PGA Tour and Saudi-backed LIV Golf agree to shock merger

Investing

The PGA Tour and LIV Golf—the new Saudi-backed professional golf tour—have agreed to merge, ending a bitter rivalry after the competitors spent months marred in tense legal battles.

NORTH PLAINS, OREGON – JULY 02: (L-R) Pat Perez, LIV Golf commissioner Greg Norman, Talor Gooch, Dustin Johnson, and Patrick Reed pose with the trophy after winning the team title at the LIV Golf Invitational – Portland at Pumpkin Ridge Golf Club on July 02, 2022 in North Plains, Oregon. (Photo by Steve Dykes/Getty Images)

Key Takeaways

PGA Tour and LIV Golf signed an agreement to combine the commercial businesses and rights into a new company that will have its own name.
The agreement, which ends all pending litigation, creates “a new, collectively owned, for-profit entity,” according to the announcement.
The PGA will control the majority of the new board, according to the announcement, but the governor of the Public Investment Fund—the Saudi wealth fund that runs the LIV—will serve as chairman.
The PIF, the Saudi wealth fund, will have “the exclusive right to further invest in the new entity,” the press release said, adding the PIF will be able to refuse any capital invested in the new entity, including into the PGA Tour, LIV Golf and European-based DP World Tour.

What We Don’t Know

While both the PGA Tour and LIV Golf will be invested in the new entity, it’s unclear how much the Saudis themselves will invest, though Public Investment Fund governor Yasir Al-Rumayyan suggested in an interview with CNBC the total will be in the billions of dollars.

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Key Background

With the help of billions of dollars from the Saudi investment fund, LIV broke onto the golf scene in 2022 as a direct competitor to the PGA Tour. That money helped the new golf entity lure some of the PGA Tour’s best known golfers and a lengthy, messy fight ensued. The PGA has dominated the golf scene for years, and LIV posed a challenge to that control.

Eventually, the PGA Tour barred its members from playing in LIV events which ultimately caused some of its winningest golfers—including Phil Mickelson and Dustin Johnson—to be suspended.

A number of LIV golfers, including Mickelson, then sued the PGA for violating antitrust law. Despite the public back-and-forth, LIV has persisted. Earlier this year, LIV Golf held its first American televised tournament on the CW.

Contra

Since its inception, LIV has face stark criticism over it’s alleged “sportswashing.” Many claim Saudi Arabia’s sudden involvement in golf is an attempt to distract from the country’s many human rights violations.

Among the many examples cited by opponents of LIV is the purported role of Crown Prince Muhammad bin Salman in the 2018 murder of Washington Post journalist Jamal Khashoggi.