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    Mistrust Looms Over PGA Tour as Deadline for Saudi Deal Nears

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    Rancor within the tour’s board could shape decisions about the final agreement and influence the sport for decades to come.The PGA Tour is less than three weeks 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 remains.The plan’s outline called for combining the moneymaking businesses of the PGA Tour, the venerable American circuit; and LIV Golf, the upstart league flush with billions of dollars in Saudi investment. The deal’s announcement on June 6, though, was short on the basics, including a total valuation and even modest support from many players. Six months later, unrest and mistrust are still pervasive inside the PGA Tour, as players, board members and senior executives struggle to repair ties after secret talks that led to the Saudi deal surprised even many in the boardroom.“Since June 6, trust has been broken at the top level,” 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 reinstate that trust.”Mr. Scott, the winner of the 2013 Masters Tournament, will assume a seat on the PGA Tour’s board next month. When he does, he will join a group that has lately felt splintered, as players on the board have repeatedly clashed with some outside directors. The rancor may not derail any deal, since many players are open to significant outside investment. But their frustrations with tour leaders — over both the secretive nature of how the deal came together and a feeling that players do not have a strong enough say in how the sport is run — could shape decisions about the details and the future makeup of the tour’s board, influencing golf for decades to come. Jay Monahan, the PGA Tour commissioner, said at the DealBook Summit last month that players “ultimately are going to 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 word. It faces headwinds outside the golf world, with the Justice Department prepared to scrutinize any arrangement for antitrust violations and senators digging into the tour’s ties to Saudi Arabia, and tour officials have spoken for months with potential American investors.The tour and Saudi Arabia’s wealth funds set a Dec. 31 deadline to finalize their deal, though the sides can extend their talks.A spokesman for the tour declined to comment.The tentative deal with the wealth fund, which came after the tour long insisted that LIV Golf was merely an attempt by the Saudi government to distract people from its human rights record, provoked an uprising among players, many of whom had spurned LIV’s lucrative payouts. The negotiations’ clandestine nature also fueled the anger. The tour sought to curb the revolt in August, when it agreed to add Tiger Woods to the board, evening the count between the golfers and outside directors at six each. And it vowed that the merchant banker Colin Neville, who had already been brought in to advise the players, would “be fully aware of the state of the negotiations.”Mr. Woods’s addition was a boon to the players, who figured his swagger and savvy would give their side more heft in the boardroom. It did. But Mr. Woods’s ascendance did not alter certain realities like, for instance, the voting thresholds required to make significant changes. As expected, it also did not dislodge the two directors who secretly negotiated with the Saudis: the board chairman, Edward D. Herlihy, a partner at the law firm Wachtell, Lipton, Rosen & Katz; and James J. Dunne III, vice chairman of the investment bank Piper Sandler.“I’ve learned that any great board, you need disagreement in order to get to the best solution, and we’ve had many disagreements this year — even the players have had disagreements,” said Webb Simpson, the winner of the 2012 U.S. Open and a member of the tour’s board. “But we’re trying to all get to a better place.”Although tour membership is limited to a fraction of the world’s finest golfers, the players have only so much influence over the appointments of outside directors to the board. That has long frustrated many players, who felt they were put in a subservient position to the independent board members. Worsening the atmosphere, a director many players saw as a good-faith collaborator, the former AT&T chief executive Randall Stephenson, resigned after the Saudi deal was announced. (Two players were on a committee that recommended Mr. Stephenson’s successor, Joseph W. Gorder.)Charley Hoffman, also a board member, said many players want more “accountability” from the board.Harry How/Getty ImagesCharley Hoffman, a longtime player who sits on the board, said he thought “the independents have the best interests of the players” in mind. But the tour’s structure ultimately limited players’ sway over their tour, he and others said, a particular sore point after the Saudi deal.“The word I hear echoing throughout the membership is ‘accountability,’” Mr. Hoffman said.Amid this scrutiny, the tour is considering bringing in additional U.S. investors alongside the Saudi wealth fund, which would assure investment in the tour before what could be a prolonged regulatory review of the Saudi deal. The tour said Sunday that it had entered talks with Strategic Sports Group, an investment group led by Fenway Sports Group — the parent company of the Boston Red Sox, the Liverpool Football Club and, years ago, Mr. Monahan’s employer.Fenway would inject $3.5 billion into a newly formed for-profit company that would have a valuation of up to roughly $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 with the deal, remain in flux.The announcement last week that the Saudis had recruited Jon Rahm, the world’s third-ranked player, to LIV disappointed and unnerved tour loyalists. It also fueled a surge in infighting, most prominently displayed in a Sports Illustrated article that depicted the golfer Patrick Cantlay as having outsize control over the tour’s destiny. Mr. Cantlay, the article said, “seemed more concerned about catering to elite golfers like himself” and suggested he was the leader of a group “driving negotiations.”Mr. Cantlay is the player on the board with the highest spot in the Official World Golf Ranking (fifth), but other directors downplayed the notion that he was in charge.“He just likes to think deep and see if there’s anything under the rocks that can improve the organization for everyone,” Mr. Hoffman said.Jordan Spieth recently replaced Rory McIlroy on the board.Mike Ehrmann/Getty ImagesJordan Spieth, a past winner of the British Open, the Masters and the U.S. Open who sits on the board, confessed to bemusement over accounts of Mr. Cantlay as a distinct power center. He thought Mr. Cantlay’s inquisitive, insistent style and vision had unsettled some people inside the tour hierarchy.“He’s challenged people who have been in a position to not be challenged for a long time, and I think that’s upset them,” Mr. Spieth said. “Because he comes from a place of trying to enforce some change where change is inevitable, but kind of do it in a way where the players have a massive role in how it looks, that challenges the status quo and makes him a target.”Mr. Cantlay said his approach to the role had not changed since June 6 and that, “in general, my mentality is just to put my head down and try to get the work done.”Mr. Stephenson is not the only director to have left. The superstar Rory McIlroy resigned last month. Although his replacement, Mr. Spieth, is a well-liked tour stalwart with a record of board service, the turnover has stoked unease.“The dynamic has been shook, obviously,” Mr. Scott said, adding, “The reasons don’t even really matter — at a critical time, that is not ideal.”Some board members believe that once a deal is done, tensions could ease almost automatically, especially if the board’s composition changes.“When we all go back to hitting golf shots and doing what we actually know how to do,” Mr. Hoffman said wryly, “this will all slow down.” More

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      Rory McIlroy Resigns From PGA Tour Board

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      The decision came about five months after the tour struck an agreement with Saudi Arabia’s sovereign wealth fund to create a joint company.Rory McIlroy, the esteemed golfer who was among the most outspoken opponents of his sport’s swelling ties to Saudi Arabia, has resigned from the PGA Tour’s board.The tour confirmed his departure in a statement on Tuesday night.“Given the extraordinary time and effort that Rory — and all of his fellow player directors — have invested in the tour during this unprecedented, transformational period in our history, we certainly understand and respect his decision to step down in order to focus on his game and his family,” Commissioner Jay Monahan and Edward D. Herlihy, the board’s chairman, said in the statement.Mr. McIlroy, the men said, was “instrumental in helping shape the success of the tour, and his willingness to thoughtfully voice his opinions has been especially impactful.”Mr. McIlroy’s agent did not respond to a message seeking comment.The decision by Mr. McIlroy came about five months after the tour, following secret negotiations, struck an agreement with Saudi Arabia’s sovereign wealth fund to try to create a joint company that would end golf’s money-fueled war for supremacy. Most board members, including Mr. McIlroy, had no knowledge of the agreement or the talks that led to it until shortly before it was announced in June and upended the duel between the tour and LIV Golf, the league Saudi Arabia built with a blend of billions of dollars and marquee defections from the PGA Tour.Mr. McIlroy soon expressed a pragmatic fatalism about the agreement — which calls for the tour and the wealth fund to combine their commercial golf businesses — and the proposed partnership with Saudi Arabia, which has been expanding its investments in sports.“If you’re thinking about one of the biggest sovereign wealth funds in the world, would you rather have them as a partner or an enemy?” Mr. McIlroy asked on June 7, the day after the tour announced the transaction, which has still not closed. “At the end of the day, money talks, and you would rather have them as a partner.”But he also made no secret that the tour’s machinations had blindsided and stung him. Few golfers had been more strident critics of LIV and the players who joined it, and the PGA Tour had benefited from the credibility of a four-time major tournament winner’s serving, in effect, as its leading public champion.“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,” Mr. McIlroy, who was also among the tour’s leaders during the pandemic, said at the same news conference in Toronto.Although he soldiered on, he signaled this week that he had tired of the role. Asked in the United Arab Emirates whether he was enjoying his board tenure, Mr. McIlroy replied: “Not particularly, no. Not what I signed up for whenever I went on the board. But yeah, the game of professional golf has been in flux for the last two years.”He gave no hint that an exit was in the offing.On Monday, the 12-member board finished a meeting at the tour’s headquarters in Ponte Vedra Beach, Fla., where it heard about a handful of bids for minority stakes that could usurp or come alongside any money from the Saudis. In a memo to players on Tuesday, Mr. Monahan, the tour’s commissioner, said the board had “agreed to continue the negotiation process in order to select the final minority investor(s) in a timely manner.”Mr. Monahan said in his memo that the tour had heard from “dozens” of prospects about potential investments and winnowed the candidates to a smaller group for board review. For the tour, which has faced blowback from Congress and the Justice Department over its evolving approach to working with Saudi Arabia, there are stakes beyond money.Some players and executives believe that a role for influential American investors could diminish Washington’s criticism of — and possible efforts to block — the transaction.“Even if a deal does get done, it’s not a sure thing,” Mr. McIlroy said this week. “So yeah, we are just going to have to wait and see. But in my opinion, the faster something gets done, the better.”Mr. McIlroy is the second person to resign from the tour’s board since the summer. In July, Randall Stephenson, the former AT&T chief executive, quit the seat he had occupied for a dozen years, citing his “serious concerns with how this framework agreement came to fruition without board oversight.” At the time, Mr. Stephenson wrote that he could not “objectively evaluate or in good conscience support” the agreement, especially given the conclusion of U.S. intelligence services that Saudi Arabia was responsible for the murder of the dissident journalist Jamal Khashoggi in 2018.Mr. Stephenson’s departure turned heads on Wall Street and in golf’s inner sanctums. But the decision by Mr. McIlroy is a particularly public blow to the tour and its board. Although the group still includes figures like Tiger Woods and Patrick Cantlay, Mr. McIlroy, 34, has long been one of golf’s most amiable stars.When the time came, though, for the tour to engage in negotiations with the wealth fund, he was among the board members left out of the talks.Only two members, Mr. Herlihy, a partner at the Wall Street law firm Wachtell, Lipton, Rosen & Katz, and James J. Dunne III, vice chairman of the investment bank Piper Sandler, were involved. The secrecy infuriated other board members and helped stir a player uprising that led to the summertime installation of Mr. Woods as a director.Hours before the tour acknowledged Mr. McIlroy’s resignation, it announced a replacement for Mr. Stephenson, Joseph W. Gorder, the executive chairman of Valero’s board. More

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      PGA Tour Board Meets To Discuss Merger With Saudi-Backed LIV Golf

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      The 11-member board did not vote on the surprise pact, whose most significant details are still being negotiated.The PGA Tour’s board, with its members gathered in the same room for the first time since a fraction of them negotiated a deal with Saudi Arabia’s sovereign wealth fund to reshape golf, signaled Tuesday that it intended to move ahead with the agreement and past an outcry that has stretched from clubhouse locker rooms to Capitol Hill.But it also made plain that closing the deal was no certainty.The board, as expected, did not vote on a deal stocked with tentative terms that call for a web of golf businesses — including the tour, the Saudi-backed LIV Golf circuit and the European Tour, now known as the DP World Tour — to be housed in a new company. The entity is expected to be flush with Saudi cash but, for now, under the day-to-day control of PGA Tour leaders. But executives hoped that the regular meeting of the board, which is expected to weigh the pact formally only once final terms are negotiated, would help stabilize the tour’s course during a turbulent run of internal division and global scrutiny.That period, executives and board members know, could last for months.Tour executives, the board said in a carefully worded statement Tuesday night, have “begun a new phase of negotiations to determine if the tour can reach a definitive agreement that is in the best of interests of our players, fans, sponsors, partners, and the game overall.”The board, wary of further alienating the players who make up the tour’s membership, some of whom were infuriated after being blindsided by news of the pact, said it was “committed to the safeguards in the framework agreement that ensure the PGA Tour would lead and maintain control of this potential new commercial entity.”The board’s meeting came three weeks after the surprise announcement of the deal, and one day after the tour gave a Senate subcommittee a copy of the five-page framework agreement. The tentative accord, signed in the early-morning hours of May 30 at a Four Seasons hotel in San Francisco, capped seven weeks of secret negotiations, but it was mostly notable for how few binding commitments it included — and how many consequential details remained to be sorted through.Although the tour and the wealth fund are expected to contribute their golf ventures, like LIV, into the new company, the deal’s architects signed the framework agreement so quickly that no valuations were included or, apparently, even completed in advance. The agreement does not quantify the scale of the wealth fund’s expected investment in the new company, though it offers an outline for its leadership structure and protects the Saudi fund’s investment rights.Its few binding clauses include a nondisparagement pledge covering the tour and the wealth fund (but not the players) and a truce that keeps the rival circuits from recruiting golfers from one another. If a final agreement is not in place by the end of the year, barring a mutual extension, the tour and the wealth fund can “revert” to their businesses without any financial penalty, like a breakup fee.Board approval, if it comes, does not guarantee that the deal will last. The Justice Department’s antitrust regulators are among the government officials examining the accord, and they could ultimately try to block it. The pact is also poised to draw scrutiny next month on Capitol Hill, where a Senate subcommittee has scheduled a hearing for July 11.But Tuesday’s meeting was seen as pivotal to the way forward for the tour and an 11-member board that includes five players and luminaries in business, law and finance. Only two members of the board, Edward D. Herlihy and James J. Dunne III, were involved in the negotiations that led to the deal, and it appears many board members did not know they were underway.The board meeting, held at a Detroit-area hotel, began in the early afternoon and stretched into the evening. A person familiar with the meeting, who spoke on the condition of anonymity to describe a private gathering, said it had not focused entirely on the deal; rather, the person said, the board also spent significant time on more technical matters of the sport, such as competition cuts and eligibility.The majority of the meeting focused on the framework agreement, though, with board members receiving a briefing from the tour’s bankers about how they will try to assign values to the circuit’s varied assets. Jay Monahan, the PGA Tour commissioner, was absent from the meeting in Dearborn; on June 13, the tour announced that he was going on leave as he recuperated from an unspecified “medical situation.”Board members did not comment as they left the meeting, allowing the statement to stand on its own. Only one player who sits on the board, Rory McIlroy, has publicly suggested any measure of support for the deal. In recent weeks, other players have said they wanted to learn more about the accord and what it would mean for the tour.But board members have been told in recent months that the tour could not afford to maintain its duel with LIV, the league founded with billions of dollars from the Saudi wealth fund that enticed some of the game’s biggest stars with guaranteed contracts and enormous prize money. The wealth fund was also facing some pressure as it confronted setbacks in a court battle against the tour, and as LIV struggled to attract audiences and attention in the United States for reasons beyond its financial backer.If the deal collapses, though, both sides have already secured a mutual victory: the dismissal of litigation in California after the tour, the wealth fund and LIV agreed to drop their clashing cases. The dismissals were made with prejudice, meaning that they cannot be refiled, even if the rest of the pact disintegrates.For as guarded as the tour’s statement was on Tuesday night, the dismissal of the litigation was mentioned in its very first sentence. More

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      For PGA Tour Players, Betrayal and Confusion in Saudi Deal’s Wake

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      Members of America’s most famous golf tour thought they had a voice. Then came a surprise pact that could reshape the sport for years to come.The U.S. Open winner Gary Woodland had lately sensed something different in professional golf.Players were empowered and emboldened. Executives were listening. The PGA Tour was changing. With the circuit’s dominance challenged by LIV Golf, an upstart built with billions of dollars from Saudi Arabia’s sovereign wealth fund, the tour felt closer to a cooperative than a dispassionate titan of professional sports.Then came the tour’s surprise announcement on June 6 that, after it had lobbied players to forsake the Saudi money it had associated with human rights abuses, the PGA Tour and the wealth fund would join forces. None of the five players who sit on the tour’s board learned of the deal more than a few hours before it became public.“It was turning toward players being heard over the last year,” Woodland, who became a professional golfer in 2007, said at the Los Angeles Country Club, where the U.S. Open will conclude on Sunday. June 6, he said, showed that the voices of tour players had suddenly been “thrown out the door a little bit.”Woodland is not an outlier. In interviews and during news conferences at the Open, top players described a shaken faith in a PGA Tour they believed had recently offered them more meaningful agency and greater influence. The tour’s ability to ease the restive atmosphere could influence whether the deal, which is facing significant skepticism inside the tour and in Washington, advances in the coming months.Compared to other prominent professional sports leagues in the United States, the PGA Tour, a tax-exempt nonprofit, has an unusual structure.Unlike in, say, the N.B.A. or the N.F.L., there are no team owners, and there is no labor union. Instead, players are independent contractors who earn eligibility for PGA Tour membership. Tour members do not generally have financial guarantees — they may, however, earn money through assorted sponsorships — but receive tour paychecks tied to their on-course performances. (When Viktor Hovland won the Memorial Tournament this month, he earned $3.6 million of the event’s $20 million prize fund. Golfers who did not play well enough to secure places in the final two rounds collected nothing.)In return for access to tour events and purses, players allow the circuit to negotiate television rights deals on their behalf, among other conditions. Even without a labor union, players theoretically have a say in tour operations: The 11-member board includes five seats for players, and there is a 16-player council that “advises and consults” with board members and the tour’s commissioner, Jay Monahan.But when tour leaders negotiated a framework agreement to reshape the sport in the most consequential ways since the modern tour’s founding in the 1960s, players were not in the room. Rory McIlroy, the world’s third-ranked golfer and a member of the tour’s board, learned of the deal a week after it was signed behind closed doors at a Four Seasons hotel in San Francisco.Deepening the turmoil, the tentative deal makes little about the future clear, mostly because lawyers and executives are still haggling over the fine print that stands to determine much about how the sport will be organized, funded and operated.“It’s just not easy as a player that’s been involved, like many others, to wake up one day and see this bombshell,” Jon Rahm said.Marcio J. Sanchez/Associated Press“I think the general feeling is that a lot of people feel a bit of betrayal from management,” said Jon Rahm, the winner of this year’s Masters Tournament.“It’s just not easy as a player that’s been involved, like many others, to wake up one day and see this bombshell,” he added. “That’s why we’re all in a bit of a state of limbo because we don’t know what’s going on and how much is finalized and how much they can talk about, either.”The sense of duplicity, some players suggested, might not be so severe had they not grown confident in the notion that they were increasingly central to developing the tour’s path for the years ahead.As Tiger Woods receded from golf’s spotlight, Woodland observed, players found their sport searching for figures to help set its tone and direction.“When I first started, you just went out and played and who knows what was going on,” said Woodland, who remains close to Woods. “It was pretty much everyone jumped on Tiger’s coattails and we just went.” More recently, Woodland said, “guys are starting to get a little more of their own voice, and you’re starting to see different opinions.”Faced with the rise of LIV Golf, players had helped devise changes to the tour’s format and schedule. During a private meeting in Delaware last summer they tried to hash out adjustments that could help curb an exodus to LIV. Afterward, Monahan declared that the Delaware meeting “represents a remarkable moment for the PGA Tour and showcases the essence of what being a membership organization is all about.”By the middle of last month, though, Monahan was in Venice for secret talks with Yasir al-Rumayyan, the governor of the Saudi wealth fund. Two board members, neither of them players, were on the trip to Italy. The men later gathered in San Francisco over Memorial Day to finish up the framework deal. Afterward, the circle of people who knew about the planned partnership expanded, but did not include any players until June 6, when tour and Saudi officials announced the pact. Some players learned about it on Twitter.The mood inside the tour only worsened as it became apparent that the deal had been constructed in extraordinary secrecy, with players’ representatives on the board shut out of the talks.Joel Dahmen said he recognized that voices of midlevel players like him would receive only so much priority in the tour’s strategic deliberationsEtienne Laurent/EPA, via Shutterstock“We were given the impression that we were being heard,” said Joel Dahmen, a professional player since 2010 whose public profile soared this year when he appeared in the Netflix documentary series “Full Swing.”Dahmen, a self-described “midlevel” guy, said he recognized that voices like his would receive only so much priority in the tour’s strategic deliberations. But many golfers were flabbergasted that even its greatest headliners were kept away from the negotiations, even as some of their colleagues said they understood that it was impractical to expect tour officials to confer with the entire membership in advance.“If you have to consult every player, then probably nothing’s ever going to happen, and that’s the balance for any organization,” said Adam Scott, the 2013 Masters winner and former world No. 1 player who chairs the tour’s Player Advisory Council. “It’s like the golf club at home: They’ve got the members’ committee, and a few on that committee get to influence decisions.”“It’s a player-centric tour,” Scott added, “but it depends where you’re sitting and how you look at things.”PGA Tour officials have rushed to quell the outrage, mindful that frustrations with the organization helped prepare the ground for LIV to entice players away from what is America’s flagship men’s golf circuit. Senior executives have been at the U.S. Open, and Monahan, who began a leave of absence this past week after what the tour described only as “a medical situation,” held a contentious meeting with players hours after the deal’s announcement.Players with some of the closest ties to Monahan and other executives said they had received a barrage of feedback unlike any they recalled. Webb Simpson, a board member who won the 2012 U.S. Open, said, perhaps with a dose of hyperbole, that he had probably heard more from players since June 6 than he had in his 15 years as a tour golfer.“We want to have unity, but we also want to trust our leaders,” said Simpson, who added that he had been calling players to hear out their misgivings and aggravations. “I think as a whole they are struggling with these decisions.”“It’s a player-centric tour,” Adam Scott said, “but it depends where you’re sitting and how you look at things.”Richard Heathcote/Getty ImagesAlthough McIlroy has signaled his support for the deal, other players with board seats have been publicly noncommittal.“I told myself I’m not going to be for it or against it until I know everything, and I still don’t know everything,” Simpson said.He sounded much like Patrick Cantlay, another board member, who said that “it seems like it’s still too early to have enough information to have a good handle on the situation.”The board is scheduled to meet later this month, but it is not clear whether the pact will be ready for a vote by then. At the very least, board members are expecting a briefing that might allow them to answer more detailed questions about the tour’s future.All players can do for now, many said, is to try to imagine what the tour might look like and where they might fit into a changed ecosystem.“Where I think I am — and a lot of other players are — is we’re going to show up at the biggest and best events that we have tee times at, the ones that pay the most money, and we’re going to go play until someone tells us we can’t play in those events anymore, and then we’ll go find other events,” Dahmen said.They are also settling in for a protracted period of uncertainty, grappling with the possibility that the tour could be in turmoil for another year or more. It is an unfamiliar road for many of them, after all of these years in which the tour was the unquestioned destination of choice for many of the world’s top golfers, its business model familiar.“As members or as players,” Scott said, “we haven’t had to deal with anything like this before.” More