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Guy Monahan told his staff that the PGA Tour couldn’t win for Saudi Arabia’s “unlimited money.”
So the tour and its commissioner came to the table, and Wall Street Journal He reports.
Monahan’s admission came Thursday, two days after the proposed surprise deal between the tour, DP World’s tour and Saudi Arabia’s Public Investment Fund. This deal will create a new for-profit venture to be run by the trio and end pending litigation between the parties.
But why now? In a speech delivered Thursday at PGA Tour headquarters, according to Wall Street JournalMonahan said the tour couldn’t afford to spend for Saudi-backed LIV Golf — the tour spent about $50 million in various legal battles with LIV, and used $100 million of its reserves to pay its schedule.
“We can’t compete with a foreign government with unlimited money,” Monahan said. Wall Street Journal. “It was the right time. … We waited to be in the strongest possible position to get this deal done.”
According to the Wall Street JournalManahan was also asked how he would explain to his daughters why he would work with Saudi Arabia, given the treatment of women – which, he said, “the conditions we were in” meant he had to “think of all our players… I have to think of every single person in this room.”
“I understand all the human rights concerns,” he added. “I’ve had them myself.”
At a minimum, the deal between the tour and the DP World and PIV tour came as a shock. Since LIV began play a year ago, the series has attracted many pros with guaranteed deals and big money, the tour has responded with a revamped schedule and bolstered portfolios, and lawsuits have been filed by each side. After that, the fight ended. On Tuesday, the proposed deal was announced, and Monahan and Yasser Al-Rumayyan, the governor of the Public Investment Fund, sat side by side on CNBC.
Hours later, Monahan met the players at the Canadian Open, this week’s Tour event, and then held a virtual press conference with reporters. There, he was asked this: “When Roger Clemens moved from the Red Sox to the Yankees, it was a business thing, but that thing, as you probably know better than anyone else, had a lot of feelings going up because it was the Saudi money, and you speak for yourself, I took the moral high ground: You never have to apologize for being on the PGA Tour. Something really important changed here. Was it just business, or was there more to it than that?”
His answer was vague.
“Listen, I think as time has gone on, and you’ve heard me say a few times, circumstances have changed,” Monahan said. “What has changed? I looked at where we were at at the time, and it was a good time to have a conversation.
“Going back to the origin of LIV, I said this: They needed to have their way and we’ll go our way. We did everything we could to improve and grow the PGA Tour, they launched LIV; they initiated LIV; they made progress with LIV. But in the end it was looking The broader picture and he says I don’t think it’s right or sustainable to have this tension in our sport, to be able to orchestrate and direct this in a way that, again, we’re in control, we’ve got an investor, a great, world-class investor, and I realize everything you’ve said in past and in my previous positions.
“I realize people are going to call me a hypocrite. Anytime I said anything, I said it with the information I had at that moment, and I said it based on someone trying to compete on the PGA Tour and our players.
I accept those criticisms. But circumstances change. I think looking at the big picture and looking at it that way is what got us to this point.”
Another reporter later asked Monahan: “How would you describe the immediate financial future of the tour if this deal didn’t happen, both in terms of dealing with the high portfolios, and dealing with the ongoing litigation cost, perhaps annually? How sustainable would that have been in the next few years without this?” Money flow?
His answer was indefinite.
“Well, listen, to make the changes in ’23 and ultimately to make the changes in ’24, we had to reinvest in our business through our reserves,” Monahan said. “But you hit it; between our reserves and legal fees and our pillars and commitment to the DP World tour and its legal fees, it mattered.
“I am grateful that as we look back into ’24 the response we’ve had from our sponsors and partners has been very positive, and those losses we suffered in ’23 will be greatly mitigated.
“But you have to look at all the money we’re making, we’re making in the commercial space, and we’re in long-term media deals. We’ve done a long-term business — we’ve done a number of long-term sponsorship deals thanks to the incredible partners we have.
“But it puts us in a position where we have capital that we can put to work for the benefit of our members and through our tournaments, and it gives us capital to deploy in growth businesses that will ultimately generate a return that we will reinvest in our players.
“Hopefully this answers your question.”