Players have equity in the PGA Tour, but what does that mean?

PEBBLE BEACH, Calif. – The primary focus of Wednesday’s announcement that the PGA Tour had reached an agreement with Strategic Sports Group to become a minority investor in PGA Tour Enterprises wasn’t the $1.5 billion investment the private equity group led by Fenway Sports planned to make. It wasn’t how the deal opens the door for even more investment from Saudi Arabia’s Public Investment Fund.

The biggest takeaway, at least if reaction from Tour players is the gauge, was trying to understand how the investment allows players to become equity holders in the new for-profit entity created by the deal.

“By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour,” Tour commissioner Jay Monahan said in a statement.

The player equity program will give players access to over $1.5 billion in assets, with an initial grant of $900 million to over 200 Tour members. But how exactly those equity shares are doled out was the biggest question from players following the announcement. And while the regulatory process will require some time to sort out, one player director on the policy board offered a glimpse into how the system might work.

The player director, who requested anonymity because he was not authorized to speak publicly on the deal, explained that of the initial $1.5 billion invested by SSG — which could grow to $3 billion — about $750 million would be earmarked for player equity, with shares awarded based on a points system similar to what the Tour uses for its retirement program.

Players would earn points for Tour victories, qualifying for the Tour Championship and other competition-related benchmarks over a five-year window with the lion’s share of that equity going to the top 36 points earners.

The next 72 players on this list would earn reduced equity shares and, according to the player director, the plan would also include ways to award “legacy” players, like Tiger Woods and Jack Nicklaus, equity grants as well as up-and-coming players like Nick Dunlap, who turned pro last week after winning The American Express as an amateur.

The player director added that the Tour’s plan to award equity shares is still being formulated and that it remains to be seen how players who joined LIV Golf might be included in the program.

During a conference call with players prior to Wednesday’s announcement, Monahan said the Tour remains in “active dialogue” with the PIF, which owns LIV Golf.