3 things we learned about the PGA Tour merger from Jay Monahan’s memo

If you have been following the PGA Tour closely, the events of Tuesday morning did not arrive as a surprise.

By the time commissioner Jay Monahan’s memo leaked following the latest Tour Advisory Board meeting, the whispers about the state of the landmark “framework agreement” between the PGA Tour and Saudi Public Investment Fund had already seeped into the public.

Those whispers roughly told us that the situation was no longer a negotiation between two interested parties, the Tour and PIF, as it once had been. Now several bidders had entered the fold, including several of America’s biggest institutional investors, all vying for a small piece of “minority” ownership in the Tour’s new for-profit spinoff, tentatively called PGA Tour Enterprises.

Still, it was noteworthy to hear Monahan say as much in his latest letter to Tour membership on Tuesday, providing the golf world with the first definitive update on the state of the negotiations for the PGA Tour’s future.

So what did we learn from Monahan’s messaging? Here are three things.

3 things we learned about the PGA Tour merger from Jay Monahan’s memo

1. The PIF negotiations are chugging along

Monahan’s first words restated the obvious, but for those reading the tea leaves, they counted as important.

“We continue to remain focused on our negotiations toward a Definitive Agreement with the PIF and the DP World Tour as our priority,” Monahan wrote. “Progress has been deliberate given the complex nature of the potential agreement, and we will keep you apprised of the progress.”

In recent weeks, reports have swirled casting doubt on the PGA Tour’s negotiations with the PIF, pointing to issues as complex as recent updates in antitrust enforcement and as simple as misunderstandings in the initial negotiations between Monahan and PIF chair Yasir Al-Rumayyan.

Monahan’s words seem to indicate that the Tour remains invested in an agreement with the PIF even given recent developments in the landscape. While his mention of the “complex nature of the agreement” certainly leaves room for future gymnastics, it seems clear that the PIF remains a part of the Tour’s future.

2. There were ‘dozens’ of outside bidders

“As you know, the Framework Agreement with the PIF and the DP World Tour generated unsolicited — although not surprising — interest from numerous outside potential investors,” Monahan said. “The opportunity to potentially participate in the transformative growth of the PGA Tour for the first time brought forth dozens of inbound prospects, which were all initially vetted by the Tour’s investment bank, Allen and Company.”

Rumblings about the various investors interested in purchasing a slice of the PGA Tour have permeated through the golf world in recent weeks. Endeavor, which owns IMG Sports, said its bid was rejected by the Tour, while an investment group headlined by famed pro sports (and TGL) owners Tom Werner, Arthur Blank and Steve Cohen is believed to have made its own offer for a minority investment in the Tour.

Allen and Company, a high-profile mergers and acquisitions firm based in New York City, was responsible for vetting the initial bids.

3. Some bidders are still in the running

Some of that initial batch of bidders remain in the running for a stake of the PGA Tour, Monahan said, advancing to a later stage of negotiations that would seem to indicate the Tour is nearing a final decision.

Under the current conditions of the PIF framework agreement, the Tour and PIF have until Dec. 31 to either come to an agreement or extend their negotiating window. Could it be possible for a PIF investment to be considered in conjunction with one of the Tour’s outstanding bids? Maybe.

Monahan neglected to specify which outside bidders are being considered currently, but said he received, “significant, formal proposals that demonstrate the power of the PGA Tour brand, its players and our commercial opportunity.”