According to Front Office Sports, the CEOs of two major golf leagues are stepping down, namely Keith Pelley of the DP World Tour (the former European Tour) and Martin Slumbers of the R&A, the sport’s governing body in the UK and operator of the Open Championship.

Pelley will be replaced by the DP’s current number-two executive, Guy Kinnings, and move on to become president and CEO of Canada’s Maple Leaf Sports and Entertainment.

Slumbers will be staying aboard the R&A through the summer and has no replacement as yet.

The background

The resignations are contemporaneous with the leagues’ negotiations, alongside the PGA Tour, with Saudi Arabia’s Public Investment Fund (PIF), which is looking to invest $2 billion. Last year, the R&A became the first of golf’s top four majors to consider Saudi investment, welcoming PIF Governor Yasir Al-Rumayyan to its Open in July.

The PGA Tour has, in fact, been conducting at least two streams of negotiations. On the one hand, it has been trying to persuade Strategic Sports Group, a consortium of American pro-sports team owners, to invest $3 billion in a new LLC called PGA Tour Enterprises. On the other, it has been looking to draw into that same LLC, Saudi Arabia’s PIF, which underwrites a competitor: the LIV Golf League. Negotiations have not been smooth.

The PIF, PGA Tour and DP World Tour entered into a framework agreement on May 30, 2023, as the PIF announced on June 6. This sent what Golf Week calls “shockwaves through the golf world.” The US Department of Justice soon informed the PGA that it would be reviewing the proposed deal (see the Wall Street Journal), and the Chairman of the US Senate’s Permanent Subcommittee on Investigations wrote to both the PGA and LIV, to ask to see records, and worried “about the Saudi government’s role in influencing this effort and the risks posed by a foreign government entity assuming control over a cherished American institution” (see Golf Week).

According to the PIF’s announcement, the agreement would be “followed by a mutually agreed end to all pending litigation between the participating parties.” According to ESPN, the PGA Tour filed a federal lawsuit against LIV in the Southern District of New York in October. Less than a month earlier, the PGA had filed a countersuit against the LIV for interference with player contracts. The PGA had suspended 30 players for competing in LIV tournaments without releases.

Moreover, as the Wall Street Journal then reported, the Justice Department has, in fact, been conducting an antitrust investigation into the PGA Tour since at least 2022, precisely for its competitive dealings with LIV.

The bottom line

The value of a double deal, combining the PGA with LIV and DP, would rise from $2 or $3 billion to about $7 billion. But the double deal would also give rise to a bigger entity than the already monopolistic PGA and thus provide a bigger target for antitrust action.

The Commissioner of the PGA Tour, Jay Monahan, wrote a memorandum in late December because the framework agreement was due to expire on Dec. 31. It reads in part: “Our goal for 2024 is to reach agreements with SSG, PIF and the DP World Tour, bringing them on board as minority co-investors in PGA Tour Enterprises.”

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