January 31, 2024
You couldn’t see their faces, but you could hear their voices, and that said it all. Tiger Woods, Jay Monahan, John Henry… This conference call was a big deal. And it was about a big deal. The people who have carved out a stable financial future of the PGA Tour were now sharing their work with the Tour membership for the first time. And the call began with an important voice: that of Woods, speaking to fellow board member Peter Malnati.
“Hey Pete. Exciting day, huh, big guy?”
It was, indeed, an exciting day for those involved. The call represented the culmination of countless hours on meetings diving into the product that is the PGA Tour, from the way it is presented on television to the courses it owns and operates to the way it compensates its players. Finally, after months of reports and rumors, an investment from the Strategic Sports Group (SSG) was finalized.
Monahan gave opening remarks, communicating that a “landmark agreement” had been struck within the last 12 hours, implying the deal had been finalized late Tuesday night. The initial SSG investment is for $1.5 billion — on a valuation of $12.3 billion — and could grow to as much as $3 billion. More than two dozen entities submitted investment bids — unsolicited, Monahan was keen to note — totaling $20 billion, reiterating the fact that there are many wealthy people interested in owning a piece of pro golf.
“Close to 200 members” of the PGA Tour will become equity holders in PGA Tour Enterprises, a new, for-profit company, earning their initial bit from a total share value of $930 million. The size of each player’s ownership will be based on, as Monahan said, “career accomplishments, recent achievements and Tour status, with grants vesting over time.” An additional $600 million will be doled out to players in recurring equity grants beginning in 2025. On top of all that, player compensation (in the form of tournament purses) will be guaranteed for five years as a result of the SSG investment. Overseeing the company will be a 13-person board, with seven Tour pros ensuring player-majority control.
Monahan spoke for 10 minutes before ceding the floor to the people investing billions into his enterprise: John Henry, Sam Kennedy and Andy Cohen. After their pleasantries, Woods was up next.
“Hey everyone, this is Tiger Woods,” he began.
“Just wanted to say thank you, SSG, for believing in us and believing in our sport. Believing in the potential growth that we could enjoy together. Golf is an amazing sport. It has allowed communities to heal and grow. And we, as a team, are going to offer that according to what we believe is the true compensation and meritocracy that our sport has been built upon for all these years.
“As has been described earlier, as the Tour grows, we grow. So the more we invest into the Tour, the more we get the benefits of it. Which has never been — it’s never happened in sports history. So we’re the first. Exciting for me to be able to be part of that.”
The Tour is not the first sports league to dish out player equity, but it is undoubtedly the first to do it at this scope and in this way. As smaller sports leagues have shown, player equity is as important as it has ever been to establish full buy-in from its constituents. Woods will no doubt earn the greatest number of shares, for the unmatched value his playing days offered to the PGA Tour’s bottom line, a point that was underlined by the next person who spoke on the call.
“I actually think it’s kind of fitting,” added Peter Malnati, another player director, “that you just heard from probably the greatest player to ever play on the PGA Tour — definitely the greatest of our generation — share his enthusiasm and his excitement for this deal. And now I’m going to tell you that, as a guy who has been on Tour for 10 years and has never finished better than 86th in the FedEx Cup, this deal is equally exciting for me as it is for Tiger.”
What exactly the deal means for a player like Malnati versus Woods remains to be seen. Each Tour member will be treated differently as PGA Tour Enterprises gets established, and they’ll learn as much in forthcoming webinars and one-on-one consultation. Further investment may arrive from the Saudi PIF, which has been rumored to be just as valuable. Monahan noted those negotiations are ongoing and are not impacted by the SSG deal. But for now, as was noted repeatedly on the call, the Tour has established an influx of capital that will align its stakeholders to row in the same direction. Malnati described the last few weeks as “being in the trenches” of negotiations, but he believes the Tour has now taken the first step towards normalcy.
“I have seen and felt and been a part of the frustration, the distrust, the chasm in our organization,” Malnati said. “And I can sit here today and tell you honestly that today is a day to celebrate. Today is a day of incredible optimism. I’m exhausted from this process, but I am so energized by what is to come.
“This partnership with SSG is going to be good for the greatest player of all-time to help cement the tour that he cares so much about, and the players that he had mentored and shaped and all that. It’s going to be great for the Peter Malnatis of the Tour who have absolutely worked their tails off just to realize his childhood dream of playing golf on the PGA Tour and being here. Our Tour, we are all going to take an ownership stake in our Tour that is going to help align the interests of the players, our management team, our investors. And by doing that, we’re going to make our sport better, which is going to reward our fans, it’s going to increase the interest in our game.”