The PGA Tour made a huge announcement on Wednesday, revealing that it has finalized a deal with Strategic Sports Group (SSG) to invest up to $3 billion into a new for-profit commercial entity called PGA Tour Enterprises.
SSG is a consortium made up of some of the wealthiest sports team owners in the US, including the owners of the Boston Red Sox, Atlanta Falcons and New York Mets.
Summary
- The PGA Tour has finalized a deal with Strategic Sports Group (SSG) to invest up to $3 billion into a new for-profit entity called PGA Tour Enterprises
- SSG is a consortium of billionaire sports team owners led by Fenway Sports Group
- Nearly 200 PGA Tour players will have access to over $1.5 billion in equity grants in PGA Tour Enterprises
- Equity grants will be based on a tiered system taking into account players’ career accomplishments, recent achievements, participation, etc.
- Separate negotiations are still ongoing between the PGA Tour, DP World Tour, and Saudi Arabia’s Public Investment Fund regarding a potential investment
Under the terms of the agreement, SSG will make an initial investment of $1.5 billion into PGA Tour Enterprises, with the potential to invest another $1.5 billion down the line. Nearly 200 PGA Tour players will also be given access to over $1.5 billion in equity grants in the new venture.
Equity grants will be determined using a tiered system based on players’ career accomplishments, recent achievements, future participation and PGA Tour membership status. This groundbreaking arrangement makes PGA Tour golfers partial owners of the commercial arm of their sport. Player directors on the PGA Tour policy board unanimously approved the SSG deal.
The PGA Tour has finalized an agreement with Strategic Sports Group, injecting about $3 billion of cash into a new for-profit entity.
Investors include:
• Tom Werner & John Henry (Boston Red Sox)
• Mark Attanasio (Milwaukee Brewers)
• Arthur Blank (Atlanta Falcons)
• Wyc… pic.twitter.com/A5v8UcfAL1— Joe Pompliano (@JoePompliano) January 31, 2024
The launch of PGA Tour Enterprises will help the PGA Tour maximize revenues across business verticals like media rights, sponsorships, licensing, experiential entertainment and more. SSG will serve as a minority owner and provide strategic guidance to grow the game globally.
Importantly, this deal is separate from ongoing high-stakes negotiations between the PGA Tour, DP World Tour and Saudi Arabia’s sovereign wealth fund regarding a potential investment. The parties had signed a “framework agreement” last June to potentially combine commercial assets but blew past the initial Dec 31 deadline to finalize terms. Discussions are said to be continuing positively, albeit slowly.
Bringing SSG on board gives the PGA Tour vital leverage and independence during these sensitive talks with the Saudi Public Investment Fund. It also helps the tour boost prize money to be more competitive with the rival Saudi-backed LIV Golf league without being reliant on financing from Saudi Arabia.
PGA Tour Commissioner Jay Monahan extolled the SSG deal as a “monumental day for our organization.” He told players on a conference call that part of the new investment will focus on the tour’s global expansion, digital innovation and data capabilities.
SSG’s consortium of owners features some huge names in sports, like John Henry of the Boston Red Sox, Arthur Blank of the Atlanta Falcons and Steve Cohen of the New York Mets. The group reportedly beat out 26 other investment bids through an extensive selection process.
With the 2024 golf season now officially underway, the PGA Tour appears to have gained major financial firepower through SSG’s record capital infusion. Leveraging the business expertise of SSG’s owners, PGA Tour Enterprises seems poised to take the commercial side of the sport to new heights. Whether or not this affects ongoing talks with LIV Golf and the Saudi PIF remains to be seen.
