FOX - PGA Tour LIV Golf European Tour to merge and unify sport after bitter split

2023-06-06 10:52:26 ET

A bitter split in the golf world is coming to a dramatically peaceful conclusion as the PGA Tour, upstart Saudi-backed rival LIV Golf and the European Tour announced a merger to unify the sport and its players.

They've signed a deal to combine Saudi Arabia's Public Investment Fund golf-related commercial businesses and rights with those of the PGA Tour and European tour into a "collectively owned, for-profit entity" to bring the sport together on a global basis.

LIV Golf and CEO Greg Norman made a splash on the scene last year by drawing some of the world's most famous golfers away from the PGA Tour, including Phil Mickelson, Dustin Johnson, Sergio Garcia, Bryson DeChambeau, Brooks Koepka and Patrick Reed, among many others. Those players and LIV Golf drew criticism from those saying the effort helped Saudi Arabia whitewash -- or "sportswash" -- human rights abuses.

"After two years of disruption and distraction, this is a historic day for the game we all know and love," said PGA Tour Commissioner Jay Monahan. "This transformational partnership recognizes the immeasurable strength of the PGA Tour's history, legacy and pro-competitive model and combines with it the DP World Tour [the European Tour's sponsorship name] and LIV – including the team golf concept – to create an organization that will benefit golf's players, commercial and charitable partners and fans."

Saudi Arabia's PIF will initially be the exclusive investor in the new entity alongside the PGA Tour, LIV Golf and the DP World Tour. And going forward, the PIF will have the exclusive right to further invest, with a right of first refusal on capital invested in the new entity.

The PGA Tour will appoint a majority of the board and hold a majority voting interest in the combined entity.

Perhaps the most immediate commercial upshot of the deal is a boost to media coverage of the sport, with all its star players coming together as one. LIV Golf drew key players away from the PGA Tour, but then had serious trouble getting media organizations interested in paying it for its events: ESPN ( NYSE: DIS ), CBS ( NASDAQ: PARA ) ( NASDAQ: PARAA ), NBC ( NASDAQ: CMCSA ) and Fox ( FOX ) ( FOXA ) all passed on covering the league, and CBS, NBC and ESPN all alreay had existing deals with the PGA Tour.

Apple ( AAPL ) and Amazon.com ( AMZN ), both active in signing up new streaming sports deals, also passed on LIV Golf coverage. And LIV Golf eventually had to deny that it was considering even paying Fox to air its tournaments. The upstart league eventually found a TV home on the CW Network ( NXST ).

The controversy involving the PGA Tour and LIV Golf did not directly impact golf-related stocks to a large degree. However, if the sport of golf gains popularity through a larger global presence, stocks like Topgolf Callaway ( MODG ), Acushnet Holdings ( GOLF ), Nike ( NKE ), and Dick's Sporting Goods ( DKS ) could see a benefit.

More on LIV Golf's media struggles

• Apple, Amazon join those passing on LIV Golf rights
• LIV Golf denies report it's close to paying Fox to air tourneys
• LIV Golf finds TV home - on the CW Network

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