The PGA Tour and LIV Golf have announced plans of a surprise merger atop the men's pro golf world.
In a stunning announcement, the PGA Tour, LIV Golf and the DP World Tour have merged into a new, for-profit entity set to completely restructure the look of men’s professional golf at the highest level.
The news was initially made public on CNBC by David Faber and confirmed shortly thereafter in a press release by the PGA Tour. The name of the newly-merged golf league is still to be determined, but it is understood to be an LLC rooted in a significant investment from the Saudi Arabian Public Investment Fund.
“After two years of disruption and distraction, this is a historic day for the game we all know and love,” PGA Tour commissioner Jay Monahan said. “This transformational partnership recognizes the immeasurable strength of the PGA Tour’s history, legacy and pro-competitive model and combines with it the DP World Tour and LIV — including the team golf concept — to create an organization that will benefit golf’s players, commercial and charitable partners and fans.
“Going forward, fans can be confident that we will, collectively, deliver on the promise we’ve always made — to promote competition of the best in professional golf and that we are committed to securing and driving the game’s future.”
The news is a complete 180-degree turn on what the last 12 months have been like in the men’s pro golf world. Nearly exactly 12 months ago, LIV Golf launched outside of London. The PGA Tour’s response came in the form of a letter from Monahan, disparaging the new Tour and handing outsuspensions for 17 players, which included future Hall-of-Famers Phil Mickelson, Dustin Johnson, Sergio Garcia, among others. Two months after that,11 LIV golfers filed a lawsuitagainst the PGA Tour, a suit that was actively continuing as of Monday. That lawsuit and any other pending litigation between the two tours is now dropped as a result of this engagement. Mickelson quickly took to Twitter to offer just three words — “Awesome day today” — alongside a smiley-face emoji.
If the news is surprising to pro golf fans, given the vitriol and angst that has defined the men’s game in the last 12 months, it wasjust as stunning to PGA Tour players. Multiple members have confirmed there was no indication an agreement like this was on the table, nor that it was even being discussed. Collin Morikawa took to Twitter immediately, saying, “I love finding out morning news on Twitter”. Sahith Theegala textedSports Illustrated writer Gabby Herzighis thoughts, saying, “I’m biting my tongue til there’s more stuff we hear. No way players are gonna be okay with this”.
Monahan is expected to face Tour members in person Tuesday afternoon in a players meeting at the Canadian Open. Like he did one year ago with those suspensions, Monahanissued a separate letterto all Tour members Tuesday morning that detailed the merger. “There are many details to work through as we develop a definitive agreement,” Monahan wrote, “which will ultimately require PGA Tour Policy Board approval.”
In the meantime, he joined CNBC alongside Saudi PIF governor Yasir Al-Rumayyan to discuss the announcement. After months and months of promising he had no interest in taking calls with LIV Golf commissioner Greg Norman, nor with the Saudi PIF leaders, there was Monahan, on set, seated right next to Al-Rumayyan.
“What’s happened today — and to your earlier question — is we’ve recognized that together we can have a far greater impact on this game than we can working apart,” Monahan said. “I give Yasir great credit for coming to the table, coming to the discussions with an open heart, and an open mind. We’ve done the same. And the game of golf is better for what we’ve done here today.”
Rumayyan was asked to discuss how the partnership came about, which he said involved a lunchtime visit in London and a round of golf and another lunch visit the next day. “We covered everything,” Al-Rumayyan said. “One of the things that I said then, had we met two or three years ago, the impact that we would have in the game of golf would be lesser.”
“Why?” Faber asked.
“Because it would be something small,” Al-Rumayyan continued. “But the way we’re doing our partnership, it’s going to be really big. In many senses. We are going to have both LIV [Golf] and the PGA Tour, in addition to all of our assets, and we will be investing in the growth of the game of golf, and doing many new things that I think will have better engagement from the players, the fans, the broadcasters, the sponsors, everyone else.”
Team golf, as we have come to understand it via LIV Golf, is clearly not going away as part of this forthcoming deal. In fact, all three tours are expected to work together to grow team golf aspects in the new venture. It is also understood that LIV golfers will be allowed to re-apply for membership into the PGA Tour and DP World Tour following the 2023 season, under “a fair and objective process … consistent with each Tour’s policies.”
As part of the merger the Saudi Arabian Public Investment Fund will be making an exclusive investment, and “will have the exclusive right to further invest” in the new entity moving forward. This comes after Monday’s news that the PIF would be taking majority ownership in four Saudi football clubs in hopes to lure the best soccer players from across the world to compete in its domestic league. Leave no doubt, Saudi Arabia is interested in owning and investing in professional sports. When pressed for details about the amount of investment, and the time over which it takes place, Al-Rumayyan said, “Whatever it takes, that’s how much is the commitment we are committed for.”
A new Board of Directors will be formed for the new entity, with a majority of the seats appointed by the PGA Tour, which will give the Tour a majority voting interest, according to the press release. Monahan will stay in his role as commissioner and CEO, while the governor of the PIF, Yasir Al-Rumayyan, will take on the role of chairman. The Board will include an “executive committee” with Monahan and Al-Rumayyan joined by current Tour Board Directors Ed Herlihy andJimmy Dunne.
Embedded within the announcement is the fact that the PGA Tour’s commercial operations will now be part of a for-profit, limited liability company. PGA Tour Inc. has existed for many years as a 501(c)(6) tax-exempt entity, and according to the press release it will continue to do so. “The (c)(6) still stays in place,” Monahan said. “Out of the (c)(6), we will continue to operate our tours. We will put our player retirement plans and assets there. So that stays in place. I think it’s very important — and one of the things that’s important to both of us — is every single week where we’re playing tournaments, we’re making a huge impact in the communities where, you know, we’re invited guests. That continues.”
We will continue to update this story as more information is released.
Insurance brokerage mergers and acquisitions activity is expected to remain robust this year, despite macroeconomic challenges, according to a report by Reagan Consulting released Tuesday.
“There are still a significant number of well-capitalized buyers in the market anxious to do deals. As a result, we expect robust deal activity to continue in 2023 and accelerate from the 99 transactions completed in the first quarter,” the Atlanta-based M&A consultant said.
That total was down 26.7% from 135 in the prior-year period and 43% from 174 in the fourth quarter of 2022.
Several of the most active buyers have experienced financial disruption from the significant increases in interest rates since the middle of 2022, the report noted.
Some consolidation among acquirers is expected as the marketplace and companies continue to mature, the report said.
M&A multiples overall were unchanged in the first quarter, compared with the fourth quarter of 2022, while multiples for large, high-quality assets increased.
The average brokerage M&A valuation in the first quarter was 12.5 times earnings before interest, taxes, depreciation and amortization for a well-run brokerage with $3 million to $5 million in revenue, with a further three times EBITDA available through an earn out based on future performance.
Privately held brokers posted organic growth of 11.1% in the first quarter — the highest reported growth rate recorded since the survey launched in 2008, while public brokers posted first-quarter organic growth of 9.7%.
Commercial property/casualty lines continued to lead the way, posting first-quarter organic growth of 11.7% – the highest rate in the survey’s history, buoyed by the continued hard market, inflation and a healthy economy.