The new strategic alliance between the PGA Tour and the European Tour announced Friday will likely have a profound effect on the global golf landscape, not just from a business perspective but on the competitive side as well.
Though the announcement made by European Tour chief executive officer Keith Pelley was long on aspiration and short on details, the result strengthens both tours while likely dealing a critical blow to the prospects for a Premier Golf League, for which discussions had begun.
While Pelley stressed two points – that the move is an alliance and not a merger, and that the European Tour was not motivated by financial distress – the PGA Tour’s investment in the European Tour’s global media rights and subsequent commercial opportunities should benefit both organizations.
It also makes PGA Tour commissioner Jay Monahan a voting member of the European Tour’s board of directors.
While Pelley strongly defended the European Tour against reports that it faces serious financial challenges, he acknowledged the tour had been approached by the Raine Group, which is behind the Premier Golf League concept. The PGL is an attempt to launch an international team structure featuring many of the game’s biggest stars.
“Let me be perfectly clear: We did not have to enter into this agreement or any other; we chose to because it’s in the best interests of both tours, for our players, for our golf fans, and for global professional golf.” – Keith Pelley
The agreement between the two tours came together in a 72-hour period last week, Pelley said. In working closer with Monahan and other leaders as the game coped with COVID-19, Pelley said he came to the realization the tours had more to gain by working together rather than independently.
“Let me be perfectly clear: We did not have to enter into this agreement or any other; we chose to because it’s in the best interests of both tours, for our players, for our golf fans, and for global professional golf,” Pelley said in a Friday teleconference.
From a competitive standpoint, the agreement points toward the creation of a more global schedule, though Pelley said any such decisions would be made down the line. He acknowledged there could be tournaments co-sanctioned by both tours within the next few years but did not offer details.
The agreement allows for the two tours to work closer together on global scheduling, prize money and providing playing opportunities though Pelley suggested those topics will be dealt with in the future.
It appears to seriously damage the chances of a Premier Golf League gaining a foothold in the global game.
“Raine Capital presented a very compelling offer to take the European Tour to another level but in a different direction,” Pelley said. “Ultimately, we felt partnering with the PGA Tour was the best option for our members and for global golf, a decision that was made unanimously by the board of directors.”
In gaining a minority investment in European Tour Productions, which produces and distributes content internationally, the PGA Tour (which recently signed a nine-year media rights deal of its own) will expand its footprint.
“We are thrilled to announce this further strengthening of our partnership with the European Tour and we look forward to working together for the benefit of the men’s professional game and for golf fans around the world,” Monahan said in a statement.
When asked why this should not be seen as a merger between the two Tours, Pelley said the European Tour did not need to merge with the PGA Tour nor was it presented to the membership as a pathway to a merger …
The notion of a more global schedule has been floated for years and this alliance could be a step toward that in some form. Among the strengths of the European Tour are its Middle East swing early in the year, the potential of having the Irish, Scottish and Open Championship played in successive weeks in mid-summer, the lucrative Rolex Series and the Race to Dubai late in the year, including the BMW Championship at Wentworth.
“Both tours are using the word collaboration, which is great. We are committed to working together. The wording in the deal that we have come to with the PGA Tour is all about working together; coming up with a schedule globally that works for both parties,” Pelley said.
When asked why this should not be seen as a merger between the two Tours, Pelley said the European Tour did not need to merge with the PGA Tour nor was it presented to the membership as a pathway to a merger, which would require 75 percent of the membership to vote in favor of such an agreement.
“I read one tweet that said a takeover is inevitable because of the situation that we are in. I find that staggering, somewhat tiring, and it is a great example of a story that perpetuates itself with no facts. And I’m not really sure where exactly that it’s come from other than a couple of naysayers out there that seem to have personal agendas that are talking about our financials that are just not true,” Pelley said
“If this was a financial situation, we would have done far more than a strategic alliance with a minority investment. I can tell you, we are categorically not in financial difficulties. That is simply wrong. We are in robust financial health with a very strong balance sheet, strongest ever, and a strong support of networks of partners …
“This is day one of a partnership, and we really want to build this partnership and really want to grow this relationship. But categorically not, this is not a merger.”
Top: PGA Tour commissioner Jay Monahan (left) and European Tour chief executive officer Keith Pelley (right), pictured with former Asian Tour chief executive Josh Burack and Sunshine Tour executive director Selwyn Nathan. Photo: David Cannon, Getty Images
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