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By TourSpoon ·
They must be LIVid. A lot of them held out and could have taken the cash only to watch the Tour cash in. Too bad its not live on air. It should prove to be entertaining. -
By Pretzel ·
Correct, the PGA Tour is still effectively running and operating the PGA Tour (as well as now the Euro Tour and whatever may remain of the LIV) in terms of commercial and business decisions. They don't, however, get the profit that results from these decisions except what is allocated based on financial stake in the newly merged company (depending on how exactly the agreements are written up, of course). Their operating expenses will obviously be covered by the Board as they're an operating expense for the merged entity itself, but anything beyond that is a complete unknown right now. The point of the investments and dilutions is that the PIF gets to have the PGA Tour run their company for them, while the PIF collects the profits as the largest financial stakeholder. It's not a disadvantage, at least financially speaking, to have the most successful of the 3 merged entities also be the ones responsible for the business and commercial decisions of the new conglomerate. The board also has a fiduciary duty to place the interests of the shareholders above their own interests, by which I mean they are legally obligated to take actions that they reasonably believe and can defend will have the best financial impact for the conglomerate. The PIF itself also has an obligation to grow their holdings, and having a majority financial stake in essentially every relevant professional golf tour on the planet is a massive win for them regardless of if they dictate the exact day-to-day business operations of the tours. It simply makes far more sense for them to outsource the golf-specific commercial and business decisions to the people who have already made a very, very successful product rather than trying to reinvent the wheel. The PIF doesn't care about micromanaging the day to day operation of the tours, they never have. They don't need or even want the Tour to come out and say anything about Saudi Arabia directly, they just want eyeballs on their product with their brands on display at the highest level of sports. In this case they got to acquire two profitable professional golf tours on incredibly flexible terms, increasing their financial stake whenever they want with no risk of their own stake ever being diluted, and they don't even have to find a qualified team to manage it because the most successful of the tours they acquired will be doing the commercial management for them. -
By mcanadiens ·
Going to take some big brass ones for Monahan to face the music this afternoon. Hope lunch agrees with him today. Be a shame to go home sick now. Those guys are probably about to shred him. -
By TourSpoon ·
And there will be a lot on the air...speculating for the next few golf news cycles on this issue. I wonder how the PGAT player's meeting today will go. -
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By DeadMan ·
Antitrust laws already apply to non-profits. Their applicability does not change if a business is for profit or not. That said, the DOJ may get more involved, because this looks like more of a monopoly now than it was a year ago. The thing that cuts against this is the PGA Tour has a majority of the board of the new entity and a majority of the voting stake. At least according to the press release. So the PIF can invest money, but it may not have the control that it wants. A lot of this will depend on how the actual agreements are drafted, so it's to early to say. It could be that the PIF ends up a sponsor of all these golf entities but the PGA Tour is still controlling everything. It could also end up with the PIF running everything. And even if the PGA Tour maintains control, that might change with further PIF investments. There's still a lot in the air on exactly how this will work.
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