Jay Monahan to employees: PGA Tour can’t compete financially with Saudis, PIF
Last year, PGA Tour commissioner Jay Monahan said of the Tour’s battle with the Saudi-backed LIV Golf: “If this is an arms race, and if the only weapons here are dollar bills, the PGA Tour can’t compete.”
Now, after last week’s news that the PGA Tour, DP World Tour and Saudi Arabia’s Public Investment Fund are combining commercial assets, a move that ends all litigation on both sides, it’s fair to wonder if the Tour was running low on ammunition.
According to a recent Wall Street Journal report, that’s exactly what was happening, as Monahan explained to Tour employees in a company-wide meeting last Thursday that the Tour could not financially sustain a lengthy fight with the Saudis.
“We cannot compete with a foreign government with unlimited money,” Monahan is reported to have told employees, adding that the Tour had already spent nearly $50 million in its legal battle with LIV and tapped into $100 million of its reserves to boost purses (an increase of $100 million at its designated events) and bonus pools (the Player Impact Program doubled to $100 million) to compete with LIV’s extraordinary signing bonuses and prize money.
A source who attended the meeting confirmed such details to GolfChannel.com, adding that Monahan said the DP World Tour had spent around $15 million in legal fees.
Monahan, per that source, added during the half-hour-plus meeting that the PIF “had and still have unlimited resources to take our players and work to stand up in a matter of months what had taken our organizations decades to build.” And of the legal spending, Monahan said those resources were “diverted from growing our business and serving our players.”
But money talk didn’t dominate the agenda, as Monahan also spoke to strengthening the Tour and the game of golf, as well as benefits to having the Saudis as partners rather than competitors.
The WSJ also reported that Monahan was pressed during the meeting how he’d explain this deal to his daughters given the Saudis’ treatment of women, Monahan named his daughters, took a long pause and then explained that the circumstances forced him to “think about all of our players … think about everybody in this room.”
“I understand all the human rights concerns,” Monahan is said to have added. “I’ve had them myself.”
The PGA Tour has since responded to the WSJ report, saying via statement: “To characterize that this agreement was made due to litigation costs and other use of reserves is an oversimplification. With the end of the fractured landscape in the world of men’s professional golf, the PGA Tour has never been a more valuable property. … This transaction will make professional golf more competitive with other professional sports and sports leagues.”
Monahan, who was revealed as part of available tax filings to have earned $13.9 million in 2021, said last week, “I felt very good about the changes we’ve made and the position we were in.” But he also spoke publicly about “significant” financial moves.
“Between our reserves, the legal fees, our underpin (reportedly $50 million and expected to increase in the coming years) and our commitment to the DP World Tour and their legal fees, it’s been significant,” he said.
Per the WSJ, Saudi Arabia’s sovereign wealth fund last year counted $606 billion in assets, $45 billion in cash and cash equivalents and $85 billion in treasury assets.
“Whether you like it or not, the PIF were going to keep spending the money in golf,” Rory McIlroy said during his pre-tournament media availability last Wednesday at the RBC Canadian Open. “At least the PGA Tour now controls how that money is spent. So, you know, if you’re thinking about one of the biggest sovereign wealth funds in the world, would you rather have them as a partner or an enemy? At the end of the day, money talks and you would rather have them as a partner.”