Commissioner Jay Monahan told PGA Tour staff during a meeting Thursday that he cannot afford to continue spending tens of millions of dollars in his legal battle against Saudi Arabia’s Public Investment Fund while continuing to increase his own portfolios to prevent players from defecting to the rival LIV Golf League, According to a report in the Wall Street Journal on Saturday.
Monahan, during a meeting at PGA Tour headquarters in Ponte Vedra Beach, Florida, reportedly told staff that the financial model was not sustainable while battling Saudi Arabia’s sovereign wealth fund, which reportedly has $620 billion in assets.
The meeting came two days after the PGA Tour’s stunning announcement that it has formed an alliance with the Public Investment Fund (PIF) and DP World to form a new for-profit entity that will dramatically change the global ecosystem of men’s professional golf.
“We can’t compete with a foreign government with unlimited money,” Monahan told employees. According to The Wall Street Journal. “It was the right time…we waited to be in the strongest possible position to strike this deal.”
According to the report, Monahan told staff that the tour had already spent $50 million in legal fees and dipped in its reserves by $100 million to help pay for increased purses in high-profile events and other bonuses for players.
“To describe that this agreement was entered into due to litigation costs and other uses of reserves is an oversimplification,” a PGA Tour spokesperson said in a statement provided to ESPN on Saturday. “With the end of a fractured landscape in the world of men’s professional golf, PGA Tour ownership has never been more valuable.
“The Public Investment Fund (PIF) has recognized this value and opportunity [return on investment] with their investment in the round. In addition, this deal will make professional golf more competitive with other sports and professional sports leagues.”
A source told ESPN on Saturday that she carries insurance that will cover some of her increased legal fees.
The spokesperson said the league likely spent “tens of millions of dollars” on attorneys while fighting the LIV Golf federal antitrust case and defending itself in an antitrust investigation by the US Department of Justice.
The new agreement ends all legal disputes between the PIF and the PGA Tour. If the federal antitrust lawsuit dragged on for years over discovery and appeal disputes, sources told ESPN, it could have cost the PGA Tour more than $100 million in legal fees.
Longtime PGA Tour member Jeff Ogilvy, winner of the 2006 US Open, told ESPN he thought that was PIF’s plan all along.
“It just feels inevitably about it, as if it’s always been this way,” Ogilvy said. “I think the LIV team has been playing chess all along, maybe. I guess it’s not really a fair fight when they have a lot of money. They can stick you on the court and leave you on the court and keep you on the court and just run out of your money, but I suppose that’s some kind of tactic” .
Four-time major champion Rory McIlroy, one of the PGA Tour’s most vocal supporters during his battle with LIV Golf, seemed resigned to the fact that the PGA Tour wouldn’t spend on PIF.
“Whether you like it or not, the PIF will continue to spend money in the game of golf,” McIlroy said. “At least the PGA Tour now controls how that money is spent. So, you know, if you were considering one of the largest sovereign wealth funds in the world, would you rather be a partner or an enemy? At the end of the day, money speaks and you would rather be your partner.” “.
After the LIV Golf League lured away more than 30 PGA Tour players — including former champions Dustin Johnson, Brooks Koepka, Phil Mickelson, Breson DeChambeau and others — with guaranteed contracts worth up to $200 million, the PGA Tour has increased its portfolios by 100. $1 million starting in 2022. The program has also doubled Player Impact Program rewards to $100 million for the top 20 golfers.
Since announcing the new alliance, Monahan has been criticized by human rights groups, including Amnesty International, and even members of his own tour for his sudden shift, given his past comments about the source of funding for LIV Golf and the Saudi monarchy. History of human rights abuses and alleged involvement in the September 11, 2001 terrorist attacks.
The Wall Street Journal reported that Monahan said during the meeting that he was asked how he would explain the new alliance to his daughters, given Saudi Arabia’s treatment of women. The report stated that Manahan mentioned the name of his daughters and stopped.
“I understand all of the human rights concerns,” Monahan said. “I’ve had them myself.”