PGA Tour and Saudi Arabia Agree to Remove Non-Solicitation Clause Under Pressure from US Department of Justice
In a major development in the golf world, the PGA Tour and Saudi Arabia’s Public Investment Fund (PIF) have agreed to remove a non-solicitation clause from their framework agreement. The clause had previously prevented the two entities from recruiting and poaching each other’s players. The agreement came after pressure from the US Department of Justice’s antitrust regulators.
A PGA Tour official confirmed the removal of the non-solicitation clause to ESPN on Thursday. The Department of Justice had raised concerns about the clause during its review of the framework agreement, according to the sources.
The PGA Tour has notified its policy board about the development, which was initially reported by The New York Times. The framework agreement, signed on May 30, aims to combine the commercial assets of the PGA Tour and PIF into a new for-profit entity called NewCo. Ron Price, the PGA Tour’s chief operating officer, revealed during a subcommittee hearing on Tuesday that PIF was ready to invest over $1 billion in the venture.
Under the framework agreement, the PGA Tour will hold a voting majority on NewCo’s board, regardless of the size of PIF’s investment. PGA Tour commissioner Jay Monahan will serve as the chairman, while PIF governor Yasir Al-Rumayyan will act as the CEO.
However, the deal is still subject to approval from the PGA Tour’s policy board, which includes player directors such as Rory McIlroy and Patrick Cantlay.
While the removal of the non-solicitation clause opens up possibilities, it remains unlikely that players would switch from the PGA Tour to the LIV Golf League during the ongoing negotiations between the two entities. LIV Golf CEO and commissioner Greg Norman recently confirmed that the league’s roster is already full for the 2023 season. The future of the LIV Golf League itself, which features unique elements like shotgun starts, team competitions, and 54-hole events, remains uncertain.
If the deal between the PGA Tour and PIF is finalized, NewCo’s board will conduct a “good faith” evaluation of the LIV Golf League. Ultimately, Jay Monahan will have the final authority in deciding whether the circuit plays beyond this season.
PIF, which has already invested over $2 billion in funding the LIV Golf League’s first two seasons, managed to attract top golfers such as Phil Mickelson, Dustin Johnson, Brooks Koepka, Cameron Smith, and Bryson DeChambeau. These players were signed with multiyear contracts reportedly worth more than $100 million, solidifying the league’s presence in the industry.
The removal of the non-solicitation clause marks a significant step in the collaboration between the PGA Tour and Saudi Arabia’s PIF. As the deal progresses, it will be fascinating to see how this new for-profit entity, NewCo, and its potential impact on the golf landscape.