The PGA Tour, European Tour Group and Public Investment Fund of Saudi Arabia may extend their framework agreement deadline into 2024 to reach a definitive agreement, as the complex negotiation between the parties continues.
Bloomberg reports the nature of the negotiations will likely require an extension of the negotiation period initially set to end on Dec. 31 by the terms of the framework agreement signed on May 31 and revealed by all parties on June 6. The agreement allows the parties to extend the negotiating period by an agreed-to length.
The parties are far apart on a variety of issues, including potential player equity in the new company, either referred to as NewCo or PGA Tour Enterprises, and valuations of the PGA Tour, DP World Tour and LIV Golf assets. The valuation of these assets will determine what each party brings to the table and, perhaps, how much capital the Public Investment Fund would want to contribute to achieve its desired ownership percentage.
The negotiators themselves have also changed on the PGA Tour side. In the wake of the June 6 announcement, PGA Tour players felt spurned by leadership, including commissioner Jay Monahan, negotiating with the Public Investment Fund and its governor, Yasir Al-Rumayyan, in secret. Superstar players demanded changes to the PGA Tour's governance structure, and Monahan responded by appointing Tiger Woods to the PGA Tour board of directors in August to give players a sixth position on the now 11-person body. Now the players -- including other player directors Rory McIlroy, Patrick Cantlay, Charley Hoffman, Peter Malnati and Webb Simpson -- hold the majority of seats on the board compared to independent directors, and the players have a majority say in any internal vote if they work as a block.
Then there is the issue of the so-called "unsolicited" private venture capital that has sought to invest in the PGA Tour either alongside or in lieu of the Public Investment Fund. Endeavor and Fenway Sports Group are among the companies seeking to invest in the PGA Tour now that the Tour is clearly open to such capital raises.
The deal is also subject to active scrutiny by the United States Justice Department, which has already been critical of the framework agreement to the point that the PGA Tour and PIF agreed to remove a no-poaching clause to placate regulators.
The complex deal may or may not get done, but the likelihood that it will be completed in 2023 is strikingly low at this point. That would mean the PGA Tour, DP World Tour and LIV Golf would all have their own schedules for 2024 and would likely not come together until 2025 at the soonest.