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Amid Persistent PGA Tour Sponsorship Troubles, Will the $3B PIF Framework Agreement Provide Succor for Jay Monahan?

Published 12/13/2023, 11:15 AM EST

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Last week, two long-time partners let go of Jay Monahan’s hand. One was the mild-mannered blue-eyed boy who excelled at the art of diplomacy more than any other, and the other was a $167 billion partner that spent more than double the money it did last year without any significant return. The first departure, that of Jon Rahm, caught everyone off guard for obvious reasons. Naturally, the more significant headline-worthy news overshadowed the second one. However, Wells Fargo’s exit from the PGA Tour will have a more lasting impact on the Tour’s future than the Spaniard’s defection to the Saudi-backed side.

The second departure was significant because it came at a time when the PGA Tour sought a future ally in PIF, the Saudi sovereign fund that snatched Rahm away. Ironically, that very dubious act of forging a peace treaty in the penthouse while storing ammunition in the basement is also the reason why Jay Monahan is forced to stretch his sponsors thin. Some called the Saudi maneuver treachery. Others, more familiar with billion-dollar negotiations, dubbed it leverage-building. The two momentous decisions leave a slew of questions in their wake. Is this a sustainable war? What does Wells Fargo’s exit indicate, and most importantly, is shaking hands with Yasir Al-Rumayyan the last and only option for Jay Monahan?

Why Wells Fargo’s departure will sting

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Wells Fargo announced their partnership with the PGA Tour will end in 2024. The $167 billion group’s partnership dates back to 2003, when the Charlotte event was popular as the Wachovia Championship. Since 2011, it has been renamed the Wells Fargo Championship. Both parties agreed to a five-year extension in 2019, two years after Jay Monahan became the commissioner.

However, that was before PIF stepped into golf. As a result, Wells Fargo had to hike the purse size by more than double in three years on PGAT’s demand. Considered a designated event, this year, the Wells Fargo Championship had a purse size of $20 million, one of the highest in the tour—a hike of $11 million in one year. Twelve years ago, when Wells Fargo first became the title sponsor, Lucas Glover earned a check of $1.17 million.This year, Wyndham Clark raked in $3.6 million, a little more than what Rahm bagged for winning the Masters.

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Wells Fargo reportedly wanted to remain a partner beyond 2024. However, unreasonable demands from the tour compelled them to cut the 22-year-old tie. PIF’s money flexing has forced Jay Monahan to increase the purse size for the tour events as well. But it’s the sponsors who have been caught in the crossfire.

PGA Tour is walking on a tightrope

Earlier this year, Honda announced the end of its partnership with the PGA Tour. The 2023 Honda Classic was the last of their 42-year-long collaboration. An event that was once flocked by who’s who in the Tour dwindled to a meager event shoved between two ‘elevated events’.

This is just one hint of the problem with the elevated or signature events as they would be called from now on. With sponsors splurging huge amounts of bucks on the events, they want their ROI. The profit can only be measured in numbers when top players tee off at those matches, which is why the PGA Tour made participation mandatory.

But two signature events in quick succession with a purse size of $20 million automatically take the sheen away from the tournament that’s shoehorned in between. This year it was the Honda Classic; next year it will be the WM Phoenix Open, which falls between the AT & T Pebble Beach Pro-Am and the Genesis Invitational. Moreover, June will be a month of grind for PGAT players as the U.S. Open is preceded by the Memorial Tournament and followed by the Travelers Championship, two signature events with elevated purses bookending the Major.

Moreover, Jay Monahan’s increasing demands are leading sponsors astray. The new tour funding model asks for more from the tour organizers. As per some tour directors, sponsors are already stretched thin. They believe some will put their foot down if the demands keep increasing. This effectively leaves the PGAT with two options, one of which can spell disaster in the long run. 

A new party in the $3B PGA Tour-PIF merger?

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Since the June 6 announcement, the PGA Tour has received a lot of attention from investors. Most recently, it was reported that the tour had been finalized for one entity. Or rather, a collective of investors fronted by one. The Strategic Sports Group (SSG), a consortium of investors led by Fenway Sports Group, Arthur Blank, Wyc Grousbeck (Boston Celtics), Tom Ricketts (Chicago Cubs), and other investment hawks, will be a co-investor in the new entity created by the $3B Framework Agreement with PIF. 

Jay Monahan and Al-Rumayyan Will Make a Massive Verdict Next Week on the $3B PGA Tour LIV Golf Merger

As per the June 6 announcement, PIF will be a minority stakeholder in the Tour, allowing Monahan to seek out other investors. However, if the deal is finalized, Rumayyan will get a seat on the directors’ board of the newly formed entity. Whereas, if the agreement fails to reach the status of a partnership, it will mean a few more years of civil war in the golf world.

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The PGAT commissioner might have SSG by his side this time, but it’s not clear how much financial ammunition they are willing to lend to save the form of traditional golf. In the wake of Jon Rahm’s defection, PIF might seem like a fly-by-night ally, but it also shows that the Yasir Al-Rumayyan can be a formidable enemy to pick a fight with, let alone a raging war against.

Watch This Story | The Management of a 250 Years Old Club Took a Bold Step Revealing the Unprecedented Hefty Prize Purse Compared to Previous Year’s $14M for Which Several PGA Pros Ditched the John Deere Classic

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Written by:

Parnab Bhattacharya

803Articles

One take at a time

I, Parnab Bhattacharya, am a budding golf writer at EssentiallySports. I am keen on constantly exploring my deep-rooted love for golf through my long-time passion for writing. With a strong knack for storytelling and experience in SEO content writing, I bring a unique blend of fluent writing and technical expertise.
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Edited by:

Sheldon Pereira

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