The PGA TOUR – PIF alliance’s ‘framework agreement’ leaks; reveals big information about the big deal

The merger of the PGA Tour, the DP World Tour, and Saudi-backed LIV Golf shook the golf world to its core. It drew harsh condemnation from golf fans and was probed by the US Justice Department and the US Senate, who invited the Tour, PIF, and LIV Golf leaders to a Senate hearing on July 11, 2023.

On Monday, June 26, however, a new update on the partnership was given. According to the Athletic, the framework of the agreement went viral on Twitter. The newly published documents revealed previously unknown aspects of the arrangement.

The following are the essential points of the PGA TOUR – PIF alliance’s ‘framework agreement:

1. With the agreement, LIV Golf's future is now in jeopardy.

2. PIF, PGA Tour, and DP World Tour will form a new organization called NewCo.

3. The new corporation will determine LIV Golf's destiny.

4. A Communications Committee will also be created

5. Jay Monahan will be the new entity's CEO, with PIF governor Yasir Al-Rumayyan serving as chairperson.

Here's a quote from the agreement that pertains to the NewCo:

"PIF will contribute their golf-related investments and assets, including LIV, to NewCo along with a cash investment, in exchange for the issuance to PIF of an equity ownership interest in NewCo at a fair value mutually agreed by the parties."

"Following the contribution of assets into NewCo, NewCo shall assume all of the liabilities and obligations of the contributed assets," it continued.

"PIF will make a cash investment in NewCo for an incremental ownership in order to fund the growth of NewCo which will include a right of first refusal on capital raised by NewCo, provided that, for the avoidance of doubt, the PGA Tour will at all times maintain a controlling voting interest in NewCo and PIF will continue to hold a non-controlling voting interest, notwithstanding any incremental investment by PIF or exercise of its right of first refusal," it further added.

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"Our goal is to uncover the facts"- US Senator on PGA TOUR – PIF alliance

US Senator Richard Blumenthal sought a PIF-PGA Tour alliance framework agreement for a hearing next month, as the arrangement authorizes Saudi Arabia's Public Investment Fund to participate in American sports.

Saudi Arabia has been criticized for sports washing since it has consistently invested a large amount of money in sports, wearing down its competitiveness. It bothers the US government and sports fans alike.

Speaking about the PIF involvement in golf, Blumenthal said:

"Our goal is to uncover the facts about what went into the PGA Tour’s deal with the Saudi Public Investment Fund and what the Saudi takeover means for the future of this cherished American institution and our national interest."

However, ahead of the senate hearing the PGA TOUR – PIF alliance’s ‘framework agreement was leaked on social media.

According to the framework agreement, the PIF will attempt to obtain OWGR points for the LIV golfers. Furthermore, the six-page agreement referred to the collaboration as a worldwide golf partnership and the unification of the game.