It’s official. After weeks of speculation, the PGA Tour has announced a partnership with the Strategic Sports Group (SSG), a consortium of investors and sports franchise owners, to infuse $3 billion into the Tour. This agreement will establish PGA Tour Enterprises, a commercial venture under PGA Tour’s control. Players will have equity in the new company, marking a historic first for the PGA Tour.
The investment from SSG will entitle players on the Tour to $900 million in equity shares, with higher-ranked players receiving a larger share. Meanwhile, the PGA Tour continues negotiations with Saudi Arabia’s Public Investment Fund, the entity behind the breakaway tour Liv Golf, in hopes of forming a collaboration.
Cover prize money for five years
SSG’s investment will help address the spiraling costs the PGA Tour has incurred and expects in the coming years due to Liv Golf’s substantial prize increases. This has led to the PGA Tour needing to raise prize money to retain its star players, creating a problematic trajectory that this partnership aims to rectify.
As per the agreement, SSG’s investment will cover all Tour event prize money for the next five years. This was necessary as the increased prize money has led to several existing sponsors withdrawing from future seasons due to the heightened costs.
SSG now part of PGA Tour’s board
The agreement also grants SSG a presence on the Tour’s board, giving the investment group a voice in the Tour’s future direction, including potential Saudi investment.
“Today’s transaction allows for a co-investment from the Public Investment Fund in the future, subject to all necessary regulatory approval,” the Tour stated in a press release.
SSG, led by Fenway Sports Group and featuring multiple established professional sports owners, theoretically helps allay concerns from the federal government regarding potential antitrust issues with the Tour-PIF agreement. SSG’s investment will likely reduce the Tour’s reliance on the PIF and its billions.
With this new partnership, the PGA Tour, previously a non-profit organization since its inception, will now operate as a for-profit organization.
