- Senior college football writer
- Author of seven books on college football
- Graduate of the University of Georgia
Commissioner Jay Monahan told PGA Tour employees during a meeting Thursday that it couldn’t financially afford to keep spending tens of millions of dollars in its legal fight against Saudi Arabia’s Public Investment Fund while continuing to increase its own purses to keep players from defecting to the rival LIV Golf League, according to a report Saturday by the Wall Street Journal.
Monahan, during a meeting at PGA Tour headquarters in Ponte Vedra Beach, Florida, reportedly told employees that the financial model wasn’t sustainable while fighting Saudi Arabia’s sovereign wealth fund, which reportedly has $620 billion in assets.
The meeting came two days after the PGA Tour’s stunning announcement that it had formed an alliance with the Public Investment Fund (PIF) and DP World Tour to form a new for-profit entity that will dramatically alter the global ecosystem of men’s professional golf.
“We cannot compete with a foreign government with unlimited money,” Monahan told employees, according to the Wall Street Journal. “This was the time. … We waited to be in the strongest possible position to get this deal in place.”
According to the report, Monahan told employees that the tour had already spent $50 million in legal fees and had dipped into its reserves for $100 million to help pay increased purses in elevated events and other bonuses to players.
“To characterize that this agreement was made due to litigation costs and other use of reserves is an oversimplification,” a PGA Tour spokesman said in a statement provided to ESPN on Saturday. “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 [return on investment] with their investment in the tour. Additionally, this transaction will make professional golf more competitive with other professional sports and sports leagues.”
A source told ESPN on Saturday that the PGA Tour carries insurance that will cover some of its mounting legal fees.
The PGA Tour spokesman told ESPN that the league had probably spent “tens of millions of dollars” on lawyers while fighting LIV Golf’s federal antitrust lawsuit and defending itself in an antitrust investigation by the U.S. Department of Justice.
The new agreement ends all legal disputes between PIF and the PGA Tour. If the federal antitrust lawsuit had dragged on for years because of discovery disputes and appeals, sources told ESPN, it might have cost the PGA Tour more than $100 million in legal fees.
Longtime PGA Tour member Geoff Ogilvy, the 2006 U.S. Open winner, told ESPN that he believes this was PIF’s plan all along.
“It just has a sense of inevitability about it, like it was always going to be this way,” Ogilvy said. “I think the LIV side might have been playing chess the whole time, maybe. I think it’s not really a fair fight when they’ve got so much money. They can stick you in court and leave you in court and keep you in court and just run you out of money, but I assume that’s a bit of a tactic.”
Four-time major champion Rory McIlroy, one of the PGA Tour’s most vocal supporters during its battle with LIV Golf, also seemed resigned to the fact that the PGA Tour wasn’t going to outspend PIF.
“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, you know, 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.”
After the LIV Golf League lured away more than 30 PGA Tour players — including past champions Dustin Johnson, Brooks Koepka, Phil Mickelson, Bryson DeChambeau and others — with guaranteed contracts reportedly worth as much as $200 million, the PGA Tour increased its own purses by $100 million from 2022. It also doubled Player Impact Program bonuses to $100 million for the top 20 golfers.
Since the new alliance was announced, Monahan has been criticized by human rights groups, including Amnesty International, and even his own tour’s members for his sudden about-face, given his past comments about the source of funding for LIV Golf and the Saudi Arabian monarchy’s history of human rights abuses and its alleged involvement in the Sept. 11, 2001 terrorist attacks.
The Wall Street Journal reported that Monahan said during the meeting that he had been asked how he would explain the new alliance to his own daughters, given the Saudi Arabian monarchy’s treatment of women. The report said Monahan mentioned his daughters by name and paused.
“I understand all the human rights concerns,” Monahan said. “I’ve had them myself.”
Source: Read Full Article