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Jan 20, 2024

The local impact on agreement from PGA Tour and LIV Golf.

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PONTE VEDRA BEACH, Fla. — It was the news that shocked the sports world; the PGA Tour and the Saudi-controlled LIV Golf are going to join forces, combine under one umbrella and drop their lawsuits against each other.

But what effect will this have on the First Coast, where the PGA Tour is headquartered?

Legendary producer Don Ohlmeyer famously said "the answer to all your questions is money," and money is definitely at the center of this deal.

It's important to note that the words "merge" and "merger" don't appear anywhere in the PGA Tour's press release, but everything about this agreement points to a serious influx of cash.

The full press release about the agreement between the PGA Tour and the Public Investment Fund can be found here.

"Together we can have a far greater impact on this game than working apart," said PGA Tour Commissioner Jay Monahan on CNBC earlier this week.

A few weeks ago it would seem unthinkable for Monahan to even be in the same room with anyone related to LIV Golf, but on Tuesday he appeared in a sit-down interview on CNBC with Yasir al-Rumayyan, who is the Governor of the Saudi-led Public Investment Fund, an organization that may soon control commercial business rights, like TV contracts, of the PGA Tour.

The PGA Tour is a 501(c)6 tax-exempt organization, so why would the PGA Tour give up control of a major source of revenue like lucrative broadcast rights? "In our model we were handicapped as a passthrough organization," said Monahan on CNBC, "after this for-profit investment we can address some opportunities in marketplace."

UNF Sports Management professor Dr. Kristi Sweeney said the impact of the PGA Tour on the First Coast is huge and goes beyond being the home of golf.

"Headquarters produce a number of well paying jobs and in addition to those well paying jobs there's a spin off of additional jobs," said Dr. Sweeney. "In terms of economic impact you would almost call that multiplier jobs, which is good for the city's economy as well. I think the PGA Tour probably attracts talent that, if they were to leave, would be seen as strategic or entrepreneurial, which is good for the overall landscape of the Northeast Florida region."

So what will the investment from the Saudis look like?

"Whatever it takes, that's the commitment," said al-Rumayyan during the CNBC interview.

Four-time major champion Rory McIlroy was one of the most prominent critics of LIV Golf. McIlroy spoke to the media before a golf tournament shortly after the announcement of the agreement between the PGA Tour and LIV Golf and said he's resigned to the fact that Saudi money will be infused into the PGA Tour.

"If you're thinking about one of the biggest sovereign wealth funds in the world, would you rather have them as a partner of an enemy? At the end of the day money talks and you'd rather have them as a partner," said McIlroy.

At this time there is no indication that the agreement between the PGA Tour and the Saudi Public Investment Fund will impact local operations in Ponte Vedra or the charities funded by the PGA Tour.

In fact, on Friday construction continued on the PGA Tour broadcast studios building next to their headquarters.