According to a Wall Street Journal report, PGA Tour commissioner Jay Monahan told staff in a Thursday meeting that the cost to fight LIV Golf was unsustainable.
The PGA Tour sought a deal with the Public Investment Fund due to substantial costs associated with the lawsuit between the two entities and costs associated with increasing purses and bonuses in order to fight against the LIV Golf League.
Commissioner Jay Monahan told the staff in a meeting on Thursday that legal fees were in the $50 million range and that reserves had been depleted by $100 million due to enhanced purses and bonus pools instituted to keep players from jumping to LIV Golf, according to a report in Saturday’s Wall Street Journal.
“We cannot compete with a foreign government with unlimited money,’’ Monahan said to Tour employees according to the Wall Street Journal report. “We waited to be in the strongest possible position to get this deal in place.’’
Sports Illustrated confirmed the meeting took place. The Tour responded in a statement: “To characterize that this agreement was made due to litigation costs and other use of reserves is an oversimplification. With the end of the fractured landscape in the world of men’s professional golf, the PGA TOUR has never been a more valuable property. The Public Investment Fund (PIF) has recognized that value and the opportunity for ROI with their investment in the TOUR. Additionally, this transaction will make professional golf more competitive with other professional sports and sports leagues.”
On Tuesday, the Tour, the DP World Tour and the Public Investment Fund announced a shocking alliance that they say will bring peace and unity to the professional game, with litigation between the parties ending and the PGA Tour acting as a separate entity while partnering with the others to form a to-be-named for-profit LLC that will at first be funded by the PIF.
Details have been sketchy to this point although Jimmy Dunne, a member of the PGA Tour policy board who initially helped broker the agreement, has done several interviews – including with Sports Illustrated – in which he said Monahan will be in charge of the new venture.
Yasir Al-Rumayyan, the governor of the PIF – Saudia Arabia’s sovereign wealth fund – which funds LIV Golf, will become a member of the PGA Tour Policy Board while also becoming chairman of the new entity.
While Al-Rumayyan noted LIV is part of the deal in an interview with him and Monahan on CNBC on Tuesday, he has not spoken since and LIV Golf employees and players have received little information. Commissioner Greg Norman was not part of the secret discussions, but had a call with the staff on Wednesday in which he declared it would be business as usual. LIV Golf is expected to complete its remaining seven events and a source told SI that employees have been told the 2024 season will also be played.
Numerous details still need to be worked out no matter how LIV is or is not involved, but Monahan attempted to explain how the situation got to this point after fighting against LIV for a year and using Saudi Arabia’s human rights issues and ties to 9/11 as reasons to thwart the new venture.
But to combat LIV, the PGA Tour came up with numerous initiatives to enhance player funds, including a Player Impact Program that cost $50 million last year and $100 million this year. The elevated events on the PGA Tour this year are seeing increases of roughly $12 million per event, not all of it covered by the title sponsor.
Rory McIlroy, who learned of the agreement just hours before it was announced, has been a big part of the pushback against LIV over the past year. But he attempted to explain during a Wednesday news conferencewhy he understands how this deal came about.
“Whether you like it or not, the PIF were going to keep spending the money in golf,” McIlroy said. “At least the PGA Tour now controls how that money is spent. So if you’re thinking about one of the biggest sovereign wealth funds in the world, would you rather have them as a partner or an enemy? At the end of the day, money talks and you would rather have them as a partner.”