The PGA Tour and the Strategic Sports Group have reached an agreement that will see SSG, a consortium of investors and sports franchise owners, infusing up to $3 billion into the Tour. The agreement will result in the launch of PGA Tour Enterprises, a commercial venture under the PGA Tour's control. Players will have equity in the new company, a first in the PGA Tour's history.
The initial investment will also entitle players on the Tour to over $1.5 billion in equity shares, according to the Tour, with higher-ranked players receiving larger shares. Meanwhile, Tour officials indicated that the widely anticipated agreement with the Saudi Arabian Public Investment Fund, the financial backers of breakaway tour LIV Golf, is still being subjected to regulatory scrutiny.
The SSG investment helps address the spiraling costs the PGA Tour has incurred and anticipates in coming years, largely as a result of trying to maintain pace with a Saudi-backed challenge to the Tour's operations. LIV Golf, bankrolled by Saudi Arabia's Public Investment Fund, has spent the last two years both enticing players away from the Tour and forcing the Tour to increase its own purses. The result was an unsustainable trajectory for the Tour, which found itself in a financial arms race with the PIF's hundreds of billions of available wealth.
SSG's investment will help address what was shaping up to be a substantial challenge for the Tour. Even as the Tour dramatically increased purses, particularly for its "signature" events, longtime sponsors such as Wells Fargo, Honda and Farmers Insurance are severing their ties to the Tour.
The agreement gives SSG a presence on the Tour's board, giving the investment group a voice in the future direction of the Tour, whether toward Saudi investment or elsewhere. "The transaction announced today allows for a co-investment from the Public Investment Fund (PIF) in the future, subject to all necessary regulatory approval," the Tour said in a news release.
Still unresolved is the status of the Tour's agreement with the PIF, announced last June. The two entities had agreed to drop all litigation and work together to develop a framework for the future of professional golf, but a self-imposed deadline of Dec. 31 came and went without anything more than assurances that an agreement was still on the way.
SSG is an external investment collective headed by Fenway Sports Group and featuring multiple established professional sports owners, including Red Sox owner John Henry, New York Mets' owner Steve Cohen and Atlanta Falcons' owner Arthur Blank. The investment from SSG will theoretically help assuage the federal government's concerns that the Tour-PIF agreement would run afoul of antitrust rules. SSG's investment will most assuredly ease the Tour's potential dependence on the PIF and its billions.
However, the investment does not — at present — do anything to bridge the gap between the Tour and LIV Golf.
The overarching issue for the entire sport is that golf, for all its outsized popularity among certain demographics, remains a niche sport. Last year's final round of the Masters, where Jon Rahm claimed his first green jacket, drew 12.06 million viewers — the highest golf ratings in five years, but substantially less than most regular-season NFL games.