Saudi-backed LIV Golf merges with US rival PGA Tour

Saudi-funded LIV Golf and the PGA Tour announced a merger on Tuesday, seemingly ending the fierce rivalry between the two and spelling major ramifications for golf and the kingdom’s sports strategy.

The PGA Tour said it signed an agreement with the Saudi Public Investment Fund and the Dubai-based DP World Tour to combine their golf-related businesses and rights including the fund’s LIV Golf into a “new, collectively owned, for-profit entity.” The deal will “unify the game of golf," according to the statement.

What exactly the new entity will look like remains to be seen, but the PGA has offered some details. The Public Investment Fund “will have the exclusive right to further invest in the new entity” and the entity will have a board of directors. A majority of the board will be appointed by the PGA, which will “hold a majority voting interest.” The new entity will also further develop the team golf concept, according to the PGA.

The agreement will also be followed by a deal to end all pending litigation between the entities, and the three will determine a process by which golfers can reapply to join the PGA Tour. Further details will be announced at a later time.

Background: LIV Golf is majority owned by the Saudi Public Investment Fund. It began its first season last year and is currently in its second season. It aimed to be a rival of the US-based PGA Tour, which is the dominant golf competition in the world. The DP World Tour is another golf competition that is based in Dubai.

LIV has been a polarizing factor in world golf, largely due to Saudi Arabia’s human rights record. The league won over many fans and golfers for its efforts to make watching golf more exciting and offering relatively more guaranteed money. Changes LIV introduced to the game include shotgun starts, whereby golfers tee off at the same time on different holes, and team golf. 

The PGA Tour suspended LIV Golf athletes last year for joining the breakaway league, prompting the LIV golfers to sue and the PGA Tour to file a countersuit.

Why it matters: The merger is remarkable because of the amount of bad blood between LIV Golf and the PGA. Many on the PGA Tour, including Irish golf superstar Rory McIlroy, have criticized LIV Golf repeatedly. Last year, McIlroy said the golfers who moved to LIV were "tarnishing a reputation for extra millions.”

LIV Golf CEO and retired Aussie golfer Greg Norman has also criticized the PGA. Last year, he accused the tour of “hypocrisy” due to some of its sponsors doing business in Saudi Arabia, for example.

LIV was having mixed success ahead of the merger. The league reportedly had low TV ratings this year after signing a broadcast deal with the US network CW. However, LIV’s golfers have been playing very well at the major golf tournaments this year, as evident by Brooks Koepka winning the PGA Championship in May.

For global golf, the ramifications are huge. The top men's players in the world will presumably play in the same competition again.

The agreement could also benefit the Public Investment Fund by ending its legal battle with the PGA and providing a new major golf entity for it to invest in. LIV suffered a legal setback in February when a US judge ruled that Public Investment Fund governor Yassir Al-Rumayyan had to sit for depositions and produce documents for LIV’s suit against the PGA, The Associated Press reported at the time.

Chase Howell, who writes for The Action Network, said the merger followed LIV becoming more accepted in the golf world.

“I think the majority of the players have been asking for something like this for a few months now. You could also feel LIV becoming more accepted across the golf landscape, especially after Brooks won the PGA Championship,” Howell, who is also a caddie on the Korn Ferry golf tour, told Al-Monitor. “It will be interesting to see how they decide to combine the two models and whether a lot of the ‘progressive’ ideas from LIV will remain.”

“Pro golf has officially changed forever.”

Some of LIV Golf's biggest names celebrated the news on social media. Phil Mickelson tweeted, "Awesome day today" in response to the merger.

Rumayyan and PGA Tour Commissioner Jay Monahan appeared on CNBC together following the merger news. Rumayyan said the two met in London for talks on the merger and confirmed that the fund will invest billions of dollars in the new entity during the interview.

“We would love to make the game of golf very much accessible just like any other sport. And that’s what we don’t have today,” said Rumayyan.

Families of the victims and survivors of the September 11 attacks have been among the most vocal critics of LIV Golf due to alleged Saudi government involvement in the tragedy. The head of 9/11 Justice, which advocates for releasing evidence related to the attacks, said that they feel "betrayed" by the PGA Tour. "This one hit particularly hard because we thought we had an American institution with the courage and integrity to stand up to the kingdom," Brett Eagleson told Al-Monitor. "We just feel we've been betrayed."

Know more: Saudi Arabia is aggressively seeking to become a force in world sports as it seeks to diversify its economy and reduce oil dependence. On Monday, French soccer star Karim Benzema agreed to play for the Saudi club Al-Ittihad, just as the Public Investment Fund launched a privatization project for sports clubs in the kingdom.

This is a developing story and will be updated.