The end of year deadline for the PGA Tour and Saudi-backed LIV Golf to finalize their historic merger is likely to be pushed back as US regulators dig their heels in and players demand more power in the new entity.
(Bloomberg) — The end of year deadline for the PGA Tour and Saudi-backed LIV Golf to finalize their historic merger is likely to be pushed back as US regulators dig their heels in and players demand more power in the new entity.
The deal is far from complete as the golf circuits respond to a range of issues including a US Justice Department probe over antitrust concerns and talks with PGA Tour players on how much control they will have over the new league, according to people familiar with the matter who asked not to be identified because of the private nature of the discussions.
PGA Tour golfers are deeply involved in negotiations and are looking to gain control in the new entity formed by the proposed tie-up, the people said. A potential deal deadline delay would mean LIV and the Tour would continue on their own separate tour schedules next year until the agreement is sealed, they said, adding that a deadline extension hasn’t been finalized.
PGA Tour and LIV have to also navigate a range of other concerns before closing the deal, including figuring out financial details of PIF’s investment and the fate of contracts with broadcasters and brand sponsors. There isn’t a specific issue setting the pace of discussions as it’s a complex negotiation, one of the people said.
The PGA Tour announced a shock merger with LIV and DP World Tour in June, after a bitter legal battle between the rivals over some of the biggest names in golf had captivated fans and split players. A May 31 framework agreement, which laid out the proposed new leadership structure but offered scant financial details, is poised to expire as soon as they agree on definitive terms, or on Dec. 31, if they fail to do so.
The deal, which will be bankrolled by Saudi Arabia’s Public Investment Fund, has drawn skepticism from US lawmakers despite assurances by PGA Tour representatives that PIF would be only a minority investor in the combined entity. The Justice Department, which had already been investigating the Tour and LIV’s antitrust dispute, is reviewing the proposed tie-up, adding another obstacle to the deal.
The PGA Tour declined to comment. LIV didn’t respond to a request for comment.
Why PGA Tour’s Nonprofit Status Matters for LIV Deal: QuickTake
Players’ Demand
Having PGA Tour players at the helm will be crucial as the deal can’t be finalized until the golf circuits land on terms that would provide middle ground to appease the Tour’s golfers burned by the merger and forge a path to bring LIV golfers back to the Tour.
PGA Tour players, who are being advised by investment bank Raine Group, are driving negotiations, the people said. That’s in stark contrast to the tentative pact that came together after secret talks between a small group of high-ranking PGA Tour officials and PIF’s chief, Yasir Al-Rumayyan, without player participation.
The discussions are not over compensation, the people said. Granting equity isn’t being considered to necessarily reward players, including Tiger Woods and Rory McIlroy, who spurned lucrative offers to switch allegiances to LIV, but to ensure the PGA Tour player members at large have a share in the new entity, they said.
Raine Group declined to comment.
A PGA Tour player uproar after the surprise merger announcement led to significant changes at the US tour that have opened the door for golfers to partake in negotiations. Woods was added to the PGA Tour board of directors in August, joining other players McIlroy, Patrick Cantlay, Charley Hoffman, Peter Malnati and Webb Simpson who now outnumber independent directors.Â
LIV, backed by its deep-pocketed funder, offered millions of dollars to poach some top-ranking players, including Phil Mickelson and Brooks Koepka, from its elite US rival. The two organizations had been warring in court and in public, with the PGA Tour accusing LIV of using sports to steer attention away from Saudi Arabia’s human-rights record.
In July, the two parties agreed to drop a provision that forbids poaching of golfers, at the behest of the DOJ. The clause was a stop-gap measure to ensure that such defection would stop until a final deal was sealed.
Read More: PGA, LIV Axe Anti-Poaching Term at Justice Department Urging
Coming soon: Sign up for Bloomberg’s Business of Sports newsletter for the context you need on the collision of power, money and sports, from the latest deals to the newest stakeholders. Delivered weekly.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.