The earth-shattering news that the PGA Tour, DP World Tour and Saudi Arabia's Public Investment Fund plan to merge, which stunned the sports world on Tuesday, is still fresh. It has left those that cover, watch and participate in the game with a slew of questions that remain unanswered as the process continues to unfold.
In a press conference with a select group of media, PGA Tour commissioner Jay Monahan was short on details, not because he didn't want to disclose them but because, as he noted, the announced merger is a "framework agreement."
"What we've agreed to here is a framework agreement," Monahan said. "The binding elements are tied to the litigation. A lot of these details we've got to work through. If we had announced a definitive agreement this morning and I was calling [Rory McIlroy and Tiger Woods] in the morning and I had made commitments on behalf of the PGA Tour and not had an opportunity to fully vet them with our policy board and with those two individuals in a larger group, then that would be a complete miss on my part, and I recognize that.
"But this was us reaching a framework agreement. We think it's the right agreement. Obviously, Tiger and Rory's perspective is one that I understand very well, and it was part of my thinking throughout these conversations, and it will be a part of my thinking going forward."
On Tuesday, it felt as if Monahan and PIF governor Yasir Al-Rumayyan started a company with the knowledge of a handful of other people and no details vetted out for the future. Then, they rolled it out on CNBC only to be forced to backtrack and actually figure out the details.
This is not uncommon in the startup world, but in the golf world where everything is always a year or two or three behind, the announcement felt like a lightning strike in the dark, and so much ambiguity remains because of that. So many details still have to be ironed out.
According to one player who was in a players-only meeting with Monahan on Tuesday, even the PGA Tour members have yet to receive concrete details. I believe this is because, again, there really are not very many details to receive.
So with that in mind, let's all take a deep breath and dive into nine burning questions we're faced with as the golf world has been turned on its head over the course of the last 24 hours.
1. Is this merger guaranteed to happen? According to many who know how this could play out within the legal process, it comes across as far from a done deal. One entity (LIV Golf) was suing another (PGA Tour) for being a monopoly, and now, the entity (PIF) providing the funding for the plaintiff is merging with the defendant. If that sounds confusing, that's because it is confusing. Nobody knows how this is going to resolve itself legally, but saying this union is guaranteed to go through is a disservice to reality, which is that it could happen but also might not.
The DOJ will consider these quotes from LIV court filings when evaluating a merger:— John Nucci (@JNucci23) June 7, 2023
• The [PGA Tour] is “an entrenched monopolist with a vice-grip on professional golf”
• "[Before LIV, pro golfers had no option but to play on Tour if they wanted to play at the highest level]” pic.twitter.com/TuU6tviyHg
2. Has Monahan burned bridges with his players for good? This requires us to evalute the revised structure of professional golf. The new entity will have Monahan as its CEO, and it will preside over the PGA Tour, DP World Tour and LIV Golf. Theoretically, even if Monahan is pushed out the door as commissioner by PGA Tour players, he could possibly remain CEO of the new entity. The board of that entity will include folks who are more empathetic to his position, and it will not be a member-run organization.
With all of that information, the answer is, in fact, another question: Does it even matter?
Yes. Distrust and anger over Monahan's move is growing right now. Will it ever dissipate? He seemingly reasserted his position of power in the golf world Tuesday and insulated himself with a group of people who won't cave to any short-term pushback against him. It's understandable that players would be upset at the sequence of Monahan basically saying, "I work for you, I work for you, I work for you, I work for you ... you work for me." The loss of power by any party is always disconcerting and difficult to reconcile. As is a loss of trust.
In the end, most of the players -- particularly the stars -- will be paid more money than ever before to play golf, and the non-stars likely did not turn down massive contract offers to defect to LIV Golf in the first place. If you presented this endgame to them two years ago without all the stuff in the middle, most likely would have taken it.
3. What will PIF investments allow the PGA Tour to do that it's not doing already? First, let's talk about what this investment looks like. There is currently an ongoing valuation of the new for-profit company, and after that, the PIF will purchase a stake in this entity. Not only will the PIF's investment be exclusive, the fund will essentially hold first right of refusal for other investment opportunities and veto power over others who may wish to invest in the future. Layman's terms: It's a lot of power and control.
Speculation is that securing future sponsorships for some of the PGA Tour's events has not been going well, which is not shocking. Monahan himself said the current financial situation of the PGA Tour is not ideal: "To make the changes in '23 and ultimately to make the changes in '24, we've had to invest back in our business through our reserves. ... Between our reserves, the legal fees, our underpin and our commitment to the DP World Tour and their legal fees, it's been significant. I'm grateful that, when we looked to '24, the response that we've gotten from our sponsors and our partners has been very positive, and those losses that we've experienced in '23 will be significantly mitigated."
The influx of capital from the PIF -- CBS Sports has heard a significant range between $2 billion and $10 billion -- gives this new entity the ability to increase purses (again), create loads of runway going forward and experiment with ideas geared more for the long-term than the short-term.
"This puts us in a position where we've got capital that we can deploy to the benefit of our members and through our tournaments, and it gives us capital to deploy in growth businesses that ultimately will generate a return that we'll reinvest in our players," said Monahan.
More important than all of that? The for-profit nature of the new entity makes it much easier to funnel money to its most important stars. Previously, the Tour had to create end-around methods such as the Player Impact Program to divert money to the players creating it. Now? It will be far simpler (albeit yet-to-be-determined) to pay the players who deserve it.
4. Is it fair to consider ex-PGA Tour superstars as "winners?" It depends on your definition of "winning." It's true that they received significant contracts for running over to LIV Golf and will now seemingly have a pathway to return to the PGA Tour. That process is not going to be straightforward, however.
"There still has to be consequences to actions," McIlroy said on Wednesday. "The people that left the PGA Tour irreparably harmed this tour, started litigation against it. Like, we can't just welcome them back in. Like, that's not going to happen. And I think that was the one thing that Jay was trying to get across yesterday is like, 'Guys, we're not just going to bring these guys back in and pretend like nothing's happened.' That is not going to happen."
Presumably, there is still money to be paid out over the next few years on the LIV Golf contracts. Dustin Johnson, Brooks Koepka, Bryson DeChambeau and Co. likely didn't get everything up front. If LIV folds entirely, are the contracts void? If the payments are upheld, what will be the reentry tax to the PGA Tour?
There are non-monetary costs to be considered as well. Did Phil Mickelson destroy his reputation in the process of all of this? He may have changed the future of professional golf, but he had to pay perception price that can never be recouped. This group won a lot -- mostly money -- along the way, but just because there's no obvious cost does not mean they didn't also pay a massive price.
5. What does Tiger Woods think? Woods has been eerily quiet this week, and we will not truly know his perspective until he actually speaks. It's fair to imagine the 15-time major champion will fall in line with McIlroy's thought process: The deal with the PIF is almost a necessary evil as the PGA Tour couldn't go dollar-for-dollar against the PIF, and now, more money will flow into the game and the PGA Tour will have a say on where said money is funneled.
"I see that there's an opportunity out there if both organizations put a stay on their litigation," Woods said at the 2022 Hero World Challenge. "But that's the problem: They've got to put a stay on it. And whether they do that or not, there's no willingness to negotiate if you have a litigation against you. So, if they both have a stay and then have a break and then they can meet and figure something out, then maybe there is something to be had. But I think, first of all, and then obviously litigation against us and then our countersuit against them, those would then have to be at a stay as well. So then we can talk, we can all talk freely."
6. Will the loyal PGA Tour soldiers be rewarded? McIlroy hit the nail on the head asked this question: "The simple answer is, 'Yes.' The complex answer is, 'How does that happen?' And that's all a gray area and up in the air at the minute. But ... it's hard for me to not sit up here and feel somewhat like a sacrificial lamb and feeling like I've put myself out there and this is what happens."
Woods reportedly turned down close to $1 billion from the PIF on behalf of LIV Golf. Other big names were surely offered deals in line with those reportedly signed by Phil Mickelson ($200 million), Dustin Johnson ($150 million) and Bryson DeChambeau ($125 million).
Monahan has stated more than once that the PGA Tour players' "loyalty will be rewarded," but the form in which those rewards will come remains a question. Perhaps the Player Impact Program (PIP) is relabeled the Player Loyalty Program (PLP) and players receive additional monetary prizes that way. The PGA Tour has numerous avenues through which they pay top players -- Comcast Business Top 10, PIP, Aon Risk Reward Challenge, etc. -- and as mentioned above, it now has funding to create several more. This shouldn't be an issue as long as the Tour does not make it one.
7. Will LIV Golf continue in any way as a tour? The general sentiment is LIV Golf will cease to exist. None of its social media accounts have addressed the deal, and Al-Rumayyan all but confirmed Norman is on the outside looking in (). Does this mean Johnson, DeChambeau and the rest of the LIV Golf members will immediately be reinstated on the PGA Tour or DP World Tour? Tuesday's announcement stated the organizations would "work cooperatively and in good faith to establish a fair and objective process for any players who desire to re-apply for membership" in those Tours.
If LIV Golf does persist, which some in the minority believe it will, its makeup may be drastically different. Perhaps the three tours come together Champions League-style with the top performers from each teeing it up every month with the other weeks left for normal, run-of-the-mill tournaments from each respective league. Perhaps LIV Golf becomes a team-event tour, separating it from the other traditional tournaments. The team aspect of LIV Golf may ultimately be its lasting impact, whether it trickles into the PGA Tour or exists otherwise.
8. How can the PGA Tour simultaneously have a for-profit business and 501(c)(6)? PGA Tour Inc. will still operate as a 501(c)(6) tax exempt organization. Even as the resident finance major on our CBS Sports golf team, I needed to reach out to a friend in mergers & acquisitions for further detail. The general point of a 501(c)(6) is to avoid paying federal taxes, which is allowed because there are no equity owners; everyone still earns salaries but no one takes home equity profits.
The PGA Tour, DP World Tour and the PIF are creating a new for-profit entity under which all three parties will combine their commercial operations. The PIF will come into this as equity investors only who are able to cash out returns if/when they choose.
9. Does this mean everyone is eligible for the Ryder Cup? So, let's get this out of the way first: The PGA Tour has nothing to do with the Ryder Cup. The PGA of America, the same organization that runs the PGA Championship, administers the Ryder Cup alongside their European counterpart along with some other parties.
Koepka, Johnson, DeChambeau and others have been eligible for the Ryder Cup this entire time as they are still in good standing with the PGA of America. The issue for them long-term had to do with garnering ranking points as the LIV Golf events did not award players Ryder Cup points. Koepka currently ranks second in the Team USA standings thanks to his play at the Masters and the PGA Championship but only has the U.S. Open and The Open to collect more points before the top six are set in stone.
Captain Zach Johnson will make his six captain's selections following the 2023 Tour Championship.
Things get a bit more complicated on the European side. Lee Westwood, Henrik Stenson, Ian Poulter, Sergio Garcia and others have resigned from the DP World Tour. Unlike the PGA Tour, the DP World Tour does run the Ryder Cup. To be eligible for the European Ryder Cup Team, one must be (1) European and (2) a member of the DP World Tour.
As previously mentioned, the three organizations involved in this deal will be working on a way for players to reapply to the PGA Tour or DP World Tour following the completion of the 2023 season. In order to satisfy the second criteria, Poulter, Garcia and friends would need to be reinstated before the end of the season and present proof of an exceptional circumstance to allow it. Could this happen? Yes. Is it likely to happen? No.
"I think it's a moot point, because all those guys have resigned their membership," said McIlroy. "If you're not a member of the [DP World] Tour you can't play the Ryder Cup. So to me it's a moot point."