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The PGA Tour has confirmed an agreement with a group of investors led by Liverpool FC and Boston Red Sox owner John Henry to invest in the US golf organization's new business entity.
Strategic Sports Group, which is headed by Henry's Fenway Sports Group, is set to pay about $3 billion in Tour's merchandising business, two of the people said.
The Tour approved the investment overnight, they added. One said the money would come in stages.
The people said it was the latest salvo in a high-stakes battle over the sport's future that has engulfed the tour since Saudi Arabia's sovereign wealth fund launched its own rival, which is set to be valued at about $12 billion. Golf team two years ago.
The deal is set to include an equity participation scheme for players, a win for golfers who remained loyal to the tour even as others defected to Saudi-backed rival LIV Golf, the people said.
The SSG deal does not include Saudi Arabia's $700bn public investment fund at this stage, although it does allow for co-investment from the wealth fund in the future. The tour company wants to continue its talks with the Saudi Wealth Fund, which would allow the PIF to take a stake in the company, according to a person familiar with the matter.
Saudi Arabia has poured billions of dollars into the sport worldwide, with major interests in football, motorsport and boxing. However, its talks with the PGA Tour dragged on past the Dec. 31 deadline, a rare fight by the PIF to add to its sports spending.
The future coexistence of the Tour's events and LIV's schedule have been deadlocks in negotiations that have come under scrutiny from US antitrust authorities. How the PGA Tour's events and calendar will align with LIVs has yet to be resolved. The 2024 LIV golf season is set to begin this weekend in Mexico.
Backed by hedge fund manager and New York Mets owner Steve Cohen and Atlanta Falcons NFL owner Arthur Plank, SSG is strengthening the Tour arm amid a costly battle to retain talent. Masters champion Jon Rahm became the latest star player to leave the tour for LIV in December.
The PIF and Tour players, sponsors, media distributors and politicians struck a truce last June, ending costly court battles and creating a Saudi Arabian fund that intends to take a minority stake in the new business entity. The equity plan with SSG is designed to mend relations with the players, most of whom were blindsided by the Tour's negotiations with the PIF.
The business entity and its billionaire backers are separate from PGA Tour Inc, a tax-exempt organization that manages golf events.
Since the PGA and PIF announced their negotiations, players and US politicians have criticized their framework agreement and the tour has boosted confidence. In August, Tiger Woods joined the tour's policy board, giving players a stronger hand over the rules of the game.
Meanwhile, Henry of Fenway Sports Group, owner of the Boston Red Sox, Liverpool FC and Pittsburgh Penguins, began talking with fellow American sports owners about pooling investment and consulting services for the tour. SSG Federation became.
The Tour's policy board announced in December that it had selected SSG among interested outside investors for „preliminary discussions” with the PGA and their European partner, the TPA World Tour.
The PGA Tour has come under scrutiny from US lawmakers. In July, letters released by the U.S. Senate showed Saudi Arabia seeking control of golf to negotiate with the PGA Tour. Tour leaders have faced criticism from 9/11 victims' groups, who have denounced Saudi Arabia's investments in golf as „sportswashing”.
The PGA Tour, Fenway and PIF declined to comment.
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