The golf world got its first look Monday at the framework agreement that the PGA Tour and DP World Tour struck with the Public Investment Fund of Saudi Arabia (PIF) to reshape the world of men’s professional golf. The documents were obtained by No Laying Up shortly after being provided to Congress as part of the Senate Permanent Subcommittee on Investigations inquiry into the pending deal.
The framework agreement can be read in its entirety here.
Here are a few things to know about the agreement.
There weren’t really any bombshells hiding in the written agreement.
Interviews done by Jimmy Dunne and others, like this one in Sports Illustrated, seemed to cover almost all of what was put on paper in the framework agreement. If you’d like an in-depth read about what happened (along with some of our analysis), here’s a piece we wrote when the news broke.
Now, it's worth mentioning up front how scant the document is on specifics. This was mentioned over and over in interviews the past few weeks, however now we can see it spelled out. The leadership doesn't appear to be withholding any details, there just don't seem to be many details.
There are still a thousand unanswered questions about nearly every section of the framework, which was signed by Commissioners Jay Monahan and Keith Pelley, as well as PIF Governor Yasir Al-Rumayyan. But as far as what has been put on paper, the agreement doesn’t seem to contain a big smoking gun that wasn’t already mentioned in the media.
Everything that follows is operating under the assumption that this deal goes through. If not, the framework is torn up and "the parties can revert to operating their respective businesses in the state that existed pre-agreement in their discretion."
The parties agreed to some sort of discipline for players returning to the PGA Tour.
While there are no specifics included in the framework, the document does include language stating that the parties will work together “to establish a fair and objective process for any players who desire to re-apply for membership with the PGA Tour or the DP World Tour following the completion of the 2023 season… consistent with each Tour's disciplinary policies.”
A lot of people will probably focus on the Official World Golf Rankings line.
The wording in the framework agreement is: “The Parties will cooperate in good faith and use best efforts to secure OWGR recognition for LIV events and players under OWGR's criteria for considering LIV's pending application.”
As a refresher: A big hesitation for players who chose not to jump to LIV (and a big complaint of those who did), is the lack of OWGR points available at LIV events. These points are used to determine who qualifies for major championships and, for some players, are also used to determine sponsor incentive bonuses. The fear (rightly so) for many players was that if they don’t get new OWGR points, their world rankings would plummet and they would not be eligible for major championships, which is exactly what happened for some this year. (Reminder: The majors mostly make up the OWGR board and can change how they fill their fields any time they choose to do so. Feel free to read more about this whole mess here.)
So, is this line in the framework agreement deserving of a LIV victory lap? It’s possible, but smart money would be on a “not exactly” for a few reasons.
Besides the fact that the phrase “best efforts” feels far from a guarantee…
We still don’t know what’s going to happen to LIV Golf.
The framework agreement spells out that the three golf entities will continue to co-exist. Let’s look at the exact language:
“NewCo will undertake a full and objective empirical data-driven evaluation of LIV and its prospects and potential and will make a good faith assessment of the benefits of team golf in general, and PIF, the PGA Tour and the DP World Tour will work together in an effort to determine how best to integrate team golf into PGA Tour and DP World Tour events going forward.”
In our opinion, this could be taken three ways. After the 2023 LIV Golf season:
• The NewCo will evaluate the P&L of LIV Golf – an entity that pays for TV coverage, costs hundreds of millions of dollars a year and brings in almost zero revenue – and decide to kill it and fold the players back into the PGA Tour/DP World Tour.
• The NewCo will decide that the team golf model – now with all of the world’s best players at its disposal – would unlock untold amounts of new revenue and serves as a better way to run men’s professional golf. This would require totally blowing up the existing Tour system and all of its infrastructure, including the billions of dollars in committed contractual revenue from title sponsors and media partners, which stretches into the next decade. This seems unlikely.
• Due to the P&L exercise above, the NewCo decides to shutter LIV Golf and comes up with a totally different team concept. Picture a mini team event series in the fall (which has been talked about in the past), a reviving of the World Cup of Golf (which has been dormant since 2018), which in the past has seen the likes of Gary Woodland and Matt Kuchar as the players willing to travel to represent the United States. A worldwide event like that, free of the constraints of the Olympic committee’s love of stroke play, with purses to draw the best players from each country, seems like a far more interesting option than much of what else has been presented.
What seems least likely based on the framework agreement and the statements made the past few weeks by most key stakeholders, would be that LIV and the PGA/DP World Tours continue to operate independently and run concurrently as they do now. There is perhaps a chance that they run separately in different times of the year, but with the top players' continued pleas to consolidate the schedule and play fewer tournaments, it seems next to impossible to get enough critical mass to make both products successful.
The lawsuits are over. So is the recruiting of players to LIV through the end of 2023.
In addition to all litigation between the tours and LIV Golf being dropped with prejudice (meaning they cannot be picked back up if this deal falls apart), the framework also spells out that the two sides have agreed “not to, directly or indirectly, enter into any contract, agreement or understanding with, solicit, or recruit any players who are members of the other's tour or organization to become members of their respective organizations or any other golf league.” That means you can go ahead and ignore every rumor you see on Twitter about Jon Rahm flirting with LIV, at least until 2024. If the agreement falls apart, or doesn’t get finalized by the end of the year, LIV could potentially begin recruiting players again.
The agreement was signed on May 30, a week before the announcement was made on television.
This seems relevant only because so much of the messaging during and after the announcement seemed rushed, chaotic and reactive. The initial reactions of many fans, media and especially players, was confused speculation, mostly due to the fact that so many felt blindsided by the announcement. The Tour has said repeatedly that this was done in order to prevent leaks or misinformation, but it’s hard not for this to feel like an own goal by leadership if there really was a week to prepare for the announcement.
The part about the PGA Tour retaining control of the NewCo appears to be correct.
Much was made about Jimmy Dunne’s claims that the deal struck was one that would bring a cash infusion to the PGA Tour and DP World Tour without the tours giving up control over how the money was spent. Based on language in the framework agreement, that appears to be what the PIF has signed on for.
“The PGA Tour will at all times maintain a controlling voting interest in NewCo and PIF will continue to hold a non-controlling voting interest, notwithstanding any incremental investment by PIF or exercise of its right of first refusal.”
The PIF will become a major sponsor of men’s professional golf.
Language from the document spells out that the PIF “will make a financial investment to become a premier corporate sponsor” of the PGA Tour and DP World Tour and that the Tours will “work together collaboratively to identify a high profile event for which PIF or its designee(s) will make a financial investment to serve as title sponsor.” What this means is – surprise – unclear, but it’s something worth considering as the Tour bumps up against the limitations of its current sponsors as purses continue to climb in the age of designated events.
When the Definitive Agreement is signed, Yasir Al-Rumayyan will be a member of the PGA Tour policy board.
Again, this is not new news. It was spelled out in the initial press release. But it’s still wild to see and worth repeating that the person who was funding the Tour’s biggest rival the past 2 years is now in the room helping to make decisions.
Jay Monahan remains a question mark.
Monahan is obviously a fixture of the framework agreement. In addition to his role as PGA Tour commissioner, he would also be taking on the role of CEO of the NewCo.
However, on June 13, the PGA Tour announced that Monahan was recovering from a “medical situation” and he’s been away from his day-to-day role ever since. He’s not expected to be at the next meeting of the PGA Tour policy board on June 27 and it’s unclear if or when he will return to his role as commissioner.
If Monahan does not return to his commissioner role, it’s unclear what will happen with the CEO position of the NewCo. Since Monahan’s leave began, chief operating officer Ron Price and executive vice president Tyler Dennis have been running day-to-day operations.
In summary:
The signed copy of the framework agreement confirms much of what was put forth by Jimmy Dunne and the PGA Tour. There is still a lot left to be determined about the fate of LIV going forward, although it’s likely team golf will exist in some form in the future. The details of how players who left for LIV will be potentially integrated back into the PGA Tour and DP World Tour remain unclear, only that all parties will make a “good faith” effort to come up with a fair criteria and terms of readmission. We still don’t know whether forming a new for-profit company and allowing the Saudis to invest in that company will alleviate the regulatory concerns of the Justice Department, and that is likely to play out over the next six months (or more) but it is clear the Saudis are likely to be major players in professional golf moving forward.