PGA Tour, LIV Golf agree to merge

In a stunning twist to the saga that has consumed golf for the past year, the PGA Tour, the DP World Tour and LIV Golf, the upstart breakaway tour funded by Saudi Arabia's Public Investment Fund, have agreed to merge and create a new entity to unify the tours.

The details are still sparse and incomplete, but the fact that the PGA Tour and LIV Golf have agreed to create a new entity after more than a year of acrimony and litigation is significant. The deal was negotiated in such a secretive fashion that not even the PGA Tour's players knew. LIV Golf CEO Greg Norman apparently found out in a phone call just before the announcement was made public.

"After two years of disruption and distraction, this is a historic day for the game we all know and love," PGA Tour commissioner Jay Monahan said in a statement. "This transformational partnership recognizes the immeasurable strength of the PGA Tour history, legacy and pro-competitive model and combines with it the DP World Tour and LIV — including the team golf concept — to create an organization that will benefit golf's players, commercial and charitable partners and fans."

The agreement brings to a close the litigation between the PGA Tour and LIV. Additionally, the organizations will work together to provide a pathway for LIV players to reapply for PGA Tour membership, or apply for reinstatement, following the 2023 season.

The new, as-yet-unnamed entity will have a board of directors to oversee, in the tour's words, "golf-related commercial operations, businesses and investments."

The sole and exclusive financial investor in the new entity will be Saudi Arabia's Public Investment Fund, which had underwritten the LIV Tour, alongside the existing PGA Tour, LIV Golf and the DP World Tour (formerly known as the European Tour). Saudi Arabia's Public Investment Fund also retains the right of first refusal for any additional investment in the new entity. That, in effect, gives Saudi Arabia's PIF enormous power in dictating the scope, goals and direction of the new entity.

The PGA Tour will appoint a majority of the new entity's board of directors, and will hold a majority voting interest, according to the tour's statement. The tour will continue to retain its status as a 501(c)(6) tax-exempt organization, and will retain so-called "inside-the-ropes responsibilities" of its events. The DP World Tour and LIV Golf will retain oversight on their respective tour events.

The tours will continue to operate as previously scheduled in 2023, with the LIV Golf tour kicking back up later this month in Spain. Going forward, it's unclear how LIV golfers will apply to rejoin the PGA Tour, but that is something Monahan said will be worked out.

LIV Golf emerged as a competitive threat to the PGA Tour when it first teed off in March, 2022. It lured some big names, including Phil Mickelson, Dustin Johnson, Brooks Koepka and Bryson DeChambeau, with massive paydays that reportedly reached nine figures for some.

The acrimony between the tours intensified as the two began filing lawsuits and counter lawsuits against one another. On the PGA Tour side, Rory McIlroy emerged as the voice for the players, at certain points criticizing those who took money from the Saudi-backed league.

Quickly, though, the PGA Tour realized that it had to respond to the threat LIV posed, not just in the courtroom but on the golf course. The tour implemented "elevated" events to force top players to play more often. The tour also increased purse payouts and ramped up its Player Impact Program, a fund paid out every year to the top players. It also implemented a minimum salary for full-time tour players.

In a joint interview Tuesday morning on CNBC, Monahan and PIF director Yasir Al-Rumayyan acknowledged that many of the details of the merger are still to be worked out, but the two are committed to finalizing the deal within a few weeks.