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

[CT007]

Without cut and paste previous posts, here’s a few comments

 

there is no shares to acquire of the NewCo - PGATour Ent. / but I as I re-read, this is exchange of dollars for SSG stake or ownership %  This is a start up, this $1.5 to $3B is for start up costs - new offices, new water cooler, .. 🙂.  Talent , employees, being the most significant.  As we dont know what this NewCo is selling, or revenue streams it is a little early to say - I’d guess it may be necessary to to fund these Signature Events , but that seems to me why the $3B turned into $1.5B.  The new money is not paying for old broken system (sarc comment 🙂

 

the assets of NewCo and the valuation is very speculative,  should be based on future revenue, cash flow, etc - I think the TPC courses are not included.

 

there is reason to think this is very good for PGA Tour - maybe solely as source of leverage over PIF - but lot of details to sort out.   As was said in June, we are here to announce a merger, then not 24 hours later, it’s not a merger.  So more to come.

Edited February 1 by CT007
Re-read, correct

[Ole3wiggle]

All of this is a whole a lot of nothing in my opinion. No one knows how this is going to all work? How does a non profit sell off all its assets (players) to a new for profit company to give the players equity? It will be interesting once all the dust settles and we actually see how this investment is going to work. If i were the players, I'd be questioning whats going on. 

[woahnelly]

4 hours ago, Ole3wiggle said:

All of this is a whole a lot of nothing in my opinion. No one knows how this is going to all work? How does a non profit sell off all its assets (players) to a new for profit company to give the players equity? It will be interesting once all the dust settles and we actually see how this investment is going to work. If i were the players, I'd be questioning whats going on.

 

How is this SSG going to recoup their $? Is my main question. They are not a charitable organization.  Seems like a bailout more than investment. 

[ahenderX]

12 hours ago, Ole3wiggle said:

All of this is a whole a lot of nothing in my opinion. No one knows how this is going to all work? How does a non profit sell off all its assets (players) to a new for profit company to give the players equity? It will be interesting once all the dust settles and we actually see how this investment is going to work. If i were the players, I'd be questioning whats going on. 

I would think players have asked all the relevant questions. 

[Ole3wiggle]

6 hours ago, ahenderX said:

I would think players have asked all the relevant questions. 

This deal was made by the board, it likely had some player director input i.e. Tiger Woods most influentially but your average player has no clue what this means. 

[cdnglf]

3 hours ago, Ole3wiggle said:

This deal was made by the board, it likely had some player director input i.e. Tiger Woods most influentially but your average player has no clue what this means. 

 

Agreed. If the details had been shared with all 200+ players it would have leaked for sure.

[DrunkCaddy]

19 hours ago, woahnelly said:

 

How is this SSG going to recoup their $? Is my main question. They are not a charitable organization.  Seems like a bailout more than investment. 

I agree with you, I don't see exactly how SSG is going to make their money unless the PGA was really poorly run.  Handing over the money to the players through an "equity grab"  isn't a real strong business plan.    Reminds me of a quote I recently read about college football.  

 

"What are you looking for if you are private equity?" asked an industry source. "You are looking for a poorly managed business that nevertheless has a strong market. That's the definition of college athletics."

 

Makes me wonder if that is what SSG saw in the PGA?

 

[ahenderX]

4 hours ago, Ole3wiggle said:

This deal was made by the board, it likely had some player director input i.e. Tiger Woods most influentially but your average player has no clue what this means. 

“Likely had some player director input”. Ya think. If you googled this deal there are several articles which provide details of the deal. 

[Ole3wiggle]

21 minutes ago, ahenderX said:

“Likely had some player director input”. Ya think. If you googled this deal there are several articles which provide details of the deal. 

 

Literally no one knew what the details were and they still dont after the introductory call they had this week.

Edited February 2 by Ole3wiggle

[ahenderX]

1 hour ago, Ole3wiggle said:

 

Literally no one knew what the details were and they still dont after the introductory call they had this week.

He’s not on the policy board. You mentioned player directors. He’s just a player. He knows as much as he needs to know right now. 

[Chunkitgood]

I tend to think if someone is talking about a subject of mutual interest, and could tell you the whole truth, but pointedly doesn’t…it’s not a good sign.

 

Hanlon’s Razor says don’t attribute to malice that which can be explained by stupidity.  My own thought is the two are often the same thing, in that people like those running the PGATour may be competent enough at overseeing a going concern, but have no clue what to do now (the stupidity), and are in the end being guided purely by self interest to the detriment of everyone else (the functional equivalent at least of the malice).

 

Once Jimmy Dunne was involved, it was inevitable there would be some sort of opaque financial deal put in place. Once something is in play, it is in play, and the players (not the golf players) will get their piece of it before it is over.  It’ll be interesting to see who’s getting the transaction fees.

 

People talk about the Saudi’s having “surplus” money that just needs to find a home, any home.  They ain’t the only ones.

[DrunkCaddy]

2 hours ago, Ole3wiggle said:

 

Literally no one knew what the details were and they still dont after the introductory call they had this week.

It's even more vague than the supposed terms of the LIV/PGA agreement that was agreed upon 6 months ago.   

[Titleist99]

7 hours ago, cdnglf said:

 

Agreed. If the details had been shared with all 200+ players it would have leaked for sure.

Absolutely.....

[Titleist99]

3 hours ago, DrunkCaddy said:

It's even more vague than the supposed terms of the LIV/PGA agreement that was agreed upon 6 months ago.   

As it should be. The rank and file have no experience in complex matters such as this.

[ahenderX]

This article from Golf.com has more information than the PGA press release.

 

A dummy’s guide to PGA Tour-SSG mega-deal: Answering 15 burning questions

 

edited- And further negotiations with PIF will include representatives of SSG.

Edited February 3 by ahenderX

[cdnglf]

4 hours ago, ahenderX said:

This article from Golf.com has more information than the PGA press release.

 

A dummy’s guide to PGA Tour-SSG mega-deal: Answering 15 burning questions

 

'Under the SSG investment, some 200 players will become “equity partners” — or receive a piece of ownership — in the PGA Tour. Those players will receive a piece of $930 million immediately, while an additional $500 million is set aside for additional players to earn their way into Tour equity beginning in 2025.'

 

Sounds like a one-time event that benefits the current players much more than those of the future and the past.

 

Future players are a bit like employees who join a startup post-IPO.

 

If you're Jack or Trevino or DL3 (or for that matter DJ or Phil), you look at this and say... hey, I helped build this thing you just sold. Where's why my cut? 

[ahenderX]

19 minutes ago, cdnglf said:

 

'Under the SSG investment, some 200 players will become “equity partners” — or receive a piece of ownership — in the PGA Tour. Those players will receive a piece of $930 million immediately, while an additional $500 million is set aside for additional players to earn their way into Tour equity beginning in 2025.'

 

Sounds like a one-time event that benefits the current players much more than those of the future and the past.

 

Future players are a bit like employees who join a startup post-IPO.

 

If you're Jack or Trevino or DL3 (or for that matter DJ or Phil), you look at this and say... hey, I helped build this thing you just sold. Where's why my cut? 

Some will be immediate. Some will be accrued over a 5-year period. Right now it’s all about trying to put the fire out.

Edited February 3 by ahenderX

[DrunkCaddy]

2 hours ago, ahenderX said:

Some will be immediate. Some will be accrued over a 5-year period. Right now it’s all about trying to put the fire out.

I don't know what that "immediate" means.   Does it mean that players will get shares and those shares are equivalent to $900M of equity?  It certainly does not mean that players will be getting $900M in cash anytime soon, only that their equity is currently valued at that (which would have been true without the SSG investment) as I believe the PGA was valued at $12B before any outside investment.  

[ahenderX]

56 minutes ago, DrunkCaddy said:

I don't know what that "immediate" means.   Does it mean that players will get shares and those shares are equivalent to $900M of equity?  It certainly does not mean that players will be getting $900M in cash anytime soon, only that their equity is currently valued at that (which would have been true without the SSG investment) as I believe the PGA was valued at $12B before any outside investment.  

I have read two articles stating the major part of the equity had to be held for 4-5 years before it was fully vested. Not sure about the initial equity, or whatever it may be. $930M divided by 200 is $4.65M. There are several criteria as to how much someone gets, or will get. Length of time on tour, current ranking, future quality of play over some designated length of time are some of what I have read. 

Edited February 3 by ahenderX

[DrunkCaddy]

Cycling is a much smaller sport than professional golf and has different issues, but Interesting to see some of the parallels going on with the PIF right now.

 

https://www.cyclingnews.com/news/report-dollar270-million-from-saudi-arabian-investor-could-drive-one-cycling-reform-project/

 

A sports investor company owned by Saudi Arabia's Public Investment Fund (PIF) has emerged as a frontrunner to back the new One Cycling reform project that hopes to revolutionise professional cycling, according to a report by the Reuters news agency and sources contacted by Cyclingnews. 

Reuters suggested that SRJ Sports Investments has begun exclusive negotiations about a potential investment of around €250 million ($270 million) after a bidding process run by consulting firm EY on behalf of a select group of leading teams. ....

[ahenderX]

This is an interesting article from Sports Illustrated with opinions from Rory McIIroy, Jordan Spieth, and Adam Scott.

 

Rory McIlroy Called Jordan Spieth After His PIF Comments

[PedronNiall]

7 hours ago, ahenderX said:

This is an interesting article from Sports Illustrated with opinions from Rory McIIroy, Jordan Spieth, and Adam Scott.

 

Rory McIlroy Called Jordan Spieth After His PIF Comments

Crazy to read all the talk from McIlroy about PIF needing to be a part of unification when their bankrolling of LIV's creation is what splintered the game so heavily to begin with. LIV that's headed by Norman & his ego that wants nothing to do with unification and makes grandiose claims about how "his" tour is revolutionizing the global game. PIF who spiked the merger talks the LPGA & LET had in the works to help stabilize the LET's financial situation. PIF is only in the discussion around unification because they've thrown so much money at players you half way can't blame them for destroying their own legacies and selling out their former and current friends and so much that bodies like LET are now beholden to them.

 

While player greed over recent years has certainly made this worse--both players who barely make the tour thinking they should be set for life after a single year in the background and players at the top whining that $1M a win a $10M+ a year in endorsements aren't enough--PIF's forcing of their money into every aspect of global sports including golf is what has set this off. To be fair, if it weren't PIF it might have been China doing so if they could leverage the same kind of action elsewhere they've managed in the NBA and NFL, though PIF has managed much stronger control where it's planted its dollars. Whatever the source, creating a tour that disrupts everything by poaching players with half-billion dollar sums is why everything is broken right now. Imagine an army invading and saying they don't understand why there just can't be peace while you watch them firing their artillery in the background.

 

To the article, it does seem like part of McIlroy's worry is that if PIF is pushed aside he won't see nearly the money he would have had he jumped ship to LIV or had PIF become an integral part of the new status quo. Maybe that's not the case as I can't be inside his head, but that's how his responses come across.

[hunterdog]

Over the past weeks or months my thinking on the LIV and PGAT has changed. I have had to recognize and accept that LIV, with its vast dollars and employee sign-on bonuses, is now part of the professional golf landscape. For a number of reasons I will not watch or pay attention to LIV events but I guess there are people who will - you know grow the game. But at this point why unify professional golf? If people want to watch more golf, this weekend was perfect, the PGAT at Pebble Beach and LIV in Mexico. Two different events to watch means more golf to watch. Unification would likely have meant only one event to watch - less golf. If the argument is to bring the best players together, we have that four times a year at the majors (admittedly a few better players don’t qualify under the current rules but it’s really only a few). More events with best players? Well, we had that, it was called the PGAT, but players, organizers, and sovereign wealth funds didn’t like that model and blew it up. Global Tour? As an American viewer, I would see less golf - I’m not watching golf at 2 or 3 a.m. being played on the other side of the globe. Again, having different tours allows the PGAT to bring a pretty good product to North American viewers and LIV can play India, Australia, Singapore, etc. for the international golf viewers. It just seems like two separate tours is better for golf fans than a unified global tour. IMO (which like Koepka. Rahm, and it appears McIlroy, I reserve to change on any future transactional basis).

[stinger_gc]

On 2/3/2024 at 6:10 AM, ahenderX said:

This article from Golf.com has more information than the PGA press release.

 

A dummy’s guide to PGA Tour-SSG mega-deal: Answering 15 burning questions

 

edited- And further negotiations with PIF will include representatives of SSG.

I think it’s a good sign that SSG has already met a PIF. Regulatory reasons seem to be the only holdup 

[stinger_gc]

16 hours ago, PedronNiall said:

Crazy to read all the talk from McIlroy about PIF needing to be a part of unification when their bankrolling of LIV's creation is what splintered the game so heavily to begin with. LIV that's headed by Norman & his ego that wants nothing to do with unification and makes grandiose claims about how "his" tour is revolutionizing the global game. PIF who spiked the merger talks the LPGA & LET had in the works to help stabilize the LET's financial situation. PIF is only in the discussion around unification because they've thrown so much money at players you half way can't blame them for destroying their own legacies and selling out their former and current friends and so much that bodies like LET are now beholden to them.

 

While player greed over recent years has certainly made this worse--both players who barely make the tour thinking they should be set for life after a single year in the background and players at the top whining that $1M a win a $10M+ a year in endorsements aren't enough--PIF's forcing of their money into every aspect of global sports including golf is what has set this off. To be fair, if it weren't PIF it might have been China doing so if they could leverage the same kind of action elsewhere they've managed in the NBA and NFL, though PIF has managed much stronger control where it's planted its dollars. Whatever the source, creating a tour that disrupts everything by poaching players with half-billion dollar sums is why everything is broken right now. Imagine an army invading and saying they don't understand why there just can't be peace while you watch them firing their artillery in the background.

 

To the article, it does seem like part of McIlroy's worry is that if PIF is pushed aside he won't see nearly the money he would have had he jumped ship to LIV or had PIF become an integral part of the new status quo. Maybe that's not the case as I can't be inside his head, but that's how his responses come across.

Thing is PIF is gonna keep poaching players if this deal doesn’t go forward. It’s better to have them on board as opposed to competing 

[Titleist99]

4 hours ago, stinger_gc said:

Thing is PIF is gonna keep poaching players if this deal doesn’t go forward. It’s better to have them on board as opposed to competing 

While I agree with you, at some point you have to ask yourself, is PIF harming the consumer? If they continue to poach players at ridiculous sign-on bonuses and irrational contracts to run the PGAT out of business as to where their product is the only one to watch, where are the checks and balances?

 

PIF has no business model, they're trying to run their competition out of business, and they're trying to force the PGAT to abandon the market.

 

It won't work, but it could be argued that they're trying.

 

Edited February 5 by Titleist99

[Dicka]

I'm interested in how the player equity will be handed. It's only really worth something if they are able to trade it. Is NewCo being listed somewhere? Will there be closed private trading possible? I'm sure these are issues that have been discussed, but to my knowledge, nothing on this has been made public.

[Short Pete]

If the PGA-SSG deal is done LIV is history. They will try to include the PIF into the business to bring even more money. With LIV the same will happen as in soccer, where the likes of Benzema, CR7 or other good players were bought with absurd amounts of money to play in a non competitive league for a handful of fans. Now they want to go back into real soccer leagues, because the Saudi circus lacks everything that makes the sport exciting to play or to watch.

 

And here's a guess: Jon Rahm knew the deal with SSG would be sealed. He took the money from Sharkie, he expects to play one season of LIV, and then PGA, PIF and SSG will merge, LIV will be kicked and the marquee players will be welcome to return to "The Tour". Via his status as Major champ he is exempt anyway. Not the most likeable move from a sports perspective, but good for his wallet.

[Holy Moses]

17 hours ago, Short Pete said:

If the PGA-SSG deal is done LIV is history. They will try to include the PIF into the business to bring even more money. With LIV the same will happen as in soccer, where the likes of Benzema, CR7 or other good players were bought with absurd amounts of money to play in a non competitive league for a handful of fans. Now they want to go back into real soccer leagues, because the Saudi circus lacks everything that makes the sport exciting to play or to watch.

 

And here's a guess: Jon Rahm knew the deal with SSG would be sealed. He took the money from Sharkie, he expects to play one season of LIV, and then PGA, PIF and SSG will merge, LIV will be kicked and the marquee players will be welcome to return to "The Tour". Via his status as Major champ he is exempt anyway. Not the most likeable move from a sports perspective, but good for his wallet.

Norman isn’t good at following through on promises, so I hope Rahm didn’t take his word for it

[woahnelly]

On 2/2/2024 at 5:39 PM, DrunkCaddy said:

I agree with you, I don't see exactly how SSG is going to make their money unless the PGA was really poorly run.  Handing over the money to the players through an "equity grab"  isn't a real strong business plan.    Reminds me of a quote I recently read about college football.  

 

"What are you looking for if you are private equity?" asked an industry source. "You are looking for a poorly managed business that nevertheless has a strong market. That's the definition of college athletics."

 

Makes me wonder if that is what SSG saw in the PGA?

 

 

I'm still confused and can't find an answer. I would have thought the SSG only got involved pending the PIF larger investment to bail them out. But Jordan Speith, now also master of business, is telling us otherwise. 

 

Or maybe the PGA wants the SSG on board so they actually have smart people in the room to deal with the PIF if/when that transaction ever goes down. 

 

I'm flip flopping back to team Rory on this one because he's actually got Yasir's phone #

Edited February 7 by woahnelly