PGA TOUR, DP World Tour and PIF announce newly formed commercial entity (*** NO POLITICS ***)

[j.b.newton]

Im not the brightest business mind, so please be patient.

 

Does this basically make players similar to the other sports orgs (MLB,  NFL, NBA, NHL) where they will have contracts and benefits?  If this is the case, where would that associated overhead come from and how would that influence future purses?  Why should Valspar provide $25M on top of the already paid/contracted athletes coming to their event?  Does this push it more towards a pay for play, not compete for pay model?

[ahenderX]

10 minutes ago, bscinstnct said:

 

LIV not being invested in the pga tour gives them every incentive to continue to…

 

aggressively compete with the pga tour. 

Bottom line, I think, is PIF/LIV wants more than the Tour/players are willing to provide. Maybe they get a bigger Aramco sign. Don’t see them getting a huge say in the new for-profit enterprise. They can poach all they want. This new deal is a huge plus for the Tour and its members.

[Titleist99]

On 1/30/2024 at 10:06 AM, MattC555 said:

I've tuned into the PGA tour for almost all of my life to watch the greatest of their generation duke it out.  It is getting really frustrating, as a fan, to see more and more of the top talent leave the tour.  I wasn't familiar with most of the top ten finishers this past Sunday.  It was an exciting finish, but so are most weeks on the Korn Ferry tour.  The longer this drags out, the weaker the PGA tour will become. 

Well, some of us think that the purging of the malcontent is a good thing. Most of the poached brought nothing positive to the Tour. IMO

[CaymanS]

This appears to leave PIF out at this point. The PGAT seems to gained leverage here. 

[Gregakin]

Brilliant play by the PGAT.  LT equity vs. one time signing bonus and you'll eventually be sold off to an unnamed team owner.  

 

Checkmate

[Holy Moses]

50 minutes ago, CaymanS said:

This appears to leave PIF out at this point. The PGAT seems to gained leverage here. 

It was also announced that side of the deal takes time for DOJ approval

[Maine Golfer]

and let some of the Liv people play in select PGA events. Thats a great move.  The PGA can use them to make the PGA product better! I watch a lot of car racing from Nascar, F1 , sports cars and regional stuff. When driver X from Series B wants to come make one off start in Series A, they don't fight!  The goal of a racing series or golf tour is to put on the best product they can every event. 

[DFS PFD]

I fail to see how this was necessary at all. Is there really anyone underpaid right now? Seems like the disconnect between PGA players and their target audience is growing daily, this has NOTHING to do with "growing the game". 

[Titleist99]

So, Is Jay Monahan CEO of PGAT Enterprise?

[bekgolf]

25 minutes ago, DFS PFD said:

I fail to see how this was necessary at all. Is there really anyone underpaid right now? Seems like the disconnect between PGA players and their target audience is growing daily, this has NOTHING to do with "growing the game". 

 

I'm losing interest in pro golf all the time.  Right now I'm watching TGC make word salad trying to explain what's going on and how "Everyone's a winner".  The fans are losing out.

[One Putter]

35 minutes ago, DFS PFD said:

I fail to see how this was necessary at all. Is there really anyone underpaid right now? Seems like the disconnect between PGA players and their target audience is growing daily, this has NOTHING to do with "growing the game". 

I have to stay up until midnight on Saturday if i want a Sunday tee time for the next week, i'm completely fine with the game going through a little shrinkage.

[bekgolf]

The CNBC guy is excited about the possibility of team golf and speculates that team golf could be the expansion that grows equity because "every golfer knows what it's like to play in a 4 ball".  I hope nobody is taking him seriously.

[bscinstnct]

2 hours ago, ahenderX said:

Bottom line, I think, is PIF/LIV wants more than the Tour/players are willing to provide. Maybe they get a bigger Aramco sign. Don’t see them getting a huge say in the new for-profit enterprise. They can poach all they want. This new deal is a huge plus for the Tour and its members.

 

But it’s not extremely disruptive if top-10 players or even top-30 players keep getting poached

 

We have no idea if PIF patience is truly unlimited 

 

We can always say that the tour has this great talent pipeline but when you lose

 

Rahm, BK, Cam especially and even BD who is very popular and DJ too etc 

 

It will negatively impact the tours ratings and revenue for sure. 
 

PIF can keep building the field and just could start getting real traction. Definitely overseas but in the US as well. 
 

If they hade zero limits on how much money the will flush, every year that goes buy weakens the pga tour. 
 

Now it’s a game of chicken. 
 

How badly does PIF want in on the tour and for LIV to have a real brand/crossover play, and the Aramco events with all the top players?

 

And how much will SSG/the tour give up?

[Ghost of Snead]

2 hours ago, ahenderX said:

Bottom line, I think, is PIF/LIV wants more than the Tour/players are willing to provide. Maybe they get a bigger Aramco sign. Don’t see them getting a huge say in the new for-profit enterprise. They can poach all they want. This new deal is a huge plus for the Tour and its members.

 

Saying the deal takes time for DOJ approval is likely the death knell for the PIF. No way SSG invests 3 billion in the Tour and plays second fiddle to a foreign entity. The PGAT will survive and thrive without the PIF so LIV and let die on the CW vine. Time for some counter poaching.

[ahenderX]

1 hour ago, DFS PFD said:

I fail to see how this was necessary at all. Is there really anyone underpaid right now? Seems like the disconnect between PGA players and their target audience is growing daily, this has NOTHING to do with "growing the game". 

I don’t think anyone on this thread thinks Tour players are underpaid. LIV overpaid so the new Tour is trying to find a middle ground. 

[jvincent]

5 hours ago, j.b.newton said:

Im not the brightest business mind, so please be patient.

 

Does this basically make players similar to the other sports orgs (MLB,  NFL, NBA, NHL) where they will have contracts and benefits?  If this is the case, where would that associated overhead come from and how would that influence future purses?  Why should Valspar provide $25M on top of the already paid/contracted athletes coming to their event?  Does this push it more towards a pay for play, not compete for pay model?

 

I slept at a Holiday Inn last night, so I'll take a stab.

 

The newly formed "PGA Tour Enterprises" was created with 12-billion outstanding shares. I'm making this number up to make the math simple.

 

SSG is going to give $3B to PGATE to acquire 25% of those shares. PGATE now has $3B in cash to spend like drunken sailors on prize money, PIF money, more jets for Jay M, etc.

 

PGATE is going to distribute some combination of shares and cash that total $1.5B in value to existing tour members based on a double-secret probation formula. New players joining the tour will also be eligible for shares/cash according to that same formula.

 

PGATE presumably controls all of the unallocated shares and can sell them, at whatever new value they assign, to new investors such at the PIF or any other large money entity.

 

The big mystery in all of this is still how does PGATE increase the value of those shares? Do they pay a dividend? 

[jdl]

 

[Ghost of Snead]

4 hours ago, jvincent said:

 

PGATE is going to distribute some combination of shares and cash that total $1.5B in value to existing tour members based on a double-secret probation formula. New players joining the tour will also be eligible for shares/cash according to that same formula.

 

The big mystery in all of this is still how does PGATE increase the value of those shares? Do they pay a dividend? 

 

The double-secret probation formula will indeed be a formula but likely based mostly on meritocracy which has always been the foundation of the PGAT. 

 

How will the PGAT increase the value of the shares ? No different than any large scale investment firm. Invest in the right things.

[Dicka]

10 hours ago, Titleist99 said:

The players are members of an association.

 

They're not members in a "for profit" organisation...they are shareholders.

 

  

9 hours ago, Gregakin said:

Brilliant play by the PGAT.  LT equity vs. one time signing bonus and you'll eventually be sold off to an unnamed team owner.  

 

Checkmate

 

Not sure...what happens in the future though? The Tour can't keep giving away equity when new players come around you wouldn't think. But the PIF sure as heck can keep throwing around cash. 

 

The other thing to keep in mind is how will PGA Tour players be able to leverage their equity. Will they be able to publicly trade their shares? Or is it a closed trading market...which limits their ability to turn their equity into dollars.

 

Cash is always king...especially when you have mountains of it.

[Holy Moses]

Still don’t understand why if LIV is such an innovative golf league they would want to be connected in any way to the PGA Tour. If they have all this leverage, why not continue to do your own thing?

[Stevens24]

51 minutes ago, Holy Moses said:

Still don’t understand why if LIV is such an innovative golf league they would want to be connected in any way to the PGA Tour. If they have all this leverage, why not continue to do your own thing?

I think they will, And each year pick off another 2-3 top players until the networks or a serious streaming service takes notice. Also they can turn and go after the womens game and or the DP tour. I do not see PIF being involved with the Tour at all going forward. 

[Titleist99]

As far as the DP World Tour goes and the PGAT deal with SSG..........High tide lifts all boats. Waiting for other investors.🙂

[JungleJimbo]

 

 

[Gregakin]

9 hours ago, Holy Moses said:

Still don’t understand why if LIV is such an innovative golf league they would want to be connected in any way to the PGA Tour. If they have all this leverage, why not continue to do your own thing?

If you go back to their launch, listen to interviews, read messages, etc.; LIV never anticipated such a stiff arm from the PGAT. And I do not believe the PGAT anticipated the allure money would have on their top talent (already extremely wealthy), who would turncoat on the PGAT.  The tour is a collection of very proud/arrogant leadership, and I'm sure there was some early internal denial, but they are also extremely smart and connected.

 

Everyone had to pivot.

[One Putter]

9 hours ago, Stevens24 said:

I think they will, And each year pick off another 2-3 top players until the networks or a serious streaming service takes notice. Also they can turn and go after the womens game and or the DP tour. I do not see PIF being involved with the Tour at all going forward. 

The thing is that the sport is deeper than ever. They can pick off 2 guys from the top every year and there will be a fresh batch of about 3-5 bad*ss college players that come in and fill the spot and keep things rolling. Guys like Aberg, Dunlap, etc.

[jvincent]

12 hours ago, Ghost of Snead said:

 

The double-secret probation formula will indeed be a formula but likely based mostly on meritocracy which has always been the foundation of the PGAT. 

 

How will the PGAT increase the value of the shares ? No different than any large scale investment firm. Invest in the right things.

 

But what are they going to invest in?

 

Do the TPC branded golf clubs, which I assume will fall under the PGATE umbrella, make enough money to justify that valuation?

 

The current TV/media contracts are worth just under $1B per year, but that money was already accounted for and based on the reports that have come out recently isn't enough to fund the new prize structure. Is PGATE going to try and ask for more money from the broadcasters? That's not going to fly.

 

I still think it's financial smoke and mirrors right now. 

[Holy Moses]

3 hours ago, Gregakin said:

If you go back to their launch, listen to interviews, read messages, etc.; LIV never anticipated such a stiff arm from the PGAT. And I do not believe the PGAT anticipated the allure money would have on their top talent (already extremely wealthy), who would turncoat on the PGAT.  The tour is a collection of very proud/arrogant leadership, and I'm sure there was some early internal denial, but they are also extremely smart and connected.

 

Everyone had to pivot.

The last time a group gave a meeting to the PIF, the PIF stole Andy Gardner’s idea and used it as their own. You can understand the PGA Tour’s weariness.

[bladehunter]

2 hours ago, jvincent said:

 

But what are they going to invest in?

 

Do the TPC branded golf clubs, which I assume will fall under the PGATE umbrella, make enough money to justify that valuation?

 

The current TV/media contracts are worth just under $1B per year, but that money was already accounted for and based on the reports that have come out recently isn't enough to fund the new prize structure. Is PGATE going to try and ask for more money from the broadcasters? That's not going to fly.

 

I still think it's financial smoke and mirrors right now. 

Could be valued based on estimating outside offers per player. Think of it like a business buy. There a firm overseas who thinks it’s worth $300b or some crazy number. Buying it for Pennie’s under that is a good move . Worst thing that happens is you sell your share to that firm for a tidy profit. No ?  
 

we can’t play both sides with pif . If it’s a legit organization, it’s part  of the market and  it’s a legit offer. So goes to show value.  If it’s not legit. It should be illegal for them to be in the us doing business.  

[jimecherry]

3 hours ago, jvincent said:

 

But what are they going to invest in?

 

Do the TPC branded golf clubs, which I assume will fall under the PGATE umbrella, make enough money to justify that valuation?

 

The current TV/media contracts are worth just under $1B per year, but that money was already accounted for and based on the reports that have come out recently isn't enough to fund the new prize structure. Is PGATE going to try and ask for more money from the broadcasters? That's not going to fly.

 

I still think it's financial smoke and mirrors right now. 

Speculative value is always inflated if the tv deals are worth close to a billion a year which is probably more than lets say the LA Angels deal then the speculative value one would expect to be more than 2.7bill which is LAA current speculative value.

[Titleist99]

3 hours ago, Holy Moses said:

The last time a group gave a meeting to the PIF, the PIF stole Andy Gardner’s idea and used it as their own. You can understand the PGA Tour’s weariness.

People need reminding that the PIF stole the Premier Golf League's Idea. I hope you don't mind me reminding them every time one of them uses the tired line  "If only Jay Monahan had taken the call"🤣