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PGA Tour/LIV golf deal framework revealed while Saudi investment courts tennis ventures 

PGA Tour/LIV golf deal framework revealed while Saudi investment courts tennis ventures 
Yasir al-Rumayyan, head of the sovereign wealth fund of Saudi Arabia, looks on from the 18th green during day two of the LIV Golf Invitational - DC at Trump National Golf Club, Washington DC. (Photo: Rob Carr/Getty Images)

The PGA Tour will have a permanent controlling interest in the new golfing entity that will be created after the merger between golf’s leading Tours and Saudi Arabia.

The framework of the merger agreement of the PGA Tour and Saudi-backed LIV Golf says a for-profit subsidiary of the US golfing body will be created to manage commercial investments and assets for all tours, according to a copy reviewed by Reuters on Monday.

The PGA Tour will have a permanent controlling interest in the subsidiary’s board of directors, regardless of the Saudi investment, the framework says.

The PGA Tour, DP World Tour and rival Saudi-backed LIV circuit, which had been involved in a bitter fight that split the sport, earlier in June announced an agreement to merge and form one unified commercial entity.

The framework agreement also ends litigation between the two sides.

The LIV Golf series is bankrolled by the Saudi Arabia Public Investment Fund (PIF) and critics have accused it of being a vehicle for the country to improve its reputation as it faces criticism of its human rights record.

PIF Governor Yasir Al-Rumayyan will be the chairman of the new entity, called NewCo in the framework, while PGA Tour Commissioner Jay Monahan will be the CEO.

The framework is likely to be a focus of a US Senate panel on 11 July where Monahan, Al-Rumayyan and LIV Golf CEO Greg Norman have been invited to testify.

Read more in Daily Maverick: US Senate panel urges PGA Tour commissioner, LIV CEO to testify on controversial merger

The proposed deal has faced intense criticism in Washington.

US Senator Richard Blumenthal has asked the PGA and LIV for communications and records on their planned merger, citing concerns about the Saudi government’s role in the deal and risks posed by a foreign government entity assuming control over the sport.

Blumenthal, a Democrat who chairs the Senate Permanent Subcommittee on Investigations, demanded to know how the non-profit group came to its agreement with LIV Golf, a professional body.

He also wanted to know how any newly formed entity will be structured and operated, including how the PGA Tour intends to preserve its tax-exempt status.

Saudi investment in tennis?

CEO of Tennis Australia and Director of the Australian Open Craig Tiley believes any Saudi investment in tennis is unlikely to have the same impact as the country’s disruptive entry into golf because talks are focused on bolstering the current structures of the game.

Association of Tennis Professionals (ATP) Chairman Andrea Gaudenzi told the Financial Times last week that he had held “positive” discussions with the PIF and other potential investors.

“What’s different to what we’re seeing (in other sports) is this is an investment in the current structure of the game and not an investment in an alternative option,” Tiley told reporters on Tuesday.

Craig Tiley, Tennis Australia CEO

Craig Tiley, Tennis Australia CEO, doesn’t believe tennis will face the same issues as golf has, if the sell a stake to Saudi Arabia. (Photo: Darrian Traynor/Getty Images for Tennis Australia)

“But like everything in the world, there’s lots of changes always going on. So you’ve got to watch what’s going on and stay close to it.

“But, ultimately, that’s a decision for the men’s and the women’s tour.”

Saudi Arabia has pumped huge amounts of money into sport in recent years and media reports say it is bidding to host this year’s ATP Next Gen Finals, which feature the tour’s top Under-21 players.

Some of the world’s top players have already featured in the Diriyah Cup exhibition event on the outskirts of Riyadh and world No 1 Carlos Alcaraz said earlier this week he had “no doubts” he would compete in Saudi Arabia at some point.

Australia’s Nick Kyrgios welcomed the news of the ATP’s discussions on investment from Saudi Arabia and said it would bring players the financial rewards they deserved.

“Finally. They see the value,” he tweeted above a report of the talks between the Saudis and ATP.

“We are going to get paid what we deserve to get paid. Sign me up.” Reuters/DM

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