US Investors will bid to bail out the PGA Tour

[Steve Lapper]

https://www.bloomberg.com/news/articles/2023-09-28/endeavor-fenway-said-exploring-pga-deal-to-rival-saudi-arabia-s?sref=QJljMsVo


 I believe some form or iteration of this will ultimately prevail. It's too easy to for those reviewing the Saudi-PIF merger to substitute a domestic buyer to pass up. Ari is one shrewd cat.


 The only question in my mind is just how stupid the PGA Tour will behave along the way?


 

[Wayne_Kozun]

I think it is still hard to outbid the Saudis since earning a sufficient financial return does not matter to them.  KKR, et al, have a fiduciary responsibility to their LPs to maximize their financial return.
IMO what we are more likely to see is a club deal with these new partners joining the Saudis as owner of the PGA Tour - if you can't beat 'em, join 'em. 
And the Saudi dude will still get his membership to ANGC.

[Edward Glidewell]

And the Saudi dude will still get his membership to ANGC.

I really doubt he gets that; ANGC has no motivation to give him a membership.

[Niall C]

https://www.bloomberg.com/news/articles/2023-09-28/endeavor-fenway-said-exploring-pga-deal-to-rival-saudi-arabia-s?sref=QJljMsVo


 I believe some form or iteration of this will ultimately prevail. It's too easy to for those reviewing the Saudi-PIF merger to substitute a domestic buyer to pass up. Ari is one shrewd cat.


 The only question in my mind is just how stupid the PGA Tour will behave along the way.


 Furthermore, a domestic led deal is likely to come with multiple endorsements from possible corporate event sponsors

Failing a bid for the PGA Tour, would the next obvious thing to do be to start another tour in the same way LIV did ?


Niall

[Steve Lapper]

Watch the action/pressure of the Senate and or FTC. That's going to be the final determinate of the merger. Ari is a three-dimensional chess player.

[Bruce Katona]

Given the choice between keeping it "in-house" with a USA based investment funds or having to go through the colonoscopy of FTC or worse, Congressional Hearings regarding restraint of trade/foreign monopolies dictating actions with the borders of the US or a downright nasty PR campaign regarding human rights, I wish someone would have offered me an LP option to invest with Endeavor - I like making a solid return on investment (ROI).


PIF is very formidable - they can outbid anyone.  The only hold-up to PIF getting this deal done are these pesky folks in DC who sometimes like to kick the rocks and tires to see if anything pops out.

[Stewart Abramson]

PGA Tour agrees to private equity investment from Fenway-led Strategic Sports Group, launches PGA Tour Enterprises

https://www.golfdigest.com/story/pga-tour-fenway-strategic-sports-2024-agreement




"Left mostly unsaid was what role, if any, Saudi Arabia’s Public Investment Fund will have in the new for-profit venture. The tour announced that the deal with SSG will allow for co-investment from PIF in the future, and SSG, sources tell Golf Digest, made the deal with the tour under the belief that PIF involvement will ultimately come to fruition. But there are antitrust regulations that need to be hurdled, and Congress announced this week that its investigation into PIF and its investments in American businesses will continue."

[Wayne_Kozun]

It looks like SSG is investing "up to $3B" but currently only putting in $1.5B of cash.


It will be interesting to see how they do the transition from a not for profit entity to "PGA TOUR Enterprises, a new commercial venture under the PGA TOUR’s control". 

[Rob Marshall]

Rumor I heard from a PGA of America member is that the PGA may sell the Ryder Cup to the PIF. One Billion dollars.....

[jeffwarne]

Rumor I heard from a PGA of America member is that the PGA may sell the Ryder Cup to the PIF. One Billion dollars.....

Perfect.
Divide it amongst 28,000 PGA Members with a boost for every year being a member.(31 years here).
Ryder Cup jumped the shark anyway-might as well sell it at a profit.
Guessing none of the above will happen

[PCCraig]

The big incentive for the players to stay/grow at the PGA Tour will be the equity they will earn in the new company.


To make the revenue/profit projections work it will depend a lot on gambling, in particular live gambling on shots, players, etc.

[Tommy Williamsen]

I grew up in 1950s New York. It was the Baseball capital of the US. All through school, I played and watched baseball. When we moved to Baltimore, I'd go to 33rd Street and watch the Orioles. I knew the stats on most American Leagers. The 1994 happened. The World Series was canceled, and I quit professional baseball, football, and basketball. I just could not muster up any enthusiasm.


We'll see what the future brings, but over the last couple of years, I witnessed my TOUR enthusiasm wane. Today, I dug a six-foot hole and buried the TOUR. I have not thrown the last shovel of dirt on the grave, but....  I always loved the Pebble stop. I doubt I will watch a minute of it. I haven't watched golf since the Ryder Cup. It makes me sad.

[BHoover]

The continuous discussion of and focus on money in all sports, including professional golf, has become both distasteful and incredibly boring. Obviously the players play for money and sponsors/investors are looking to make money. But I could not care less about how much capital is being injected into the Tour, nor do I care about how much players stand to make (much as I could not care less about how much MLB, NFL, EPL, etc. players are making). I don’t gamble either so being inundated with sports gambling advertising has become tiresome and irritating.

I want to see the world’s best golfers play global events on compelling golf courses. I would prefer to see shotmaking return to the professional game (but that would take both a rollback of the ball and the equipment, which seems unlikely). Until this happens, the only events in golf I go out of my way to watch are the majors. I also sometimes watch European Tour events as a way to wake up on a Saturday or Sunday morning and watch some golf with my coffee. I find myself watching those more than any PGA Tour events…and I have never spent a moment watching any LIV exhibitions.

[Sean_A]

I grew up in 1950s New York. It was the Baseball capital of the US. All through school, I played and watched baseball. When we moved to Baltimore, I'd go to 33rd Street and watch the Orioles. I knew the stats on most American Leagers. The 1994 happened. The World Series was canceled, and I quit professional baseball, football, and basketball. I just could not muster up any enthusiasm.


We'll see what the future brings, but over the last couple of years, I witnessed my TOUR enthusiasm wane. Today, I dug a six-foot hole and buried the TOUR. I have not thrown the last shovel of dirt on the grave, but....  I always loved the Pebble stop. I doubt I will watch a minute of it. I haven't watched golf since the Ryder Cup. It makes me sad.

Think of all the time you will now have to actually do something instead of sleeping in front of the tv.

Ciao

[Tim_Weiman]

The continuous discussion of and focus on money in all sports, including professional golf, has become both distasteful and incredibly boring. Obviously the players play for money and sponsors/investors are looking to make money. But I could not care less about how much capital is being injected into the Tour, nor do I care about how much players stand to make (much as I could not care less about how much MLB, NFL, EPL, etc. players are making). I don’t gamble either so being inundated with sports gambling advertising has become tiresome and irritating.

I want to see the world’s best golfers play global events on compelling golf courses. I would prefer to see shotmaking return to the professional game (but that would take both a rollback of the ball and the equipment, which seems unlikely). Until this happens, the only events in golf I go out of my way to watch are the majors. I also sometimes watch European Tour events as a way to wake up on a Saturday or Sunday morning and watch some golf with my coffee. I find myself watching those more than any PGA Tour events…and I have never spent a moment watching any LIV exhibitions.

Pretty much sums up my feelings.

[Ally Mcintosh]

The continuous discussion of and focus on money in all sports, including professional golf, has become both distasteful and incredibly boring. Obviously the players play for money and sponsors/investors are looking to make money. But I could not care less about how much capital is being injected into the Tour, nor do I care about how much players stand to make (much as I could not care less about how much MLB, NFL, EPL, etc. players are making). I don’t gamble either so being inundated with sports gambling advertising has become tiresome and irritating.

I want to see the world’s best golfers play global events on compelling golf courses. I would prefer to see shotmaking return to the professional game (but that would take both a rollback of the ball and the equipment, which seems unlikely). Until this happens, the only events in golf I go out of my way to watch are the majors. I also sometimes watch European Tour events as a way to wake up on a Saturday or Sunday morning and watch some golf with my coffee. I find myself watching those more than any PGA Tour events…and I have never spent a moment watching any LIV exhibitions.

Pretty much sums up my feelings.

Mine too.

[Dave Doxey]

The continuous discussion of and focus on money in all sports, including professional golf, has become both distasteful and incredibly boring. Obviously the players play for money and sponsors/investors are looking to make money. But I could not care less about how much capital is being injected into the Tour, nor do I care about how much players stand to make (much as I could not care less about how much MLB, NFL, EPL, etc. players are making). I don’t gamble either so being inundated with sports gambling advertising has become tiresome and irritating.

I want to see the world’s best golfers play global events on compelling golf courses. I would prefer to see shotmaking return to the professional game (but that would take both a rollback of the ball and the equipment, which seems unlikely). Until this happens, the only events in golf I go out of my way to watch are the majors. I also sometimes watch European Tour events as a way to wake up on a Saturday or Sunday morning and watch some golf with my coffee. I find myself watching those more than any PGA Tour events…and I have never spent a moment watching any LIV exhibitions.

Agree.   


Even the majors are now devalued, as some of the best players in the world are excluded. 


At least, by no longer watching much golf, the 'skip' button on my DRV remote will last longer.

[Michael Moore]

"When did the enjoyment of sports become synonymous with accounting? And given the massive gaps in information (e.g., what, exactly, does $52 million mean to Jim Dolan and the future of Madison Square Garden Company), why does “smart fandom” so often require fans to engage in uninformed, wild speculation about the fiscal health of billion-dollar corporations?"
 
Jay Kang said it better than anyone . . . https://grantland.com/features/the-veil-opulence-whether-really-relate-everyone-sports/

[John Crowley]

The continuous discussion of and focus on money in all sports, including professional golf, has become both distasteful and incredibly boring. Obviously the players play for money and sponsors/investors are looking to make money. But I could not care less about how much capital is being injected into the Tour, nor do I care about how much players stand to make (much as I could not care less about how much MLB, NFL, EPL, etc. players are making). I don’t gamble either so being inundated with sports gambling advertising has become tiresome and irritating.

I want to see the world’s best golfers play global events on compelling golf courses. I would prefer to see shotmaking return to the professional game (but that would take both a rollback of the ball and the equipment, which seems unlikely). Until this happens, the only events in golf I go out of my way to watch are the majors. I also sometimes watch European Tour events as a way to wake up on a Saturday or Sunday morning and watch some golf with my coffee. I find myself watching those more than any PGA Tour events…and I have never spent a moment watching any LIV exhibitions.

Brian,
You pretty much nailed it for me.
I read these headlines about money in pro sports and ask myself is there a reason that I should care one way or another. The answer continually comes back NO.


I do follow 1. The Open 2. The Masters 3. U.S. Open, 4. PGA (depending on the venue) and less than a handful of others based on the venues.


I have seen a few minutes of the LIV. It is an inferior non-compelling product.


This week I asked three friends if they would rather play golf or watch the Super Bowl Sunday after next. They all agreed. We are expecting to have a great time on the golf course.
John

[Steve Lapper]

The business angle of this convoluted deal looks very interesting to me.


Mark my words, the PGA & SSG will cut a deal with PIF and produce a world venue tour that reunites all the name players. It's just a matter of time and details.


Why? Because the SSG investors want to cozy up to the world's largest sovereign wealth fund. That relationship was as much a goal for Fenway Partners, Redbird (Gerry Cardinale), Stevie Cohen, Marc Lasry and Arthur Blank's family offices. Being able to have Yasir's # on speed-dial enables all of them to feed  their AUMs, their future investment appetites, and facilitate liquidity for their current portfolio holdings to the largest, most liquid, most powerful fund extant. Becoming effective monopolistic partners across a single sport is a very efficient means of accomplishing this.


This week's deal btw SSG & the PGA Tour was just step one, and designed in some part to meaningfully improve the chances of avoiding an FTC anti-trust action and intense scrutiny of the Tour's 501c3 status. It also gives Jay Monahan a semi-graceful descent into a long state of "garden leave*." It make take weeks or months to come to fruition, but it's inevitable.


All of the above said, I share this board's general take on fandom of the PGA Tour. Save for the majors, it's a tired visual product that lacks any connection to a younger viewing audience and its blatant and transparent greed is grating on its primary demographic. IMO, its greatest value is an afternoon nap enabler. Nothing induces a better snooze then listening to Dan Hicks or Trevor Immelmann describing another up and down from a perfectly manicured bunker. Other than Riviera, Sawgrass or a Major, I prefer watching the PGA Tour from behind my eyelids and am sure there are hundreds of thousands if not more, practicing the same.


* Anyone want to bet against what will become the HBS or Wharton School "Jay Monahan Case Study on How to F...k up a Monopoly?

[Tim Martin]

The 3 billion regardless of the source won’t make the PGA Tour any more watchable. The idea that Rory McIlroy was seemingly talking to Tyrell Hatton behind the scenes regarding a move to LIV is remarkable given his stance a year ago. I wonder how much remorse has set in for some of the players that didn’t jump to LIV given the softened reaction and increased acceptance of such a move?

[Rob Marshall]

The 3 billion regardless of the source won’t make the PGA Tour any more watchable. The idea that Rory McIlroy was seemingly talking to Tyrell Hatton behind the scenes regarding a move to LIV is remarkable given his stance a year ago. I wonder how much remorse has set in for some of the players that didn’t jump to LIV given the softened reaction and increased acceptance of such a move?

Michael Breed made a point this morning of saying they need to add more trees to courses to bring back the excitement to the game. No one wants to see guys gouge it out of the rough but would love to see them work it around trees. Interesting take.

[Mike_Trenham]

To me this feels a lot like an ESOP model for the players, where everyone gets a bit of a slice of the pie.  ESOPs don’t have a great track record for doing much other than preserving the status quo.

[Wayne_Kozun]

How do you transition equity to the next generation of members?  Is the equity grant to the players a one-time thing?  How do you decide on the current equity split?  How much does Tiger get?  He is the biggest driver but he barely plays on tour?  He certainly moves the needle, but under many quantitative measures, like FEC points, etc, he would barely get anything.
What about Champions Tour members, do they get anything?  Assuming Tiger wants to play after he turns 50, how do you give him an incentive to do so on the Champions Tour?

[Tom_Doak]

Michael Breed made a point this morning of saying they need to add more trees to courses to bring back the excitement to the game. No one wants to see guys gouge it out of the rough but would love to see them work it around trees. Interesting take.

This is the appeal of Harbour Town:  if you drive it out of position, you are hitting the second shot around, over, or under big trees, and have to show more control of the golf ball.


Of course, the ball doesn't do those things as easily anymore, and those trees at Harbour Town have been there forever, you can't just plant trees on a new course and have this effect for 30-40 years.  And I don't really care about Michael Breed's take on anything in golf other than the swing [which I don't really care about, either].