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The PGA Tour and the Saudi sovereign wealth fund are struggling to resolve differences over an investment tie-up originally announced in June, with negotiations set to drag into next year.
The so-called framework agreement unveiled in June between the PGA Tour and the Public Investment Fund, which owns LIV, set a deadline of year-end for reaching a deal to unite golf under a single commercial entity.
However, the December 31 deadline was increasingly unlikely to be met and the talks extended due to several hurdles, according to people familiar with the matter. Three of the people said one possible outcome was a broader deal involving other investors coming in alongside PIF. Another conceded that “things have been moving along very slowly”.
Big sticking points in the negotiations include how to compensate PGA Tour players who stayed loyal and turned down bumper pay deals from LIV, and reluctance among PGA Tour players to participate in LIV-style team golf.
The PGA Tour and LIV had been locked in litigation until calling the surprise truce, diffusing tensions after dozens of top golfers accepted huge pay deals to leave the PGA Tour and join LIV, a rebel tour backed by $2bn from the PIF.
This week, commissioner Jay Monahan said in a memo to players that the leaders of the PGA Tour “remain focused” on reaching a definitive agreement with PIF, and that progress had been “deliberate due to the complex nature of the process”.
The original framework agreement was settled when the PGA Tour policy board was largely made up of people from its commercial operations, but now players — including Tiger Woods — have voting control after a shake-up in August. This week, Northern Irish golfer Rory McIlroy said he was stepping down from the policy board.
The PGA Tour has also held talks with several potential US investors, including Fenway Sports Group, owner of Liverpool FC and the Boston Red Sox; Liberty Media, which controls Formula One racing, and a group of wealthy individuals dubbed the Friends of Golf, which includes KKR co-founders Henry Kravis and George Roberts.
Raine Group, the merchant bank, is advising the PGA Tour players. It is unclear whether outside investors would participate alongside the PIF or separately.
Monahan said in his memo that after receiving a number of “unsolicited” proposals from other investors, the tour plans to continue talks with a narrowed down list of parties. “This is an important part of the process, allowing us to focus on the most attractive bids and the long-term value creation for you and the tour”, he told players.
The PIF and the PGA Tour declined to comment.
The original peace deal between PIF and the Tour shocked the world of golf, and provoked a fierce backlash from lawmakers in Washington. Several investigations have been launched into the tie-up to look at issues ranging from antitrust concerns to national security issues and the PGA Tour’s charitable tax treatment.
Additional reporting by Sujeet Indap and Antoine Gara in New York
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