With the initial shock of the PGA Tour merging with the DP World Tour and Saudi Arabia's Public Investment Fund finally starting to wane, a litany of yellow lights are being flashed from folks who cover antitrust litigation questioning whether the merger will happen at all. An even bigger question: Given the complicated structure of the new organization that would effectively run non-major championship golf at its highest level, who exactly is going to be in charge?
PGA Tour commissioner Jay Monahan will serve as CEO of the new for-profit entity that will sit on top of the triumvirate of the PGA Tour, DP World Tour and LIV Golf. However, PIF governor Yasir Al-Rumayyan will be chairman of a board that will include an executive committee of himself, Monahan, Jimmy Dunne and Ed Herlihy. The latter two are the PGA Tour executives who, according to Monahan, brokered the entire deal. The rest of the board will be filled out at a later date.
There are currently two ways to consider how power will be consolidated in the new entity.
The PIF will serve as the sole outside investor into this new entity. It also possesses first right of refusal for all future potential investments. So, just follow the money. Even though the PGA Tour will have a majority of board members and majority voting rights on this yet-to-be-formed board, whoever provides the money makes the decisions, right? Again, that's not necessarily how it's going to go, but it's a strong consideration.
Al-Rumayyan is a fascinating figure who has his hands in innumerable businesses and sports entities worldwide, including serving as chairman of Newcastle United FC. This excellent profile of him depicts a man who probably has too much going on to truly be deeply involved in anything beyond the biggest decisions of this new company.
However, it's the biggest decisions that matter most, and Al-Rumayyan is clearly obsessed with golf. Even though he is not involved with the nitty gritty details of Newcastle, here's how one source in that article noted his involvement: "He who pays the piper calls the tune."
That is more or less how the LIV Golf camp is painting the future.
However, the Saudis have long sought influence, not management. The goal of the PIF has been to gain the Saudis a foothold in major professional sports, especially those with international reach. They don't want to actually run the show. This is perhaps naive, but it also might be true. Again, Al-Rumayyan is a busy man. He serves as chairman of the Saudi state-owned oil company, Aramco, and is on the board of other companies such as Uber. He is one of crown prince Mohammed Bin Salman's most trusted advisors. This is not a man who has the capacity to grind on tee times or even corporate sponsors.
Again, the PGA Tour is retaining the majority of the board, and one of the four people who worked on this deal, Dunne, was adamant about the Tour retaining power in an interview with Golf Channel on Thursday.
"We are going to establish a [new company] that is in the very preliminary stages, but we're going to be looking for opportunities," said Dunne. "In those opportunities, the Tour will always maintain control, 100%, regardless of what is in there. Now, they, the PIF for example, has ... done quite well by being a minority investor in a lot of fantastic companies that have done a lot of good and have thrown up tremendous financial benefits. So they understand, and they have no problem, assuming they're OK with the manager running it, to make minority investments.
"As much as I like the people I dealt with, the game of golf is too important. The legacy of the PGA Tour is too important. The people that we have in place have too much experience that we have no desire, no need. There is no way on God's green Earth that we're going to give up control. I don't know how else to say that."
Dunne stressed that he felt his side could have walked at any point during the negotiation, saying he feels good about where it all landed. It's impossible to predict how this will all shake out, but the idea that Dunne and Herlihy are better suited to make this deal than Monahan is not outrageous. Herlihy is a partner at one of the preeminent law firms in the world, and Dunne has been a prominent investment banker for decades.
"I mean, I have done a few deals," said Dunne. "I understand something about control. Ed Herlihy, who is the managing partner at Wachtell Lipton, I think he understands something about control."
Even if Al-Rumayyan decides to put his thumb on the scale more often than anticipated, that might not be the worst thing in the world for the business.
"I think he really does like the game of golf," said Rory McIlroy on Thursday. "He likes playing it. He's a very impressive man. Harvard Business School. Runs [$700 billion to $800 billion] worth of dollars and invested in a ton of different companies. He's a very smart, impressive man."
It's still unclear if anyone involved has thought about the fans or those who support professional golf. So, while it may be a positive for players that everyone involved at the top wants to make a lot of money (and in the PIF's case, may need to make a lot of money), whether this is actually beneficial for the game and its future remains to be seen.
What is even more unclear is how Al-Rumayyan's boss, MBS, will be involved. His reputation precedes him, and though Al-Rumayyan is often considered the kingpin in all of this, he is -- like plenty other MBS allies -- extremely expendable.
"He works for a guy," said one source in that Athletic article. "He has a lot of money and can do certain things he wants. But he's a courtier."
There is so much more to be worked out. The relational details of the new company, how the PGA Tour, LIV Golf and the DP World Tour will all interact, how much money the PIF will be investing in the new business, who fills out the seats on the new board, whether the Tour can keep its 503(c)(6) status, whether the deal will pass the antitrust test. Not to mention questions such as: Will the PIF require multiple Tour events be played in Saudi Arabia? Who gets to decide whether that happens? How will LIV be folded into the entire entity? Who will make the decision about team events and whether those teams should be sponsored?
What has started to take shape as more information emerges is that nobody has answers for any of these questions. What that likely means is that everything is still taking shape behind the scenes.
This relationship looks great on paper, but tussles for control at the company building level do not take place on paper. With so much up in the air and so many powerful people in the room, there are 1,000 ways this could go. The headlines may have looked tidy this week as three mighty entities enmesh, but the finished product is forever away, and the struggle for its formation has only just begun.
