The PGA Tour board, which met in the same room for the first time since some members negotiated a deal with Saudi sovereign wealth funds to reshape golf, said Tuesday it intends to push ahead with the deal over protests. showed that. It stretches from the clubhouse locker room to the Capitol.
At the same time, however, it became clear that the deal was far from certain.
As expected, the board did not vote on a deal that contained interim terms that would require a mesh of golf businesses, including the Tour, the Saudi-backed LIV golf circuit and the European Tour, now known as the DP World Tour. I will join a new company. The company is expected to be well-funded in Saudi Arabia, but is currently under the routine control of PGA Tour leaders. But executives hope a regular board meeting, which will formally consider the deal only after final terms are negotiated, will help stabilize the tour’s course amid continuing internal divisions and turmoil in global oversight. bottom.
Executives and board members know that period can last for months.
In a carefully worded statement on Tuesday night, Tour executives said, “We have decided to take a series of steps to determine whether the Tour can reach a final agreement that is in the interests of our players, fans, sponsors, partners and players. We have started a new phase of negotiations.” the game as a whole. “
The board was wary of further alienating the players who make up the Tour, some of whom were blinded and enraged by the news of the deal, but said: “The PGA Tour will certainly take the lead. We are fully committed to the security measures of the framework agreement that holds the Maintain control of this potential new commercial entity. “
A board meeting was held three weeks after the accord’s surprise announcement, and a five-page copy of the framework accord was handed over to a Senate subcommittee the day after the visit. Signed at the Four Seasons Hotel in San Francisco in the early hours of May 30, the interim agreement capped seven weeks of confidential negotiations, but most notably contained few binding commitments. There weren’t any, and there were still many important details left. Please be organized.
The Tour and Wealth Fund are expected to invest in a golf business like LIV in the new company, but the deal’s makers signed a framework agreement too early, so valuations were not included and completed ahead of time. doesn’t seem to The agreement does not quantify the wealth fund’s expected investment in the new company, but outlines its leadership and protects the investment rights of Saudi funds.
Its few binding clauses include a non-disrespectful pledge covering tours and wealth funds (but not players) and a truce clause to prevent rival circuits from soliciting golfers from each other. Unless a final agreement is reached by the end of the year, the Tour and Wealth Fund can “get back into business” without any financial penalties, such as dissolution fees, except for mutual extensions.
Board approval is not a guarantee that the agreement will continue. Among the government officials investigating the deal are antitrust regulators from the Justice Department, who may ultimately seek to block the deal. The deal is set to be scrutinized in the Capitol next month, with a Senate subcommittee scheduled for a hearing on July 11.
But Tuesday’s meeting was deemed pivotal to the future course of action for the tour and its 11-member board, which includes five prominent figures in business, law and finance. Only two board members, Edward D. Herlihy and James J. Dunn III, were involved in the negotiations that led to the transaction, with many board members in negotiations underway. didn’t seem to know.
The board meeting, held at a Detroit-area hotel, began in the early afternoon and continued into the evening. A person familiar with the meeting, who requested anonymity, said it was a private gathering and that the meeting was not entirely focused on a deal. Rather, the board spent more time on the sport’s more technical issues, such as competition cuts and eligibility, the official said.
But most of the meeting focused on the framework agreement, with board members briefed by Tour bankers on how they were going to assign value to the circuit’s various assets. PGA Tour Commissioner Jay Monaghan was absent from the meeting in Dearborn. On June 13, the tour announced that he was taking time off to recover from an unspecified “medical condition.”
Board members did not comment as they left the meeting, so the statement was left untouched. Only one board member, Rory McIlroy, has publicly hinted in favor of the deal. In recent weeks, other players have said they want to know more about the deal and what it means for the Tour.
But board members have been told in recent months that the tour can’t afford to sustain a showdown with LIV. LIV is a league created with billions of dollars from Saudi Arabia’s wealth fund to lure some of the biggest stars in the game with guaranteed contracts and huge prize money. The Wealth Fund has also faced setbacks in its legal battle against the tour, and some pressure as LIV struggles to attract audiences and attention in the US for reasons other than financial support. .
But even if the deal breaks down, both sides have already secured a mutual victory. The post-tour California lawsuit was dismissed, and Wealth Fund and LIV agreed to drop the conflicting lawsuit. This dismissal was prejudiced, meaning it could not be reclaimed even if the rest of the agreement fell apart.
Because while Tuesday night’s tour statement was cautious, the dismissal of the lawsuit was mentioned in its first sentence.
