• 

The golfing world was shocked on Tuesday when the PGA Tour, DP World Tour, and the Saudi-backed LIV circuit, which had been engaged in a bitter dispute dividing the sport, announced a surprising agreement to merge and create a single unified commercial entity.

As part of the agreement, the organizations stated in a joint press release that they would collaborate to establish a process for LIV Golf players to apply for membership in the PGA Tour and DP World Tour, formerly known as the European Tour, after the 2023 season.

The unexpected announcement received criticism from many PGA Tour players who were unaware of the merger. This development comes after a highly publicized exchange of harsh words, escalating tensions, and a contentious legal battle between the parties involved.

PGA Tour Commissioner Jay Monahan, who had been a vocal opponent of LIV Golf, referred to the agreement as a historic day for the beloved game, acknowledging the disruptive and distracting two-year period preceding the merger. He explained that the decision to join forces was driven by the realization that being united was more advantageous than fighting or remaining separate.

No specific details were provided regarding how the merger would affect the existing competitive golf landscape, including eligibility to compete for the Ryder Cup of that year. However, the parties confirmed that they would work together over the following months to finalize the terms of the merger.

From enemies to partners

LIV Golf, financially supported by the Saudi Arabia Public Investment Fund, has faced criticism for allegedly serving as a platform for the country to improve its international reputation amid concerns about its human rights record. Detractors have specifically highlighted the alleged involvement of the Saudi Arabian government in various human rights violations, including the murder of journalist Jamal Khashoggi in 2018 which has been at the forefront of Western criticism of the Gulf monarchy.

Although the announcement outlines a binding framework agreement, the financial aspects have yet to be determined, according to a knowledgeable source to Reuters.

Valuation work on LIV's assets will be conducted by Michael Klein & Co, while Allen & Co will evaluate the PGA Tour's assets before finalizing the merger price. The source also mentioned the presence of a mechanism in the agreement to resolve any valuation disputes.

The merger agreement also includes the termination of all ongoing litigation between the involved parties. Additionally, the Saudi Arabia Public Investment Fund (PIF) is set to further invest in the newly formed entity to facilitate its growth.

PIF is expected to put billions of dollars into the company to acquire a significant minority stake as it already owns 90% of LIV.

"Today is a very exciting day for this special game and the people it touches around the world," PIF Governor Yasir Al-Rumayyan stated.

"We are proud to partner with the PGA Tour to leverage PIF's unparalleled success and track record of unlocking value and bringing innovation and global best practices to business and sectors worldwide."

Monahan stated that the agreement was in the best interest of PGA Tour members, even though he described a closed-door meeting with players, during which some called for his resignation, as "intense" and "heated." 

A shared meal and a game of golf 

Initially, the PIF will be the exclusive investor in the new entity, and the board of directors will consist of Al-Rumayyan as chairman and Monahan as CEO.

The merger managed to materialize swiftly and was shrouded in secrecy despite it being one of the most momentous commercial stories in the sport of Golf. Against the backdrop of years of bitter animosity, PGA Tour Commissioner Jay Monahan and PIF Governor Yasir Al-Rumayyan convened in London, where they embarked on a series of discussions and negotiations.

Over shared meals and a round of golf, the two influential figures forged a newly formed conglomerate after years of competition.