The American golf market has undergone amazing changes.
On Tuesday, June 6th, PGA, the PGA Tour of the United States, and LIV Golf, the upstart golf supported by Saudi Arabia, agreed to merge. This amazing move put an end to the differences and debates about who has dominated American golf since last year.
The two parties indicated that the agreement merged LIV-related businesses supported by Saudi Arabia’s sovereign wealth fund with the businesses and management rights of PGA and Dubai World Tour, a third-party entity, into a new, collectively owned for-profit entity.
The two sides also said that the merger will end the litigation between the two sides. Since the launch of LIV, the two sides have always had differences in law and public opinion.
The unnamed new business entity will be headed by Yasir Al-Rumayyan, President of Saudi Public Investment Fund, and Jay Monahan, President of PGA, will be the CEO. PGA will appoint a majority of the members of the board of directors and hold a majority of voting rights in the combined business.
The 2023 LIV Golf Tournament will be held as planned. A PGA memo said that after the end of this season, the two sides will "cooperate to establish a fair and objective procedure for any player who wants to reapply for PGA membership".
The memo reads:
Today is an important day for our organization and the whole golf game. When we make the final agreement, there are still many details to be solved, which will eventually need the approval of PGA’s policy Committee.
Golf is usually regarded as a peaceful sport, but the entry of LIV has caused quite a stir in this sports market, and also brought great changes to the operation mode of this sport, because LIV Golf has signed high-value, long-term and guaranteed contracts with players, similar to those obtained by NFL or NBA players.
In contrast, PGA is more like a performance-based league, where players earn money according to their performance in the game and the sponsorship and endorsement fees they can get.
LIV has also signed contracts with some top players in PGA, and the amount is staggering. For example, phil mikkelsen’s $138 million, dustin johnson’s $97 million and Brian Deschamps’ $86 million. However, there are still some famous adherents who continue to support the PGA Tour, including Tiger Woods, rory mcilroy and jordan spieth.
According to reports, Woods and McRoy got a contract of hundreds of millions of dollars from LIV Golf, but they were eventually rejected. Both of them continue to support the PGA Tour, saying that LIV’s contract will undermine competitiveness and reduce players’ motivation to improve their skills.
PGA also tried its best to shut out the players who signed up for LIV Golf, so that they could not participate in the competitions organized by PGA. Therefore, this makes some major events that are not hosted by PGA more attractive, because it is the only place where golfers from two leagues can face each other.
There have been competitive sports leagues in the United States before, such as NBA versus ABL or AFL versus NFL. At some point, the final combination of the opposing sides will bring better games and more income for athletes. However, the market once thought that it would be very difficult to merge LIV and PGA, because LIV is backed by Saudi Arabia with deep pockets, which means that the merger between the two parties may take longer.
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