Distrust looms over PGA Tour as deadline for Saudi Arabia deal approaches

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The PGA Tour is less than three weeks away from a deadline to finalize a deal with Saudi Arabia's sovereign wealth fund that it promised would transform professional golf into a global powerhouse and quiet years of acrimony.

But acrimony clearly persists.

The outline of the plan called for combining the lucrative businesses of the PGA Tour, the venerable American circuit; and LIV Golf, the emerging league that has billions of dollars in Saudi investments. The announcement of the agreement on June 6.However, it fell short of the basics, including a full rating and even modest support from many players. Six months later, unrest and mistrust remain omnipresent within the PGA Tour, as players, board members and top executives struggle to repair ties after secret conversations What led to the Saudi deal surprised even many in the boardroom.

“Since June 6, trust at the highest level has been broken,” Adam Scott, who turned professional in 2000 and now chairs the tour's Player Advisory Council, said in an interview this week. “Nothing has changed to restore that trust.”

Mr. Scott, the winner of the Masters Tournament 2013, will take a seat on the PGA Tour board of directors next month. When he does, he will join a group that has felt divided lately, as players on the board have repeatedly clashed with some outside directors. The rancor may not derail any deal, as many players are open to significant outside investment. But his frustrations with tour leaders — both over the secretive nature of how the deal was struck and a feeling that players don't have enough of a say in how the sport is run — could influence decisions about the details and makeup. future of the circuit. board, influencing golf for decades to come. Jay Monahan, the PGA Tour commissioner, said at the DealBook Summit last month that players “will ultimately be responsible for the deciding vote.”

The deal would give the wealth fund a significant stake in American golf as Saudi Arabia pours money into sports to try to shore up its reputation around the world. It faces headwinds outside the golf world, with the Justice Department set to scrutinize any deal for antitrust violations and senators investigating the tour's ties to Saudi Arabia, and tour officials have spoken for months with potential American investors.

Saudi Arabia's tour and wealth funds have set a deadline of December 31 to finalize their deal, although the sides may extend their talks.

A spokesperson for the tour declined to comment.

The tentative deal with the wealth fund, which came after the tour long insisted that LIV Golf was simply an attempt by the Saudi government to distract people from its human rights record, sparked an uprising among players. , many of whom had spurned LIV's lucrative payouts. The clandestine nature of the negotiations also fueled anger. The tour sought to stop the revolt in August, when agreed to add Tiger Woods to the board of directors, equalizing the count between golfers and outside directors at six each. And he promised that commercial banker Colin Neville, who had already been hired to advise the players, “would be fully aware of the state of the negotiations”.

The addition of Mr. Woods was a boon to the players, who thought his arrogance and cunning would give their team more clout in the boardroom. He did it. But Woods' rise did not alter certain realities, such as the voting thresholds needed to make significant changes. As expected, he also did not unseat the two directors who secretly negotiated with the Saudis: the chairman of the board, Edward D. Herlihy, a partner at the law firm Wachtell, Lipton, Rosen & Katz; and James J. Dunne III, vice president of investment bank Piper Sandler.

“I've learned that any great board needs disagreements to come to the best solution, and we've had a lot of disagreements this year; even the players have had disagreements,” said Webb Simpson, winner of the 2012 US Open Championship and member of the tour board of directors. “But we're all trying to get to a better place.”

Although tour membership is limited to a fraction of the world's best golfers, players have limited influence over the appointments of directors outside the board. This has long frustrated many players, who felt they were in a subordinate position to independent board members. To make the atmosphere worse, a director many players saw as a bona fide collaborator, former AT&T CEO Randall Stephenson, give up after the Saudi deal was announced. (Two players were on the committee that recommended Mr. Stephenson's successor, Joseph W. Gorder.)

Charley Hoffman, a veteran player who sits on the board, said he thought “the independents have the best interests of the players in mind.” But the tour structure ultimately limited the players' influence over their tour, he and others said, a particularly sore point after the Saudi deal.

“The word I hear echoing among all members is 'accountability,'” Mr. Hoffman said.

Amid this scrutiny, the tour is considering attracting additional American investors along with the Saudi wealth fund, which would secure investment in the tour ahead of what could be a lengthy regulatory review of the Saudi deal. The tour said Sunday it had begun talks with Strategic Sports Group, an investment group led by Fenway Sports Group, the parent company of the Boston Red Sox, Liverpool Football Club and, years ago, Monahan's employer.

Fenway would pump $3.5 billion into a newly formed for-profit company that would have a valuation of up to about $12 billion, according to two people familiar with the situation who spoke on condition of anonymity to discuss private financial matters. Those terms, like most things in the agreement, continue to change.

The announcement last week that the Saudis had recruited Jon Rahm, the world's third-ranked player, for the LIV disappointed and unnerved tour loyalists. It also fueled an increase in infighting, which manifested itself most prominently in a Sports Illustrated article which showed golfer Patrick Cantlay having enormous control over the destiny of the tour. Cantlay, the article said, “seemed more concerned with catering to elite golfers like himself” and suggested he was the leader of a group “driving negotiations.”

Cantlay is the highest-ranked player on the board in the Official World Golf Ranking (fifth), but other directors downplayed the idea of ​​him being in charge.

“He just likes to think deeply and see if there's something under the rocks that can make the organization better for everyone,” Mr. Hoffman said.

Jordan Spieth, former winner of the British Open, teachers and the us open who sits on the board, confessed to being baffled by accounts of Mr. Cantlay as a distinctive power center. He thought Mr. Cantlay's inquisitive and insistent style and vision had unsettled some people within the tour hierarchy.

“He's challenged people who have been in a position that couldn't be challenged for a long time, and I think that bothers them,” Spieth said. “Because it's coming from a position of trying to impose some change where change is inevitable, but doing it in a way where the players have a huge role in what it looks like, that challenges the status quo and makes it a target.”

Cantlay said his approach to the position had not changed since June 6 and that, “generally, my mentality is just put my head down and try to get the job done.”

Stephenson isn't the only director to leave. Superstar Rory McIlroy resigned last month. Although his replacement, Spieth, is a well-liked tour stalwart with a history of board service, the change has stoked unrest.

“The dynamic has been shaken up, obviously,” Scott said, adding: “The reasons don't even matter; at a critical moment, that's not ideal.”

Some board members believe that once an agreement is reached, tensions could be eased almost automatically, especially if the composition of the board changes.

“When we all get back to hitting golf shots and doing what we really know how to do,” Hoffman said wryly, “this will all slow down.”



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