Miami, United States — The PGA Tour announced a shock merger with the Saudi-backed LIV Golf circuit on Tuesday, rocking the golfing world with a bombshell deal aimed at ending the sport’s bitter two-year civil war.
In a stunning agreement that took the sport completely by surprise, the US-based PGA Tour and Europe’s DP World Tour said they had signed an agreement with LIV’s Saudi backers that will lead to the formation of “a new collectively owned, for-profit entity.”
“After two years of disruption and distraction, this is a historic day for the game we all know and love,” said PGA Tour commissioner Jay Monahan.
The PGA Tour along with the LPGA Tour, and the European Tour is the most famous Golf governing bodies in the world.
The PGA Tour, however, is the most prestigious golf tour in the world. It is home to the best male golfers in the world, and it offers the richest prize money.
All about the PGA Tour-LIV Golf merger What is LIV Golf? LIV Golf was established in 2022 by Saudi Arabia's Public Investment Fund (PIF) along with renowned players like Phil Mickelson and Greg Norman. Mickelson played a crucial role in its formation, accusing the PGA Tour of not compensating players fairly for media rights. He successfully persuaded 48 players to leave the PGA Tour for LIV. Why did the PGA Tour bar players from participating in LIV Golf? The PGA Tour saw LIV Golf as a direct competitor, often referred to as a “breakaway league.” This perception led to the Tour forcing players to choose between the two, causing significant divisions in the golf world. Why is the PGA Tour merging with LIV Golf now? Continuous legal battles and disagreement proved detrimental for the PGA Tour's business, leading to the decision to merge with LIV Golf despite initial opposition. The merger's goal is to unify the efforts of both organizations for a greater impact on the game. How will this merger impact the financial aspects of both organizations? Exact terms of the merger are not disclosed. However, LIV Golf players were reportedly promised eight- and nine-figure earnings, backed by the Saudi Public Investment Fund. The PIF also plans to invest "billions" into the newly formed entity while maintaining a minority stake. Will this merger affect major golf events? No. Major golf events like The Masters, the U.S. Open, The Open, and the PGA Championship are all separate entities from the PGA Tour and won't be directly affected by the merger. Have there been mergers in professional sports before? Yes. All four of North America's major professional team sports leagues have experienced mergers, such as the NFL-AFL union that led to the Super Bowl. However, the PGA Tour-LIV merger is unique due to its geopolitical implications. What are the potential benefits of the merger for the PGA Tour? The merger with LIV Golf could bring several benefits for the PGA Tour: Increased revenue: With LIV Golf's financial backing, the PGA Tour could see increased prize money for players and increased revenue for the tour itself. Increased global reach: LIV Golf has a global reach that the PGA Tour does not currently have. The merger could allow the PGA Tour to reach a wider audience and grow its fan base. Reduced rivalry: The merger could end the rivalry between the PGA Tour and LIV Golf, allowing both organizations to focus on growing the game of golf, rather than competing against each other. What are the potential challenges of the merger for the PGA Tour? The merger presents several potential challenges for the PGA Tour: Player defections: Some top players have already defected to LIV Golf. The merger could lead to more player defections, potentially weakening the PGA Tour. Fan backlash: Some fans have expressed criticism of the PGA Tour's decision to merge with LIV Golf. This backlash could harm the tour's image and revenue. Regulatory scrutiny: The merger could face scrutiny from governments around the world, which might delay or even derail the merger.
LIV Golf was launched in October 2021 and lured top PGA Tour talent with record $25 million purses and money guarantees, bankrolled by Saudi Arabia’s Public Investment Fund (PIF).
The PGA Tour responded by banning LIV players while the DP World Tour has handed out heavy fines to its players.
The rift had led to a series of lawsuits and caused acrimony between players such as major winners Phil Mickelson and Brooks Koepka, who signed lucrative deals with LIV.
Tuesday’s deal ends all litigation between the feuding parties, although many other details of the landmark deal remain to be disclosed.
The merger was given swift backing by six-time major winner Mickelson, the most prominent of the players who joined LIV Tour.
“Awesome day today,” tweeted Mickelson above a link to a news story on the merger.
But PGA Tour players were caught cold by the announcement, before later accusing Monahan of “hypocrisy” for joining forces with LIV after spending much of the past year urging players to resist the riches on offer.
US media reported that Monahan was confronted by furious players at a meeting in Toronto on Tuesday ahead of this week’s Canadian Open.
“I recognize that people are going to call me a hypocrite,” Monahan said later on a conference call, but added that “circumstances do change.”
The name of the new merged entity and the precise structure of the tours has yet to be announced, but the PGA Tour said that the parties had agreed to “establish a fair and objective process for any players who desire to re-apply for membership with the PGA Tour or the DP World Tour following the completion of the 2023 season”.
The Board of Directors of the new commercial entity will have the Saudi PIF governor Yasir Al-Rumayyan as chairman and Monahan as Chief Executive Officer.
Divisive Norman absent
There was noticeably no mention of LIV chief executive Greg Norman in the statements. Norman’s combative approach to the conflict had seen him recently snubbed by Augusta National who did not offer him an invite to April’s Masters tournament.
In November, McIlroy, who was the most prominent backer of the PGA Tour amongst the players, said that Norman was an obstacle to any deal between the two parties.
“I think Greg needs to go. I think he just needs to exit stage left,” said the Northern Irishman. “No one is going to talk unless there’s an adult in the room that can actually try to mend fences.”
It was unclear if the announcement would impact LIV’s current season. The tour’s next event is on June 30 at Valderrama in Spain. The PGA Tour statement said that the team element, introduced by LIV, would be part of the future plans.
“Today is a very exciting day for this special game and the people it touches around the world,” said Al-Rumayyan.
“We believe there are opportunities for the game to evolve while also maintaining its storied history and tradition. This partnership represents the best opportunity to extend and increase the impact of golf for all.”
The announcement comes as Saudi football clubs are poised to make a series of major investments, backed by PIF, to sign big-name players.
On Tuesday, Real Madrid’s Ballon d’Or winner Karim Benzema signed for Saudi Arabia’s Al-Ittihad for three years starting next season, the Jeddah-based club confirmed.
Benzema will join his former Real Madrid teammate Cristiano Ronaldo in the Gulf kingdom.
Offer to Woods, McIlroy
ESPN reported on Tuesday that two of the PGA Tour’s biggest stars — Tiger Woods and Rory McIlroy — were also not informed of the deal in advance.
Woods is reported to have turned down an offer in the region of $800 million to join LIV last year, while McIlroy is reported to have rejected a $400 million offer to switch circuits.
McIlroy, arguably the most vocal opponent of LIV amongst the PGA Tour’s players, is playing at the Canadian Open this week.
LIV Golf
Since its founding in 2021 by Greg Norman, the LIV Golf tour is designed to be a more modern and exciting alternative to the PGA Tour, with shorter events, no cuts, and guaranteed prize money. LIV Golf has already attracted a number of high-profile players, including Dustin Johnson, Phil Mickelson, and Bryson DeChambeau.
LIV Golf has said the tour will help to grow the game of golf and provide opportunities for new players.
The first LIV Golf event was held in June 2022 at the Centurion Club in London. The tournament was won by Charl Schwartzel, who received a prize of $4 million. LIV Golf has scheduled a total of 14 events for the 2022-2023 season, with tournaments taking place in the United States, Europe, and the Middle East.
Liv Golf offered significantly higher prize money than the PGA Tour. The average purse for a Liv Golf event is $25 million, compared to $1.5 million for a PGA Tour event.