Mergers, Acquisitions and Divestitures

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      How the PGA Tour-LIV Golf Merger Came Together

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      Jay Monahan, the PGA Tour commissioner, had gone unnoticed in Venice last month.With luck, he thought over breakfast near the Palazzo Ducale, his confidential talks in Italy with Yasir al-Rumayyan, the governor of Saudi Arabia’s more than $700 billion sovereign wealth fund, might stay secret. A leak would endanger what only a handful of insiders knew: that the PGA Tour was considering going into business with al-Rumayyan’s LIV Golf league, whose monthslong clash with Monahan’s tour had become a fight as much over golf’s soul as its future.Then Stefano Domenicali, Formula 1’s chief executive, strolled into view. He was in town for the same wedding that had brought al-Rumayyan to Venice. If the motor sports executive spotted the PGA Tour’s leader, he would assuredly connect the presences of Monahan and al-Rumayyan, and golf’s greatest secret might get out. All Monahan could do, he told people later, was try to dodge Domenicali’s gaze.But Domenicali never seemed to notice him. What would ultimately amount to seven weeks of clandestine meetings and furtive calls stayed hidden until a stunning announcement last Tuesday: The PGA Tour, the dominant force in men’s elite golf for decades, planned to join forces with LIV, the upstart that had provoked debate over the morality of Saudi money in the game.The agreement was a singular moment in the history of the professional game. The civil war that had disrupted and defined the once genteel sport — for example, Monahan once publicly asked whether PGA Tour players had ever felt compelled to apologize for competing on the circuit — was abruptly suspended. The tour’s reputation was stained and many of its loyalists were furious, but its coffers were poised to overflow.The deal, though not yet closed, was also a breakthrough for Saudi Arabia’s ambitions in golf. The culmination of a years-old plan called “Project Wedge,” the agreement gives al-Rumayyan, one of the kingdom’s most influential officials, a seat in the sport’s most rarefied rooms. And for a country that has craved a greater global profile, an economy based on more than oil and a distraction from its gruesome human rights abuses, the agreement was another step in its rapprochement with the West.This account is based on interviews with nine people with knowledge of the negotiations. Most of them spoke on the condition of anonymity to describe the lead-up to an extraordinary transaction — one so closely held that most of golf’s eminent bankers, lawyers and broadcast partners had no warning that it was even being discussed.It was not until this spring that even golf’s most connected power brokers grew confident a deal could happen this year, if ever. But there seemed enough conspicuous pressure points, some much more severe than others, that prodded both sides into secret talks.LIV had enticed some of golf’s most talented and bankable stars, including Brooks Koepka and Phil Mickelson, with contracts that sometimes promised them $100 million or more. The league’s television deal, though, had been meager, and its lawyers had acknowledged that its revenues were “virtually zero.” Federal judges in California added to LIV’s turmoil when they showed limited interest in shielding the Public Investment Fund from the kind of scrutiny it had generally avoided in other court battles in the United States.Brooks Koepka at this year’s Masters tournament, where he tied for second. The LIV golfer won the P.G.A. Championship the following month.Doug Mills/The New York TimesBut the PGA Tour, a tax-exempt nonprofit with an aging audience and a stiff reputation, was in greater peril. As part of a federal antitrust inquiry, Justice Department investigators were asking questions about heavy-handed tactics the tour used to discourage player defections and examining whether tour leaders were too cozy with other powerful golf organizations, like Augusta National Golf Club, the organizer of the Masters Tournament.More precariously, the tour’s efforts to retain the loyalty of players, which included raising prize purses by tens of millions of dollars, were severely straining its finances. The tour’s television contracts had been constructed before it was facing one of the richest conceivable rivals. And the tour’s legal fees had swelled to more than $40 million a year — up more than twentyfold from the start of the decade — as it waged fights some thought could last until at least 2026.Monahan had foretold something like this.“If this is an arms race and if the only weapons here are dollar bills, the PGA Tour can’t compete,” he said last June in Connecticut.Late in the year, the PGA Tour said a veteran deal maker, James J. Dunne III, would join its board, and some involved in the wealth fund wondered whether he would someday emerge as an emissary.He did on April 18, when a WhatsApp message flashed on al-Rumayyan’s phone. The tone toward one of the world’s most influential financiers, a figure often addressed as “Your Excellency” and close to Crown Prince Mohammed bin Salman, was strikingly casual.“Yasir,” Dunne began as he introduced himself and asked to arrange a call and, “hopefully,” a visit. He signed the message with equal informality: “Jimmy.”James J. Dunne III, a veteran deal maker, was named to the PGA Tour’s board late last year.Oisin Keniry/Getty ImagesThe approach, as optimistic and unguarded as men’s professional golf had been tumultuous and tense, led to a conversation within hours. Dunne and al-Rumayyan fast found a point of harmony that would shape the negotiations: Neither man insisted on a nondisclosure agreement.‘Let’s see how that would work.’London was neutral ground, only hours from golf’s birthplace in Scotland. The men decided they would meet there less than a week later, joined by Edward D. Herlihy, the chairman of the PGA Tour’s board. Herlihy was not any ordinary board member; more than a half-century after he earned his law degree, he was a partner at Wachtell, Lipton, Rosen & Katz and one of Wall Street’s most sought-after counselors for mergers and acquisitions.Even without nondisclosure agreements, the men concluded that any prospective deal would have to be weighed in private. Most members of the tour’s board, including Rory McIlroy, one of the world’s most renowned golfers and a ferocious critic of LIV, and the former AT&T chairman Randall Stephenson, would be largely shut out. Greg Norman, the two-time British Open winner who had envisioned something like LIV long before he became its commissioner, would not be at the bargaining table, nor would most of the seasoned bankers and lawyers the two parties had worked with over the years.Rory McIlroy with PGA Tour commissioner Jay Monahan last year. The talks cut out many board members including McIlroy.Erik S Lesser/EPA, via ShutterstockBut the negotiators also knew that an accord would not be reached at the initial gathering in London, in part because Monahan would not be in attendance as some of his allies took stock of the Saudis.In a meeting, and later at dinner and over cigars, Dunne, Herlihy and al-Rumayyan discussed their approaches to golf and their own lives, testing whether their budding rapport would endure across hours of face-to-face conversations.Dunne’s personal history made him an unlikely figure to connect with al-Rumayyan. More than one-third of his investment bank’s employees died in the 2001 attacks at the World Trade Center. Dunne had been out of the office playing golf that Tuesday. More than two decades later, after years of supporting the families of the victims, he was meeting with a senior official from a country many people still accused of having a role in the attacks. But al-Rumayyan and his allies, he felt, should not be blamed.“If someone can find someone that unequivocally was involved with it, I’ll kill him myself,” Dunne told the Golf Channel this past week. “We don’t have to wait around.”The morning after their dinner, al-Rumayyan and Herlihy beat Dunne and Brian Gillespie, a wealth fund lawyer, in a round at Beaverbrook Golf Club.At some point before the men parted ways after lunch, Herlihy said he believed it was essential that professional golf be unified. It was another clear signal that the tour was open to an armistice with the wealth fund that had thrown it, and golf at large, into chaos and acrimony.al-Rumayyan paused.“Let’s see how that would work,” he replied.The PGA Tour men told Monahan that he should meet his Saudi rival.Détentes and nervesal-Rumayyan was due in Venice in mid-May, scheduled to attend the wedding of the daughter of Lawrence Stroll, the billionaire Formula 1 racing titan. The lagoon’s islands were not exactly rife with golf courses, but the sides agreed that Venice would be where al-Rumayyan and Monahan would meet for the first time.Monahan, who had risen through Fenway Sports Group and then the PGA Tour before he became commissioner in 2017, had spent months studying and talking about al-Rumayyan.The tour had capitalized on LIV’s Saudi ties, harnessing American emotion and skepticism to sow moral doubts about the league. But now Monahan would undertake a covert mission to meet the man his team had vilified.Survivors and family members of victims of the Sept. 11 terrorist attacks, members of the organization 9/11 Justice, voiced their objections to LIV at Trump National Golf Club in July 2022.Doug Mills/The New York TimesThe group from the United States arrived behind schedule, after its plane required a diversion to Farnborough, England. A series of boat rides later, Monahan at last greeted al-Rumayyan and the Saudi executive’s wife and daughters before the men settled into a private session for about two hours.In the evening, al-Rumayyan went to the wedding, a glitzy gathering dotted with movie stars and world-class athletes. The Americans, preparing for serious negotiations the next day with al-Rumayyan, met for dinner. The trip would also include a meal with al-Rumayyan’s family and some of his closest lieutenants.To the tour’s negotiators, the meetings in Italy were the most pivotal of the conversations that would continue in video conferences, phone calls and gatherings in San Francisco and New York over less than a month.During Memorial Day weekend, the PGA Tour’s Cessna Citation X jet hopscotched from New York to San Francisco. Takeout burgers were brought aboard during a brief stop in Omaha, instigated by Michael Klein, the well-connected banker who was working with al-Rumayyan and invited on the trip.Most of the flight, which also included Monahan, Dunne and Herlihy, was devoted to ironing out some of the remaining details. The men were hoping to finalize things in San Francisco, where al-Rumayyan would attend meetings related to the wealth fund’s other business dealings.An agreement was close, its terms detailed across mounting pages of legalese, with the new company known simply as “NewCo.” Some of the negotiators were still nervous. A leak before a deal was signed, they were certain, would cause an uproar: How could the PGA Tour consider taking the Saudi money it had denounced?“What changed?” Monahan would say after the deal became public. “I looked at where we were at that point in time, and it was the right point in time to have a conversation.”“It was the right point in time to have a conversation,” Monahan said after the deal was announced.Erik S Lesser/EPA, via Shutterstock“I recognize that people are going to call me a hypocrite,” he said. “Anytime I said anything, I said it with the information that I had at that moment, and I said it based on someone that’s trying to compete for the PGA Tour and our players. I accept those criticisms. But circumstances do change.”In the early hours of May 30, after a bargaining marathon, a dozen or so people gathered at a Four Seasons hotel to sign and toast the deal behind closed doors.The PGA Tour contingent did not linger long. Monahan was due at an Ohio tournament that Jack Nicklaus, who had helped found the modern tour in the 1960s and rejected an offer worth more than $100 million to work with LIV, was hosting.A signed pact, intended to bring the moneymaking components of the PGA Tour and LIV, like television and sponsorship contracts, into a new company expected to be flush with Saudi cash, did not mean the deal was complete. No one had agreed on how to value assets since the litigation had left the rivals unable to delve into each other’s books. The deal did not demand a specific investment from the Saudis, but promised them the exclusive rights to inject cash into the new company. The PGA Tour would get Monahan as the company’s chief executive and a majority of board seats, including ones filled by Herlihy and Dunne. But al-Rumayyan would be the chairman.Many antitrust experts expect the agreement will intensify the Justice Department’s scrutiny of professional golf, in part since Monahan said the deal would “take the competitor off of the board.” On Capitol Hill, lawmakers have raced to condemn it.The tour, though, is expecting an investment well into the billions of dollars. The jockeying with a wealth fund aiming to be worth $1 trillion in the next few years will be over.Yasir al-Rumayyan, during a pro-am LIV event last fall, is set to be chairman of the combined organization.Jonathan Ferrey/LIV Golf, via Getty ImagesOn Tuesday morning, after a session in New York to finalize the deal’s rollout, Monahan and al-Rumayyan sat beside each other for a television interview. Around the same time, the cellphones of players around the world lit up with the news.Monahan soon flew to Toronto to face a gathering of golfers that he called “intense” and “heated.”Dunne and al-Rumayyan retreated to Long Island’s Deepdale Golf Club for another round.al-Rumayyan won again.Mark Mazzetti More

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      Trump Family Praises the PGA and LIV Golf Merger

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      The Trump family, which has been the host of LIV tournaments in the United States and a big booster of the series’ efforts to break away from the PGA Tour, expects to continue to see tournaments played at its golf courses once the merger is complete.“This merger is a wonderful thing for the game of golf,” Eric Trump said in an interview on Tuesday. “I truly believe that.”His father, Donald J. Trump, also praised the deal. On Truth Social, the former president’s social media platform and personal megaphone, he wrote: “Great news from LIV Golf. A big, beautiful, and glamorous deal for the wonderful world of golf.”The LIV series has been a boon for the Trump family, which lost major tournaments after the Jan. 6, 2021, assault on the capitol, including the one of golf’s four majors, the 2022 P.G.A. Championship. That tournament had been scheduled to be played at Trump National Golf Club Bedminster in New Jersey, but its organizer, the P.G.A. of America, stripped the club of the hosting rights days after the capitol attack.Last July, just before the first LIV tournament was played at Trump National Bedminster, Mr. Trump predicted that the series would ultimately merge, and he suggested that players that stayed loyal to the PGA Tour were making a financial mistake.“All of those that remain ‘loyal’ to the very disloyal PGA, in all its different forms, will pay a big price when the inevitable MERGER with LIV comes, and you will get nothing but a big ‘thank you’ from PGA officials who are making Millions of Dollars a year,” Mr. Trump wrote on Truth Social in July 2022. “If you don’t take the money now, you will get nothing after the merger takes place, and only say how smart the original signees were.”LIV has tournaments scheduled this year at Trump-owned golf courses in Florida and New Jersey, and it just completed a tournament at a Trump course in Virginia. Negotiations are underway for more potential tournaments at Trump-owned facilities next year, though it is now unclear if the series will continue in its current format.When asked if the Trump family had played a role in urging the PGA and LIV groups to merge, Eric Trump on Tuesday declined to comment. But he did say that the family has close friends developed over many years in the golf world, including those associated with the PGA and LIV groups. More

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      in Tennis

      CVC Capital Partners Will Invest $150 Million in WTA

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      CVC Capital Partners, the former owner of Formula 1, will take a 20 percent stake in a commercial subsidiary as the tour seeks to expand its marketing of events and players and increase prize money.SAN DIEGO — CVC Capital Partners, a global private equity firm that once owned the Formula 1 racing series and has remained a major sports investor, is joining forces with women’s professional tennis.The WTA announced Tuesday that CVC had become a commercial partner after making a $150 million investment that would give CVC a 20 percent stake in a new commercial subsidiary named WTA Ventures. The subsidiary will focus on generating revenue by managing, for example, sponsorship sales as well as broadcasting and data rights.“Hopefully this partnership will allow us to begin addressing that valley between the commercial rights that we are able to secure and the rights that the men are able to secure,” Steve Simon, the WTA’s chairman and chief executive, said in a telephone interview from Indian Wells, Calif., where the BNP Paribas Open is set to begin this week.Though prize money is equal for men and women at the four Grand Slam events, the gap in prize money for many stand-alone men’s and women’s events has widened in recent years. The chasm reached the highest levels in 20 years in 2022, with the men earning on average about 70 percent more than the women outside the majors.Last year, the ATP Finals, the season-ending championships on the men’s tour, offered $14.75 million in prize money. The equivalent women’s event, the WTA Finals, offered $5 million, with Iga Swiatek, the No. 1 women’s singles player, expressing disappointment at the disparity.The WTA has lost significant revenue because of the lack of tournaments in China. The tour had a major presence there and had signed a lucrative 10-year deal to stage the WTA Finals in Shenzhen, which offered $14 million in prize money in its first year as host in 2019. But China has canceled most professional sports events since the start of the coronavirus pandemic in 2020, and the WTA suspended all Chinese tournaments in late 2021 because of the allegations of sexual assault made by Peng Shuai, a Chinese former player who remains in China.The WTA has said it will not reinstate Chinese tournaments until it can have direct contact with Peng and a full and transparent investigation is conducted by the Chinese authorities into her allegations.Simon said on Monday that neither condition had been met and that the WTA was continuing to explore a multiyear deal to stage the WTA Finals in other cities in case the China window remains closed.“We will make a decision at the end of this month how we are going to proceed,” he said.Simon said he hoped the new CVC partnership would lead to a near-term increase in prize money at tour events. “You certainly will see a plan with respect to that, which will be forthcoming,” he said.But above all, he said, CVC’s investment will allow the tour to invest more in marketing the women’s game and in producing or commissioning media programming that will raise the profiles of players and tournaments.“To tell the story and to build the brand and to get directly to the consumer, which are some of the key things I think we have to do a better job of than we do today to enhance the commercial results,” Simon said. “As we improve the commercial results, things like player compensation become a lot easier discussion.”Simon said most of the WTA’s current rights deals would expire in 2026. He declined to disclose a timetable for when the tour would receive CVC’s $150 million investment.“But it’s certainly not something that is a drip effect,” he said. “We have significant funding coming in that’s going to allow us to invest over the next several years at levels we’ve never been able to before.”Iga Swiatek, the No. 1 player in women’s singles, expressed disappointment in the disparity in the prize money offered at the ATP Finals and the WTA Finals last season.Karim Sahib/Agence France-Presse — Getty ImagesSimon said the CVC deal was not directly linked to the lost Chinese revenue. “This hasn’t been done because of China,” he said. “I have had the concept for many years of bringing in some capital investment into our company, which I felt we needed to go to the next level.”But Simon was only recently able to get support for the move from the WTA board, and he emphasized repeatedly that the WTA still had autonomy despite the CVC deal.“The way we set all this up, WTA Tour Inc. is not touched,” he said. “The WTA still controls 100 percent all of the governance, regulatory and calendar issues.”But he acknowledged that tour and CVC officials would communicate to ensure that WTA decisions did not hurt commercial opportunities.“Absolutely we will,” he said. “But the WTA has complete control of both entities and can make the decisions it feels are in its best interest.”CVC will have no representative on the WTA board, but it will have two of the eight seats on the new WTA Ventures board, which will be chaired by Simon.CVC, based in Luxembourg, was founded in 1981 and has 25 offices worldwide and more than $100 billion under management. The WTA investment is relatively modest compared with the more than $2 billion it spent in 2021 to acquire a 10 percent stake in the commercial arm of La Liga, Spain’s leading soccer league. CVC also paid more than $700 million in 2021 to acquire the Ahmedabad cricket franchise in the Indian Premier League and about $500 million more the same year to take a 14.3 percent stake in the Six Nations rugby union series. CVC agreed to sell its controlling ownership stake in Formula 1 to the American company Liberty Media in 2016.Tennis has had some spectacular misfires with outside investors. In 1999, ISL Worldwide, a Switzerland-based marketing company, signed a 10-year agreement for $1.2 billion with the ATP that fell apart two years later. In 2018, the International Tennis Federation signed a 25-year, $3 billion deal with Kosmos, a Spanish investment group, that led to radical changes in the Davis Cup team event, but the partnership imploded this year.CVC has held talks with the ATP, but its tennis investment is only in the women’s game. For now.Simon continues to favor convergence and has even expressed interest in a merger between the ATP and the WTA at some stage.“If we can ever get to the point where we could bring it all together, this agreement with CVC allows for that to happen,” Simon said. More

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      Mat Ishbia to Acquire Phoenix Suns and Mercury For $4 Billion

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      Ishbia, the chief executive of United Wholesale Mortgage, would replace Robert Sarver as the teams’ majority owner. Sarver was pushed to sell amid a workplace misconduct scandal.Mat Ishbia, the chief executive of United Wholesale Mortgage, and his brother, Justin Ishbia, have agreed to buy a majority stake in the N.B.A.’s Phoenix Suns and the W.N.B.A.’s Phoenix Mercury in a deal that values the teams at $4 billion.Mat Ishbia and Robert Sarver, the majority owner of the teams, announced the agreement Tuesday night. Sarver had said he would sell the teams in September, after an N.B.A. investigation found that he had mistreated employees over many years, including by using racist language.The deal is for more than 50 percent ownership, including all of Sarver’s stake. It will not be finalized until it is approved by the N.B.A.’s board of governors.“Mat is the right leader to build on franchise legacies of winning and community support and shepherd the Suns and Mercury into the next era,” Sarver said in a statement.The valuation of $4 billion is about 10 times what a Sarver-led group paid for the teams in 2004 and would be a league record. The previous high price was Joe Tsai’s full acquisition of the Nets in 2019 that valued the franchise at $2.35 billion. It is the second-most expensive acquisition of an American sports franchise in history, behind only the sale of the N.F.L.’s Denver Broncos for $4.65 billion earlier this year.In September, the N.B.A. suspended Sarver for a year and fined him $10 million — the maximum allowed — after an investigation found that he had used racial slurs and treated female employees inequitably over many years. The punishment generated significant backlash, with players and fans saying that it was not harsh enough. Amid that pressure, Sarver said he would sell the Phoenix basketball teams, citing an “unforgiving climate.”Ishbia, 42, who played for Michigan State’s men’s basketball team, has wanted to buy a professional sports team for some time. Justin Ishbia is a managing partner at the Chicago-based investing firm Shore Capital. Last month, Mat Ishbia announced that he was interested in purchasing the N.F.L.’s Washington Commanders. He had also bid for the Broncos before they were sold in June to the Walton and Penner families.Ishbia began researching the Suns organization after Sarver decided to sell his stake, and he spent time in Phoenix during the past two months to better understand the market, according to a person familiar with the negotiations. Ishbia “fell in love” with the market and decided to aggressively pursue purchasing the team, the person said. Ishbia lives in the Detroit area, where United Wholesale Mortgage is based, and would not move to Phoenix if he is approved to buy the teams, the person said.In a statement Tuesday, Ishbia said he was “extremely excited” about the deal to buy the teams. “I have loved experiencing the energy of the Valley over the last few months,” he said. “Basketball is at the core of my life.”Ishbia was a guard for Michigan State, where he won a national championship in 2000. He told Crain’s Detroit Business in 2020 that he was the “14th best player on a 14-person team.” After graduating from business school at Michigan State in 2003, Ishbia began to work for United Wholesale Mortgage, which his father, Jeff Ishbia, founded in 1986. Mat Ishbia was named chief executive in 2013, and the company went public in 2021.Now Ishbia hopes to take over the Suns organization, which has been in the spotlight since ESPN published a story in November 2021 in which several current and former employees accused Sarver of fostering an inappropriate work culture. The N.B.A. commissioned an investigation, conducted by an independent law firm, which found that Sarver “clearly violated common workplace standards.”According to the investigators’ report, Sarver used a racial slur at least five times; told a pregnant employee that she would be “unable to do her job upon becoming a mother”; and often made crude jokes about sex and commented on women’s bodies.In one instance from 2011, according to the report, Sarver brought a female employee to tears after berating her about a video she had produced. Later, Sarver asked the employee, “Why do all the women cry around here so much?”Sarver said that while he disagreed with parts of the report, he accepted the league’s decision and apologized for his “words and actions that offended our employees.” Suns guard Chris Paul was among the players who called for a tougher punishment than the fine and suspension the N.B.A. issued. As pressure mounted, Sarver announced that he would sell the Suns and the Mercury.The Suns have been among the best teams in the Western Conference for the past three seasons. Led by the star guard Devin Booker, they made the N.B.A. finals in 2021 and lost in six games to the Milwaukee Bucks. During the 2021-22 season, they set a franchise record for wins in a regular season with 64 but lost in the second round of the playoffs.This season, Phoenix had a 19-12 record as of Tuesday afternoon, tied for the most wins in the West.The Mercury, who share a practice facility with the Suns, have not missed the playoffs since 2012. They won the W.N.B.A. championship in 2014 and lost to Chicago in the W.N.B.A. finals in 2021. Last season, the Mercury went 15-21 as they coped with the absence of one of their stars, Brittney Griner.Griner was in custody in Russia from Feb. 17 until Dec. 8, when the U.S. State Department negotiated her release through a prisoner swap. She had been detained outside of Moscow when customs officials said they found hashish oil in her luggage. Griner was convicted on drug charges and began serving a nine-year term in a prison colony this November. The State Department said in May that she had been “wrongfully detained.”Upon returning to the United States, Griner was taken to a military hospital in Texas that helps soldiers and civilians dealing with trauma with their recoveries. Griner left to go home on Friday and rode home with three members of the Mercury organization who surprised her at the airport: Diana Taurasi, a fellow star player; Vince Kozar, the team president; and Jim Pitman, the general manager. More

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      The Hollywood Merger That Could Reshape Soccer’s Transfer Market

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      As two behemoths join forces against boutique agencies in the fight for control and commissions, some fear profits could come before players.LONDON — Everything about the deal seemed to connote vastness. Most obviously, there were the figures: The merger created a company with a combined value of an estimated $5 billion. There was the language, too. A “landmark,” according to Variety. “Seismic,” The Los Angeles Business Journal said.In this case, though, time is the best way to gauge scale. It was in September last year when word filtered out of Los Angeles that two of the world’s biggest talent agencies, Creative Artists Agency and ICM Partners, had decided to join forces, but it was not until June that the union was given the green light.The nine-month delay could be attributed to antitrust investigators combing through the deal, trying to establish whether the unified agency would wield too much power. The Justice Department and the Federal Trade Commission reportedly cast an eye over the prospective merger.The central concern was the potential impact on Hollywood from having two of its most influential agencies become one market-dominating behemoth, and what that might mean for the industry. The Screen Actors Guild, for one, expressed concerns that its members might be “disadvantaged” by the deal.At no point did anyone feel the need to mention soccer. It is there, though, where the deal’s impact might be felt most keenly.Both CAA and ICM have, in the last three years, expanded into soccer. In 2019, CAA acquired Base Soccer, one of Britain’s biggest sports agencies, with more than 300 professional clients. A year later, ICM completed a deal to buy the even-bigger Stellar Group, in what was thought to be the most expensive acquisition in the company’s history.For years, Base and Stellar have been powerhouses — Stellar, the largest agency in the sport, represents more than 800 clients — but they have also been rivals, and not always cordial ones. But as soon as the Justice Department signed off on CAA’s acquisition of ICM, they became teammates.That has ramifications, of course, for the firms, the agents who staff them and the players whom they call clients — including stars like Gareth Bale, Jack Grealish and Eduardo Camavinga. But the scale of the combined venture may also have a profound effect on the delicate power balance in the fraught, lucrative player trading business which acts as the financial engine for the most popular sport in the world.Poetic LicenseErkut Sogut, an experienced agent, has written a novel about the sometimes sordid industry in which he works.Gualter Fatia/Getty ImagesThere is one element of Erkut Sogut’s debut novel that, he admits, belongs squarely in the realm of fantasy. Soccer is not, he wants to emphasize, actually controlled by a cabal of superagents who will resort to anything — sabotage, match-fixing, kidnapping, murder — to keep the game and its riches in their vise.Everything else, he maintains, is real. More than that, in fact: The plot of his book, “Deadline,” a thriller set against the backdrop of soccer’s transfer market, is drawn from firsthand experience. Sogut has spent 15 years as an agent, and he is best known for his longstanding association with Mesut Özil, the onetime Arsenal, Real Madrid and Germany playmaker. It is a world, he said, that does not demand a great deal of poetic license.The portrait of the industry he paints is not a flattering one. His characters are, by and large, hucksters and vultures, charlatans and sharks, operating in a sport rife with corruption and addled with cronyism. It is, though, intrinsically familiar: Soccer has grown accustomed to the depiction of agents as puppet masters in sharp suits and designer sunglasses, wielding ultimate influence over the fates of players and teams.That image, though, the one that suffuses Sogut’s novel, does not quite capture the reality of the industry as it stands now. The likes of Jorge Mendes — consigliere to Cristiano Ronaldo and José Mourinho — may be cast as rainmakers possessed of sufficient clout to bend the whole market to their will, but they increasingly seem like the exception, rather than the rule. The world of agents is in convulsion, soccer’s latest battleground between new money and old hands.Though FIFA’s controversial decision, in 2015, to deregulate the industry opened the doors to any family member or friend who wanted to sign up to represent a player — a move that turned a chaotic and irrevocably murky world into a “complete free-for-all,” as one agent put it — the most significant new entrants in recent years have not been cowboy operators hoping to make a quick buck but established corporations panning for new fortunes.That market now includes not only CAA — which first entered soccer by handling the commercial deals of Mendes’s stable of stars — and ICM, but also the California-based sports agency Wasserman. The latter established a beachhead in English soccer in 2006, but has expanded rapidly in the last two years, acquiring another British agency, Key Sports, and the Spanish firm Top Value, as well as opening a German office.The appeal is no mystery. According to FIFA, agents and intermediaries made more than $500 million in commissions last year alone. In 117 deals, those paydays ran to more than $1 million. Even that seems like small change in comparison to, say, the deal that sent Erling Haaland to Manchester City this summer: His representatives are reported to have earned somewhere in the region of $40 million simply for delivering his signature.Those sorts of figures are difficult to resist. “Football is the No. 1 sport in the world,” said Jonathan Barnett, a co-founder of Stellar. “If you want to be a major sports agency, you have to be involved.”The deal that sent Erling Haaland to Manchester City paid off handsomely for him and his representatives.Craig Brough/ReutersThe Benefits of ScalePlenty of people have offered to buy Andy Evans’s business in the last few years. There have been inquiries from other soccer agencies and from firms that have never worked in soccer. There have been talks with several companies in Britain and at least one from the United States. None of the approaches, in Evans’s view, have felt quite right.Sometimes the finances have not added up. Sometimes Evans has not been sold on exactly what a new owner had planned for World in Motion, the agency he founded a quarter century ago. Mostly, though, he has not been inclined to sell at all. “I’ve been running it for a long time,” Evans said. “I’m not especially inclined to not run it.”The client list he has established is an impressive one — it includes Aaron Ramsdale, the Arsenal goalkeeper, and the England defender Conor Coady — but Evans has never had any desire to operate at the sort of scale of Base and Stellar. That was a conscious choice: He has long believed there was an advantage in being a David.He is conscious, though, that the arrival of the corporations, and in particular the merger between CAA and ICM, could start to alter that equation.Whenever he pitches a prospective client, Evans finds that the first question is always the same. “It is always, ‘Who else do you represent?’” he said. “Players want to know that more than anything else. They know that if you don’t know anyone, you can’t get anything done. People just wouldn’t pick up the phone.”That gives the monolith that has emerged from the union of CAA and ICM — and, as a result, between Base and Stellar — an almost unassailable advantage. Neither firm expects to lose any soccer agents as a result of the merger; the intention is to grow the client list rather than shrink it. The answer to the question “Who else do you represent?” might as well be “everyone.”“It has been a huge advantage in terms of commercial, marketing, organization,” Barnett said earlier this year, before the merger had been approved by the Justice Department, but he was adamant that even becoming part of ICM had been “fantastic” for both his staff and his clients. The impact of joining forces with CAA could be only greater still.Heavy LiftingMichael Yormark in 2013. He joined Roc Nation a year later.Omar Vega/Invision/APMichael Yormark, with his cut-glass jaw and his close-cropped hair, does not seem the sort to be easily intimidated. A veteran agent, he has spent the last six years steering the expansion of Jay-Z’s Roc Nation label into international sports, painstakingly building out a roster of clients that started, by accident, with Jérôme Boateng and has since grown to include the Belgian star Romelu Lukaku and the Chelsea defender Reece James.Yormark might then have been expected to greet the prospect of a colossal new rival on his turf with something sandwiched between reluctance and dread. Instead, in an interview at Roc’s London headquarters, he seemed genuinely enthusiastic. “That deal is great for us,” he said.His logic is straightforward. Roc Nation’s pitch to prospective clients is based on what Yormark described as a “360-degree service,” one that focuses as much, or more, on meeting their aspirations away from the field than on negotiating new contracts or arranging money-spinning transfers. The label keeps its client list small by design.“The heavy lifting is in helping build a brand, a platform, whatever they want to do,” Yormark said. That is not possible, his company contends, with a client list numbering in the hundreds. “It would be hard to do what we do with 150 clients,” said Alan Redmond, Roc Nation’s head of football. “It would be impossible if we had 400.”Inside CAA, those concerns are airily dismissed. Executives believe that the company’s scale belies its flexibility. The example often cited is the N.B.A. player Zion Williamson of the New Orleans Pelicans.Williamson, when selecting his representation, made clear that he wanted a “boutique” feel, precisely the kind of treatment that Roc Nation has made its hallmark. To win his signature, CAA pivoted. Williamson and his family, one CAA executive said, have two points of contact at the agency, no more. The fact that those representatives are merely a tiny part of a giant company is hidden from view.There are others, though, who worry that the type of representation players might receive is far from the most significant consequence of the merger.While the arrival of corporations — with shareholders and workplace cultures and public images to worry about — may hint at an encroaching professionalization in what has traditionally been the kind of lawless industry Sogut’s novel depicts, it also exposes players to the possibility that their futures will be determined by a greater need to bolster a parent company’s bottom line.“If you have an agent who is under pressure to move you early because it is the best thing for the agency, it can compromise a career,” as one veteran agent put it.That has always been a risk for players, of course. They have always been vulnerable to their careers being shaped by their agents’ interests outweighing their own. It is that tension that makes the world of agency such a rich, compelling setting for a thriller, for example. There have always been sharks in the water. The only thing that has changed is the size of the fish. More

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      Inside the Chelsea Sale: Deep Pockets, Private Promises and Side Deals

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      Britain’s government has cleared the sale of the Premier League soccer team. But to win approval, the new owners had to agree to a set of unusual conditions.LONDON — The British government on Wednesday gave its blessing to the purchase of Chelsea F.C., one of European soccer’s blue-ribbon teams, by an American-led investment group after deciding it had sufficient assurances that none of the proceeds from the record sale price — $3.1 billion — would flow to the club’s Russian owner.The government’s approval signaled the end of not only the most expensive deal in sports history but possibly the most fraught, cryptic and political, too.In the three months since the Russian oligarch who owns Chelsea, Roman Abramovich, hurriedly put his team on the market, the club’s fate has played out not only on the fields of some of world soccer’s richest competitions but in the corridors of power at Westminster and the soaring towers of Wall Street. And all of it is against the backdrop of crippling financial sanctions imposed after Russia’s invasion of Ukraine.“We are now satisfied that the full proceeds of the sale will not benefit Roman Abramovich or any other sanctioned individual,” the government said in a statement. The path to a deal has entangled a scarcely probable cast of characters — private equity funds and anonymous offshore trusts; lawmakers in Britain and Portugal; an octogenarian Swiss billionaire and the American tennis star Serena Williams; an enigmatic Russian oligarch and a little known Portuguese rabbi — and featured a contested passport, wartime peace talks and even reports of an attempted poisoning.Its end leaves as many questions as answers. All that can be said for certain is that a group led by the Los Angeles Dodgers co-owner Todd Boehly and largely financed by the private equity firm Clearlake will now control Chelsea, a six-time English and two-time European champion, and Abramovich will not.The American investor Todd Boehly leads a group that is now set to complete its purchase of Chelsea.Adrian Dennis/Agence France-Presse — Getty ImagesAbramovich first indicated his intention to sell Chelsea — the most high-profile of his assets by some distance — almost as soon as the Russian army crossed into Ukraine in late February, and only a week before Britain and the European Union identified him as a key ally of President Vladimir V. Putin of Russia and froze his assets.Completing a deal, though, has proved fiendishly convoluted. The final obstacle to a sale was resolved only this week, when lawmakers in Britain were sufficiently satisfied that a $2 billion loan owed to an offshore trust, believed to be controlled by Abramovich, had been cleared. British government officials then tried to reassure their counterparts in Portugal, which had controversially granted Abramovich a Portuguese passport with a rabbi’s help in 2018, and the European Union, which had imposed its own sanctions on Abramovich in March. Both must also approve the sale because of his Portuguese citizenship.But the loan was not the only complication faced by Raine, the New York-based investment bank recruited by Abramovich to handle the sale. The agreement with Boehly’s group came with a web of conditions, some set by the British government, some by Raine and some by Abramovich himself, all of them striking in the context of the sale of a sports team.Better Understand the Russia-Ukraine WarHistory and Background: Here’s what to know about Russia and Ukraine’s relationship and the causes of the conflict.How the Battle Is Unfolding: Russian and Ukrainian forces are using a bevy of weapons as a deadly war of attrition grinds on in eastern Ukraine.Outside Pressures: Governments, sports organizations and businesses are taking steps to punish Russia. Here are some of the sanctions adopted so far and a list of companies that have pulled out of the country.Stay Updated: To receive the latest updates on the war in your inbox, sign up here. The Times has also launched a Telegram channel to make its journalism more accessible around the world.All four prospective suitors identified by Raine as serious contenders — Boehly’s group; one headed by the British businessman Martin Broughton that included Williams and the Formula 1 driver Lewis Hamilton among its partners; another financed by Steve Pagliuca, the owner of the N.B.A.’s Boston Celtics; and one from the Ricketts family, who control baseball’s Chicago Cubs — were asked not only to pay a jaw-dropping price for the team but also to commit to a number of pledges, including as much as $2 billion more in investments in Chelsea.The club’s suitors were told, for instance, that they cannot sell their stake within the first decade of ownership and that they must earmark $125 million for the club’s women’s team; invest millions more in the club’s academy and training facilities; and commit to rebuilding Stamford Bridge, Chelsea’s aging West London stadium.Chelsea’s new owners agreed to several conditions, including sizable investments in the club’s decorated women’s team.Michael Regan/Getty ImagesAt the same time, Abramovich insisted that all the proceeds from the sale would go toward a new charity to benefit the victims of the war in Ukraine. To ensure he does not gain control of that money, the British government will require it first be placed in a frozen bank account that it controls. Only then will it vet all the plans for the fund being drawn up by Mike Penrose, a former head of a branch of the United Nations children’s charity UNICEF, and issue a special license that will allow the charity to take control of the funds.“We will now begin the process of ensuring the proceeds of the sale are used for humanitarian causes in Ukraine, supporting victims of the war,” the government said in its statement.The charity was just one of the peculiarities of the deal arranged by Joe Ravitch, the Raine co-founder who directed the sale.The new owners also will not be permitted to take dividends or management fees or load the team with debt — terms that bankers related to the sale have described as “anti-Glazer clauses,” a reference to the unpopular owners of Manchester United who took control of the club in a leveraged buyout in 2005.Several people close to the process said Boehly’s bid was eventually selected from the group of wealthy suitors because of its willingness to abide by the clauses. (At least one of those people, who worked on the bid backed by Pagliuca, said their group withdrew from the running because of the nature of the conditions.)The Premier League has already signed off on the Chelsea sale, announcing Tuesday that it had vetted and approved the new owners “subject to the government issuing the required sale license and the satisfactory completion of final stages of the transaction.”It is not clear, though, quite what will happen if Boehly and his partners choose to renege on any of the conditions once they have control of the club. Any oversight role will fall on the charity, the only outside entity still inextricably linked to both Chelsea and Abramovich, or the continued influence of two key Abramovich lieutenants who hope to remain in their posts under the new owners.Both of those executives — the club chairman Bruce Buck and Marina Granovskaia, a Russian-born businesswoman who rose from being Abramovich’s personal assistant to the most senior official response for soccer trades at Chelsea — will earn at least $12.5 million for their work on the sale. The commissions to management, totaling as much as $50 million, and the fee to Ravitch, believed to be between 0.5 and 1 percent of the deal’s value, will be paid from the club’s balance sheet and not from the sale funds, according to a person familiar with the structure of the deal.Abramovich on a banner at Stamford Bridge. Beloved by fans for his spending on the team, he is barred from receiving any money from its sale. Clive Rose/Getty ImagesBritish government officials had clashed with Chelsea executives and financiers about creating a legally binding resolution to prevent Abramovich from getting access to the money he so publicly said he was willing to waive.At issue was a company called Camberley International Investments, run by a Cypriot trustee on behalf of what British officials believe was Abramovich and his children. Camberley lent $2 billion to Fordstam, the company through which Abramovich controlled Chelsea, to finance its spending and operations. Camberley’s claim against Fordstam has now been resolved, and its trustee has recently resigned.It was only at that point, with a May 31 deadline for the completion of the sale looming, that Britain’s government moved to approve the deal.For Chelsea’s fans, the sale draws an end to a season that at times blurred into absurdity. The sanctions imposed on Abramovich — and by extension Chelsea — affected everything from the team’s travel to the printing and sale of game programs. Thousands of empty seats dotted Stamford Bridge during games over the final months of the season after a ban on new ticket sales, and roster turmoil loomed because of a moratorium on the signing and sale of players.That will now be lifted, with Chelsea’s players and Manager Thomas Tuchel said to be urgently seeking clarity from Boehly and his group on their plans. At least two key defenders are slated to leave Chelsea this summer, and at least two more players — including the club captain, Cesar Azpilicueta — are expected to follow.Defender Antonio Rüdiger, unable to negotiate a new contract, announced he would leave Chelsea for Real Madrid. Other key players may depart this summer, too.Alastair Grant/Associated PressBoehly, a regular presence at Chelsea games since his takeover was announced on May 6, has broadly said he would like to maintain Chelsea as a major force in soccer. It is unlikely, though, that a group largely backed by a private equity firm will prove quite so indulgent as Abramovich was as an owner.In almost two decades at Chelsea, Abramovich was a familiar but all but silent presence at Stamford Bridge, happy to let his money do the talking. Under his leadership, Chelsea was transformed into a true European superpower, winning five Premier League titles and two Champions League crowns by employing a succession of A-list managers and investing billions of dollars in players.His largess changed Chelsea but also soccer as a whole, ushering in an era of unfettered spending that saw transfer fees and player salaries rise to levels unthinkable only a few years earlier. It also came at a price that Chelsea’s income, no matter how much it grew in those years of plenty, could not match. Throughout his tenure, Abramovich used his vast personal fortune to subsidize losses that ran as high as $1 million a week.Yet just as Abramovich’s arrival in 2003 opened the door to a new era for English soccer, his departure serves as a bookmark, too.While scarcity may explain part of the rush to pay a premium for Chelsea — soccer’s biggest teams are rarely up for sale, after all — it is not clear when, or how, a group of private equity investors who navigated such treacherous, confounding waters to get control of the club can start to realize a return on their investment. More

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      Chelsea F.C. Says It Will Sell to Boehly’s U.S.-Led Group

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      Chelsea, the Premier League soccer team whose sale was forced after the Russian oligarch who bankrolled its success was placed under crippling sanctions, will be bought by a consortium led by Todd Boehly, an American billionaire who is a part-owner of the Los Angeles Dodgers, the club said on Saturday.The price of 2.5 billion pounds, or $3.1 billion, would be the most ever paid for a team in any sport. The sale, one of the more unusual in modern sports history, still requires the approval of the British government, which imposed the sanctions on the club’s owner, Roman Abramovich, and froze his assets, including Chelsea, in the wake of Russia’s invasion of Ukraine.In a statement posted on its website early Saturday, Chelsea said the proceeds from the sale would be placed into a frozen British bank account, with the intention that all of the funds will eventually go to charitable causes, as Abramovich has promised.In addition to the sale price, Chelsea said, Boehly’s group had pledged to invest 1.75 billion pounds in the club, some of it for much-needed stadium renovations.Boehly’s group is being backed by the American investment firm Clearlake and also includes Hansjorg Wyss, a Swiss businessman, and Mark Walter, an American financier who serves as a co-owner and the chairman of the Dodgers.The decision capped two tumultuous months for Chelsea, its fans and Abramovich, who said on March 2 that he had reluctantly agreed to part with the team, just as Britain’s government was moving to impose restrictions on his fortune and his businesses.The sale process was accelerated once the government formally froze Abramovich’s assets, part of a wider set of sanctions imposed on a group of wealthy Russians with ties to Moscow after the war in Ukraine began. The government has called Abramovich a close ally of Russia’s president, Vladimir V. Putin.Roman Abramovich has owned Chelsea since 2003.John Sibley/ReutersChelsea has been in a kind of limbo ever since, operating under a special license issued by the government, which comes with strict conditions that have severely affected its business. The team is currently unable to buy or sell players in the summer transfer market, nor can it sell tickets or merchandise to its supporters. Its spending has been severely restricted, affecting everything from the team’s travel to the printing and sale of programs.The restrictions, meant to ensure that no money flows to Abramovich, will only be lifted once the sale is completed.Chelsea, led by Thomas Tuchel, the German coach who secured the Champions League title within months of taking over at Stamford Bridge last year, has endured on-field difficulties as it tries to navigate its new reality. The results have been mixed: While Tuchel’s team currently is in third place in the Premier League, it was eliminated from the lucrative Champions League last month. Several players with expiring contracts have announced that they will leave at the end of the season, and until the sale is completed, Tuchel and the club have no way to replace them.Boehly’s group was given a week to close the deal after being chosen last week as the preferred bidder by the New York-based advisory firm Raine Group and Chelsea’s board members.The sale was nearing a conclusion last week when it seemed to be upended, after one of Britain’s richest men, Jim Ratcliffe, announced a bid that mirrored the offer from Boehly’s consortium, after the deadline had passed. On Wednesday, Ratcliffe, who had emphasized his British credentials when making his offer, said Raine had dismissed his bid but vowed to keep fighting to secure the team.Chelsea’s price tag compares with the £1.8 billion valuation ($2.3 billion) for its London rival Arsenal, in 2018, after its American benefactor, the businessman Stan Kroenke, became the sole owner of the club by buying out the 30 percent stake of another now-sanctioned Russian oligarch, Alisher Usmanov, for more than $700 million. Unlike Chelsea, Arsenal has a modern stadium and its finances have been stable.Britain’s Treasury will have to issue a separate license for the sale to go through, with specific clauses that include a requirement that none of the sale proceeds go to Abramovich.The buyers and Raine have discussed the possibility of the proceeds going to victims of the war in Ukraine, an idea that Abramovich raised when he said he would waive an enormous debt owed to him by the club. But it is unclear how such a transfer would work.Todd Boehly, the American who leads the group that has reached an agreement to buy Chelsea, was at the club’s match against Wolves on Saturday.Justin Tallis/Agence France-Presse — Getty ImagesAbramovich invested nearly $2 billion of his personal funds during his 19-year tenure as owner, during which he covered losses of about $1 million a week as he recruited some of the best players in the world. The strategy was expensive but successful: Chelsea enjoyed the most successful period in its history, becoming a serial contender for domestic and international honors and winning five Premier League and two European Cups.If Boehly’s deal to buy the team goes through with the required approvals from the government and the Premier League, which also has to give its blessing to the sale, his group will have to figure out a way to maintain that successes while paring losses associated with the on-field success and also committing hundreds of millions of dollars to renovating Chelsea’s aging Stamford Bridge stadium, which with a capacity of just over 40,000 is far smaller than the arenas that play host to the Premier League’s biggest teams.Russia-Ukraine War: Key DevelopmentsCard 1 of 4Russia’s punishment of Finland. More

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      How a Russian Oligarch Is (Probably) Overvaluing Chelsea

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      A Russian Oligarch’s Very Highly Valued TeamIn announcing his sale, Abramovich said he would not ask the club to repay that debt, the equivalent of $2 billion.With loans forgiven, a quick auction will now take place. A successful buyer would be acquiring a star-laden club that will require regular cash infusions to keep up with the world’s top teams.Any new owner will also face a costly rebuilding project to upgrade the creaking Stamford Bridge stadium. In 2018, Abramovich shelved a planned $1.3 billion rebuild amid difficulties in renewing his British business visa. More