Report: Mounting Legal Bills, Higher Purses Would’ve Put PGA Tour in Financial Jeopardy

One of the most-asked questions asked aloud by golfers and reporters since last Tuesday’s announcement of the new partnership among the PGA Tour, DP World Tour, and Saudi Arabia’s Public Investment Fund (PIF)—the financial backers of LIV Golf—revolves around why the PGA Tour would make this deal when it appeared that LIV was not going to be a large threat to the circuit.

After all, LIV did not attract any new big-name golfers prior to the 2023 season, its television deal with the CW Network was not bringing in big numbers, and lawyers for the new league admitted in court that revenue during the first season was “virtually zero.”

But a detailed report into the negotiations published over the weekend by the New York Times showed that the money being spent by the PGA Tour to fend off its opponent was eventually going to be a problem.

More details are coming out about the PGA TOUR – LIV Golf deal:

• The PGA Tour spent $100 million of its reserves on legal fees ($50M) and purses for elevated events.

• The PGA Tour believed its legal battle with LIV Golf could continue for at least 3-4 more years.

• Jimmy… pic.twitter.com/hwRdD0AzCW

— Joe Pompliano (@JoePompliano) June 11, 2023

The PGA Tour’s legal fees were over $40 million last year and were expected to rise until 2026. In addition, the extra money added to purses for the new designated events caused the tour to dip into its financial reserves. With TV contracts in place until 2029, no major increase in revenue was expected.

Last June, PGA Tour commissioner Jay Monahan foretold this issue by saying, “If this is an arms race and if the only weapons here are dollar bills, the PGA Tour can’t compete.”

PGA Tour Commissioner Jay Monahan on the Saudi-backed LIV Golf tour:

“If this is an arms race, and if the only weapons here are dollar bills, the PGA Tour … can’t compete with a foreign monarchy that is spending billions of dollars in an attempt to buy the game of golf.” pic.twitter.com/ui6Z6rX41u

— The Recount (@therecount) June 22, 2022

Insiders also believe that the PGA Tour wasn’t exactly thrilled about what discovery would turn up, leading to a court battle with the PIF over antitrust issues.

The new deal has legal hurdles to clear, so a final agreement isn’t likely for many months.

Cover Image Via Twitter