investment by Strategic Sports Group

All You Need to Know About The $3 Billion PGA TOUR Investment by Strategic Sports Tour
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The golfing community was in a state of shock in June 2023 when the PGA TOUR announced a framework agreement with Saudi Arabia’s Public Investment Fund (PIF) and the DP World Tour. The plan was to form a for-profit golf entity, PGA TOUR Enterprises. The news came as a shock, considering the hostility between PGA TOUR and LIV Golf players. Still, it later emerged that the Tour commissioner, Jay Monahan, had been holding private talks with PIF Governor Yasir Al-Rumayyan. However, a much-anticipated deadline of December 31st, 2023, for the partnership to take off passed, with the involved teams requesting an extension. 

Fast forward to Wednesday, January 31st, 2024, and PGA TOUR Enterprises was officially launched, but this time with a different investor on board – Strategic Sports Group. SSG is led by Fenway Sports Group and comprises U.S.-based sports team owners, boasting extensive investment and experience across sports, entertainment, and media. The new deal will see the investment group inject $3 billion into the new PGA TOUR Enterprises venture, becoming a minority owner. $1.5 billion will be available immediately in initial equity for players, with the possibility of further investment depending on future partnerships and growth plans.

The PGA TOUR Enterprises in Detail

The PGA TOUR, as we know it, operates as a non-profit entity, donating money to local charities and offering prize money for players out of each event. Players also build up retirement benefits based on career accomplishments and longevity on tour. The newly formed PGA TOUR Enterprises, valued at around $12 billion, is a for-profit golf entity that will oversee the commercial interests of the tour. The venture will give current and future players an equity stake in the tour, making them league owners and giving them a sense of belonging. 

Around 200 golfers will receive equity grants that will vest over time, with selection based on PGA TOUR membership status, recent achievements, career accomplishments, future participation, and services. Tour players who have resisted tempting offers from the rival LIV series will thus be rewarded for their loyalty, and all members will be encouraged to stick with the tour. Tour commissioner Jay Mohanan will serve as the chief executive officer of the new venture, overseen by a 13-person board of directors comprising himself, four SSG members, seven players, and an independent director from the tour’s policy board.

Who are the Strategic Sports Group?

SSG investment group is headlined by Fenway Sports Group (the Boston Red Sox’ and FC Liverpool’s parent company) and includes other prominent American team owners. Some notable names are Marc Lasry (Milwaukee Bucks), Wyc Grousbeck (Boston Celtics), Steven Cohen (New York Mets), Arthur Blank (Atlanta Falcons), Tom Werner and John Henry (Boston Red Sox), and Marc Attanasio (Milwaukee Brewers). Former Cleveland Browns president and co-founder of Otro Capital Alec Scheiner is also part of SSG. 

John Henry is the principal owner of Fenway Sports and the manager of Strategic Sports Group. The group’s $3 billion investment in PGA TOUR Enterprises makes it a minority partner with a 25% stake. The investment group will seek to make profits by maximizing revenue for players, partners, tournaments, and other stakeholders while finding opportunities to enhance golf worldwide.

Breakdown of the $3 Billion Investment Deal

With the SSG consortium ready to inject $1.5 billion in initial grants to players, the PGA TOUR has formulated an equity distribution model to pay players $930 million across four tiers. Close to 200 Tour players will benefit, with golfers earning from one category each and grants paid out over time.

The Four Tiers:

  • Tier 1

The first group will comprise 36 top golfers who will share $750 million. The sharing criteria will be based on player impact program results, last five-year performance, and overall career performance. The player impact program rewards golfers with the largest impact on the PGA TOUR business, relying on statistics from Google search data, Nielsen brand exposure, fan engagement, and media mentions.

  • Tier 2

The second group will see $75 million divided among 64 players based on their performances in the last three years.

  • Tier 3

Fifty-seven golfers will split $30 million in the third category, provided they have earned certain fully exempt status on the PGA TOUR.

  • Tier 4

The final tier will distribute $75 million among 36 golfers whose career performance proves they were instrumental in building the modern PGA TOUR.

What Happens to The Saudi Framework Agreement?

The SSG deal with PGA TOUR Enterprises has a provision that still allows Saudi Arabia’s Public Investment Fund to invest in the new venture, subject to any necessary regulatory review and approvals. Talks are reportedly ongoing, with Monahan visiting Saudi Arabia in early January and meeting in person with Al-Rumayyan. It’s unclear how the new SSG deal will affect the ongoing PIF-PGA TOUR talks or how an investment from the Saudis would affect the current PGA TOUR and LIV seasons.

Final Thoughts

Golf continues to grow, and SSG’s $3 billion investment is music to the ears of PGA TOUR players, partners, and fans. The Tour has recently been facing financial pressure trying to increase tournament purses to keep up with the hefty LIV prize funds, but the new deal will spell hope to current PGA golfers.