PGA Tour Can't Compete With Saudi PIF For Money

Special Envoy Jay Monahan concludes PGA Tour does not have enough financial resources to compete with Saudi Public Investment Fund (PIF) - owner of LIV Golf League

According to the Wall Street Journal on June 10, Monahan admitted his weakness in a meeting of the entire administration. "We cannot confront a foreign government organization with unlimited resources. If they continue, they still have enough resources to make us spend decades of savings to hold out for just a few months," the PGA Tour envoy said in a meeting.

Last year, Monahan made a similar prediction about the war with the PIF-backed LIV Golf League. “The PGA Tour cannot compete if it is an arms race with the only weapon being the dollar,” the PGA Tour’s most powerful executive said at the time.

After nearly two years of confrontation, Monahan revealed that the PGA Tour had to spend nearly $50 million on the legal front. That is the cost of litigation back and forth with PIF Saudi and individuals in the LIV Golf League revolving around allegations of unfair competition and violation of monopoly laws in US courts, which broke out in August 2022.

Dustin Johnson is one of the stars who left the PGA Tour to form the LIV Golf League. Photo: EFE — Dustin Johnson is one of the stars who left the PGA Tour to form the LIV Golf League. Photo: *EFE*

In the race for prize money - a factor that increases attraction and retains stars, the PGA Tour had to withdraw 100 million USD from its reserve fund to increase funds for special events and the Player Impact Program - a program that encourages member golfers to promote the arena.

The PGA Tour’s ally, the DP World Tour, has also spent around $15 million in a dispute with its players at the British Sports Tribunal, stemming from the suspension and fine of an individual who entered the inaugural LIV Golf League on June 8 last year.

For the LIV Golf League, the Saudi PIF has budgeted $2 billion for the first two seasons, both within the fiscal year. As for the prize fund, they provided $255 million for the inaugural season with eight tournaments, increasing to $405 million for the second season with 14 tournaments. The economic organization under the Saudi government is holding a net worth of up to $650 billion.

The PGA Tour this season has a total budget of $428.6 million for 45 tournaments, including the four majors with co-sponsorship.

With the joint legal entity, announced on June 6, the PGA Tour and PIF Saudi will end their legal conflicts. After the two parties combine their commercial activities with the DP World Tour, PIF Saudi will initially be the sole investor and have veto power over the admission of additional shareholders or capital to the three affiliated arenas. In terms of reciprocal authority, the PGA Tour will appoint the majority of the Board of Directors and hold the controlling vote in all joint venture operations.

At the joint venture, Monahan holds the position of CEO, while PIF Chairman Yasir Al-Rumayyan holds the position of Chairman of the Board of Directors.

Commenting on this deal, Rory McIlroy - an A-list star on the PGA Tour said: "Money is the ultimate power, right? Like it or not, PIF continues to pour money into golf. In front of one of the most powerful investment funds, will you accept an ally or an enemy? Being a partner is better."

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