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The tour organizations referred to the astounding development as "a landmark agreement to unify the game of golf, on a global basis."
The PGA Tour commissioner, Jay Monahan, told CNBC on Tuesday that there has been a lot of friction in the sport in recent years. "What we're discussing today is banding together to harmonize the game of golf and doing it under one roof.
"... We've recognized that together, we can have a far greater impact on this game than we can working apart."
Many PGA Tour members, LIV Golf players, and agents were unaware of the historic agreement that was negotiated between the tours and Saudi Arabia's Public Investment Fund (PIF).
The parties have signed an agreement, according to a statement from the circuits, that "combines PIF's golf-related commercial businesses and rights (including LIV Golf) with the commercial businesses and rights of the PGA Tour and DP World Tour into a new, collectively owned, for-profit entity to ensure that all stakeholders benefit from a model that delivers maximum excitement and competition among the game's best players."
The circuits ruled that the accord puts an end to all ongoing legal disputes between the parties.
According to a statement from the three circuits, they would work "cooperatively and in good faith to establish a fair and objective process for any players who desire to re-apply for membership with the PGA Tour or DP World Tour following the completion of the 2023 season."
According to PGA Tour commissioner Jay Monahan, "This transformational partnership recognizes the immeasurable strength of the PGA Tour's history, legacy, and pro-competitive model and combines it with the DP World Tour and LIV -- including the team golf concept -- to create an organization that will benefit golf's players, commercial, charitable partners, and fans."
In Toronto, the location of this week's RBC Canadian Open, Monahan set a players meeting for 4 p.m. ET on Tuesday. Although Monahan and other PGA Tour executives were there, there was no mention of a prospective merger with LIV Golf.
PIF will invest money in the new company and become a top corporate sponsor of the PGA Tour, DP World Tour, and other foreign tours, according to Monahan in a message to PGA Tour players on Tuesday. According to Monahan, PIF will invest in order to "build an even stronger and more robust commercial business, together" and is dedicated to provide "significant financial support toward causes that positively impact the game on a global basis."
According to Monahan, the PGA Tour will assess the "best way to integrate team golf into the professional game." LIV Golf's 2023 program, which begins next this month in Spain, he claimed, will be completed.
The PGA Tour was sued by the LIV Golf League and 11 of its players in federal court last year. The lawsuit claimed that the PGA Tour had used its monopoly power to stifle competition and persuade vendors, media outlets, and other businesses to avoid working with LIV Golf. LIV Golf was sponsored by PIF and was led by two-time Open Championship champion Greg Norman.
In a countersuit, the PGA Tour claimed that LIV Golf had interfered with its agreements with players.
How golfers like Brooks Koepka and Dustin Johnson, who left the PGA Tour for LIV Golf in exchange for nine-figure payments, may return after this season is still up in the air.
The readmission of PGA Tour players who have switched to the LIV Golf League, according to Monahan, is a "complicated endeavor and one that will be guided by established PGA Tour rules and regulations."
The press statement states that a board of directors would be in charge of the new entity's golf-related companies, operations, and investments. The teams will try to create a structured calendar. The new business will have PIF as the sole investor, and PIF will have the "exclusive right to further invest in the new enterprise, including a right of first refusal on any cash contributed.
According to the press release, the PGA Tour will continue to be a 501(c)(6) tax-exempt organization and maintain control over the sanctioning of events, competition management, and rules.
The PGA Tour, which is still in charge of running its competitions, has announced that Yasir Al-Rumayyan, the governor of Saudi Arabia's national wealth fund, will join its policy board. The new commercial group will include Al-Rumayyan as its chairman, Monahan as its CEO, and the PGA Tour as its principal shareholder. The PIF will make an investment in the business project.
Keith Pelley, CEO of DP World Tour, declared that "this is a historic day." "We are thrilled to have the chance to expand on our present strategic alliance agreement with the PGA Tour as well as to rekindle our connection with PIF. Together, we will be more powerful than ever and in a great position to spread the game around the world.
In order to atone for the Saudi Arabian monarchy's history of human rights crimes, the PIF invested more than $2 billion in the golf industry, according to opponents.
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