Decision Made One Year After LIV Launch... PIF's Exclusive Investment in New Corporation
Saudi's 'Sports Washing' Controversy Likely to Continue
LIV Golf, sponsored by the U.S. Professional Golfers' Association (PGA) Tour and Saudi Arabia's Public Investment Fund (PIF), announced on the 6th (local time) that they will merge. Despite LIV Golf facing criticism for so-called 'sports washing' of Saudi Arabia's human rights issues, the merger was announced just one year after its launch, causing a global stir.
◆ Formation of a new corporation... "PIF to be the sole investor"
According to Bloomberg News and others, the PGA Tour, PIF, and DP World Tour (formerly the European Tour) issued a joint statement on the day, announcing "a groundbreaking agreement to unify the sport of golf worldwide." The three organizations stated, "We have agreed to transfer PIF's golf-related commercial rights, including LIV Golf, combined with the commercial rights of the PGA Tour and DP World Tour, to a new jointly owned for-profit corporation," adding, "The new corporation will provide competition among the world's top players."
The merger process is expected to take several weeks. The new corporation's board will have PIF President Yasir Al-Rumayyan as chairman and Jay Monahan, PGA Tour Commissioner, as CEO. Additionally, PGA directors Ed Hurley and Jimmy Dun will be included in the board's executive committee.
Furthermore, PIF will be the sole investor in the new corporation formed by the PGA Tour, LIV Golf, and DP World Tour. Although reports suggest that PIF will invest billions of dollars in the new corporation, specific deal terms have not been disclosed. The three organizations explained, "The new corporation, whose name has not yet been decided, will grow the business and attract more fan engagement."
As part of this agreement, the PGA Tour and LIV Golf will withdraw all ongoing lawsuits.
◆ PGA Tour, which had blocked players moving to LIV, mentions possibility of return
Thus, LIV Golf and the PGA Tour, which had been rivals, have become partners. LIV Golf, which held its first tournament in June last year, had conflicts with the PGA Tour before and after its launch. Legal disputes arose over player participation, golf leagues, TV broadcasting, and sponsorship issues.
As LIV Golf attracted key players from the PGA Tour, the PGA Tour banned players who moved to LIV from participating in its tournaments. Additionally, players who transferred to LIV Golf were barred from major men's golf team events such as the Ryder Cup and Presidents Cup. In fact, PGA Tour Commissioner Monahan, Tiger Woods (USA), and Rory McIlroy (Northern Ireland) had referred to players who moved to LIV as 'traitors' or 'demons,' intensifying the conflict.
However, through this agreement, the three organizations stated, "After the conclusion of the 2023 season, we will cooperate to provide an objective and fair process for players wishing to reapply for membership in the PGA Tour or DP World Tour," opening the possibility for players who left for LIV to return.
Bloomberg assessed, "This agreement signifies a victory for Saudi Arabia, which supported LIV Golf through PIF," adding, "Saudi Arabia can now leverage its oil resources to increase global influence and have a significant voice in major sports sectors."
◆ "PIF President persuaded PGA Tour executives behind the scenes for a 'win-win' outcome"
Bloomberg, citing sources, reported that this agreement resulted from the active behind-the-scenes efforts of PIF President Yasir Al-Rumayyan, a golf enthusiast known as the 'Saudi royal family's treasurer.'
At the end of April, Al-Rumayyan first met with PGA directors Hurley and Dun in London, UK, for discussions. Subsequently, Hurley accompanied PGA Tour Commissioner Monahan to meet Al-Rumayyan in Venice, Italy. It is said that this was the first meeting between Monahan and Al-Rumayyan.
After opening the dialogue, both sides conducted final negotiations at offices in San Francisco, USA, and the Four Seasons Hotel, culminating in a final agreement during the Memorial Day weekend in late May.
During the negotiation process, Al-Rumayyan persuaded the PGA Tour side that combining forces rather than competing would benefit everyone. Although LIV Golf secured star golfers like Phil Mickelson and Brooks Koepka, it struggled to secure TV broadcasting and sponsorship deals. Meanwhile, the PGA Tour was seeking ways to attract younger audiences as its main viewer demographic aged, Bloomberg explained.
The New York Times (NYT) reported that the PGA Tour Policy Board, composed of five independent directors and five golfers, was unaware of the details during the negotiation process, as admitted by Commissioner Monahan. Accordingly, NYT stated that the agreement between the PGA Tour and LIV Golf requires final approval voting by the Policy Board.
◆ 'Sports washing' controversy continues... 9/11 victims' families call it a "betrayal"
CNN described the agreement as a "shocking announcement." Given that the 'sports washing' controversy surrounding Saudi Arabia was significant when LIV Golf launched and the PGA Tour had strongly criticized it, the decision to merge so abruptly is considered unprecedented.
At LIV Golf's launch, there was an interpretation that the Saudi royal family was hosting and sponsoring large-scale non-political sports events to cleanse its deteriorated image related to dictatorship, media suppression, and human rights violations. Notably, Crown Prince Bin Salman, regarded as Saudi Arabia's de facto ruler, was implicated in investigations by the U.S. Central Intelligence Agency (CIA) regarding the murder of Saudi journalist Jamal Khashoggi.
Before launching LIV Golf, PIF, for which Crown Prince Bin Salman is the fund manager, acquired the English Premier League football club Newcastle United in October 2021. Recently, Saudi Arabia attracted global football stars Cristiano Ronaldo and Lionel Messi to its domestic football league and is reportedly considering hosting the 2030 FIFA World Cup.
This decision is expected to prolong the controversy over Saudi Arabia's sports washing.
In response to the announcement by the PGA Tour, LIV Golf, and DP World Tour, a group representing families of the victims of the September 11, 2001 terrorist attacks strongly criticized the move. Fifteen of the 19 hijackers involved in the 9/11 attacks were Saudi nationals. This group had sent an open thank-you letter to remaining PGA Tour players in June last year. The group stated, "The PGA Tour management should be ashamed of their hypocrisy and greed," adding, "We have been betrayed by Commissioner Monahan and the PGA. Their concern was merely to dress up their pursuit of money."
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