The European Tour’s new “strategic alliance” with the PGA Tour is not a merger, stressed chief executive Keith Pelley, and was preferred to an offer from the people behind the proposed Premier Golf League.
Yesterday’s announcement of the new partnership between golf’s leading professional tours, which Pelley said had been hammered out in the last 72 hours, is short on real detail, but will involve the PGA Tour taking out a minority stake in European Tour Productions – the Tour’s in-house TV company – while the US Tour’s commissioner Jay Monahan will join the European Tour board as a non-executive director.
The standardisation of the global golf calendar for elite professional golf would appear to be one aim of the partnership, as well as joint moves in commercial and TV rights in global markets.
But Pelley did admit that this deal with the PGA Tour had been preferred instead of a counter-offer from The Raine Group, the private equity firm behind the proposed Premier Golf League, a rival circuit financed largely by money from Saudi Arabia.
The chief executive was at pains to stress that this was not a merger or takeover and the European Tour was not under pressure to accept the financial input from America – although there is no reciprocal stake or board presence from Europe into the PGA Tour.
“Let me be perfectly clear: we did not have to enter into this agreement or any other,” he said. “We chose to because it’s in the best interest of both tours, for our players, for both golf fans and for the global professional game.”
Pelley said he had seen assertions that a takeover of the European Tour by the PGA Tour was “inevitable” which he said was “staggering and simply wrong”.
“If this was a financial situation we’d have done far more than a strategic alliance with a minority investment,” he said. “Categorically we are not in financial difficulties, that is simply wrong, we are in robust financial health with a strong balance sheet, the strongest ever, and a very strong network of partners.
“We created 15 tournaments from scratch this year (because of Covid-19) while founding a £3 million health strategy – I don’t think that it would be possible for a business that did not have robust finances.”
It does appear, however, that the presence of the The Raine Group and their offer to the European Tour – presumably along the lines of their proposed “new world” of golf with top players playing limited-field events for huge prizefunds in a team environment similar to F1 – accelerated the deal with the PGA Tour.
“Raine Capital presented a very compelling offer to take the European Tour to another level but in a different direction,” said Pelley. “Ultimately we felt partnering with the PGA Tour was the best option for our members and for global golf, a decision made unanimously by our board.”
He declined to say what the bones of that offer were, only adding that The Raine Group “were very professional during our entire conversations and I have the utmost respect for them.”
Pelley added that what had been an ongoing discussion about greater collaboration between the tours had been accelerated by greater co-operation during the pandemic.
“Jay and I have been talking about working more closely for five and a half years,” he said. “I always said golf is fractured, too fractured, this was just a moment in time when everything aligned.
“Covid has brought challenges but also opportunities. We’ve spent more time talking and less time travelling, and we started sharing best practices, or chief medical officers have been in constant dialogue and conversations on how we should work together.
“We’re in this game together, and Covid showed we shouldn’t be competing against each other, we should be working together and aggregating our skills, best practices and commercial streams.
“This alliance is the logical next step in a move toward a global golf game.”
Pelley couldn’t enter into any detail about greater playing opportunities for players on both tours would manifest itself, but it seems clear the European Tour’s gradual shift of its biggest events to later in the year will accelerate.
The possibility of FedEx Cup points being available to the larger European Tour events in the Rolex Series is one possibility, which might result in a greater number of European stars and US players competing in championships like the Scottish and Irish Opens, Dubai and Abu Dhabi, and the BMW Championship at Wentworth.
