PGA Tour Inc. has been a nonprofit organization since it was formed in 1968, but competition from a deep-pocketed Saudi Arabian-backed golf tour has forced changes to the Ponte Vedra Beach-based organization.
“The PGA Tour has undergone a tremendous amount of change over the last few years, with progress accelerating significantly in the last six months,” PGA Tour Commissioner Jay Monahan said at a March 12 news conference.
The biggest change was a private equity investment announced in January of $1.5 billion initially and up to $3 billion eventually into a new venture called PGA Tour Enterprises.
Besides private equity investors, golfers on the PGA Tour will also be eligible for equity grants from the new entity.
This venture is separate from the PGA Tour, which remains a nonprofit organization, but the PGA Tour has not detailed the structure of the two organizations.
When asked to explain it at the news conference in advance of The Players Championship tournament at TPC Sawgrass in Ponte Vedra Beach, Monahan said the nonprofit PGA Tour remains in place.
“The best way to look at that is that is all of our membership, eligibility, and most importantly, all of our competition related business, it sits right there,” he said.
“PGA Tour Enterprises takes all the commercial assets that have existed in the PGA Tour and puts them in a new for-profit entity. The relationship between the two is exceedingly close,” Monahan said.
“From my position, I look at it as one organization, with a new charter and a new opportunity as it relates to being able to utilize investment capital to the benefit of our players and fans,” he said.
However, he didn’t give more details and it remains unclear how much of a stake the new investors have in the business generated by the tour.
The PGA Tour’s most recent tax filing shows it had revenue of almost $1.9 billion in 2022.
The new investors are called the Strategic Sports Group, which has some high-profile professional sports investors, including the owners of the Boston Red Sox and the New York Mets and The Home Depot co-founder Arthur Blank, who owns the Atlanta Falcons.
Chris Solomon, co-founder of golf news organization No Laying Up, said in an interview that while few details have been released, SSG appears to be looking to profit on ventures outside of the golf tour.
“I don’t think the new investors see a ton of unrealized value in the PGA Tour,” he said.
“I view it more an investment in golf as a whole than just the professional tour.”
Monahan said SSG’s backing will help the PGA Tour “make transformative investments” to grow the sport.
“The PGA Tour has been limited in our ability to invest back into some of those growth opportunities. We no longer are with the formation of PGA Tour Enterprises,” he said.
While partnering with SSG, the PGA Tour continues to negotiate some type of partnership with Saudi Arabia’s Public Investment Fund, which controls the competing LIV Golf tour.
LIV has offered big payouts to lure some golfers away from the PGA Tour, creating a bitter rivalry between the two golf organizations.
A report by sports business website Sportico, looking at PGA Tour tax returns, found the PGA Tour incurred $20.7 million in legal fees in 2022 as the competition heated up, compared with total legal fees of $20.2 million in the previous 14 years combined.
The PGA Tour and LIV announced a surprise agreement in June 2023 to seek a partnership and end the feud, but a deal has not been reached.
“I do believe that negotiating a deal with PIF is the best outcome,” Monahan said of the Public Investment Fund.
“Obviously it has to be the right deal for both sides, like any situation or negotiation.”
Monahan said the investment by SSG does not impact the PGA Tour’s ability to reach a deal with PIF and its LIV tour.
“While we have several key issues that we still need to work through, we have a shared vision to quiet the noise and unlock golf’s worldwide potential,” he said.
Monahan said an agreement that ends the feud will also make golf fans happy.
“They’re tired of hearing about conflict, money and who is getting what,” he said.
“Our business thrives when together we’re all laser-focused on delivering for our fans.”
The Players Championship tournament runs March 14-17.