US golf’s PGA Tour has turned down a minority investment and potential strategic partnership offer from Endeavor, the international entertainment and sports giant.
Mark Shapiro, Endeavor’s president and chief operating officer, told media late last week that the offer had been rejected by the tour, and this has now been confirmed directly to Sportcal (GlobalData Sport).
It is understood that the PGA Tour was unwilling to meet the financial terms Endeavor had set out as conditions for a deal – namely, a $25 million-per-year service fee.
Speaking to Sportico, Shapiro said: “They've officially turned it down. We’re big fans of golf, and we'll continue to champion the PGA Tour, but we're not going to be an investor at any level.”
Endeavor had made its interest in taking a stake in the PGA Tour plain earlier this year, related to the latter body’s framework agreement with the Saudi Public Investment Fund which will essentially combine the PGA Tour with the PIF’s controversial LIV Golf venture.
Ari Emanuel, Endeavor’s chief executive, confirmed that his company had submitted a bid earlier this month.
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The tour’s talks with potential investors – Endeavor was one of several hopefuls, a number which also includes Fenway Sports Group – reportedly stem from the PGA Tour’s newly created investment vehicle, launched as part of the framework agreement with the PIF.
However, Shapiro has now said: “We asked for $25 million a year in services, and if they would have agreed to that, we would have been happy to make a minority investment.
“But we get it: They have a lot of suitors, a lot of bidders, a lot of attractive offers, and they declined. So we’ll just continue with our long-standing partnership as-is with the hopes of growing it further in the future.”
The tie-up between the PGA Tour and Endeavor currently involves the latter selling commercial rights and managing tournaments for the premier golf series.
The framework agreement uniting the PGA Tour, European golf's DP World Tour, and the PIF-backed LIV Golf circuit was announced in June, and the three parties have until December 31 to agree on a binding contract.
According to the framework agreement, the for-profit assets of the three circuits will be combined into a new subsidiary tentatively called NewCo. After an evaluation of those assets, the PIF, which owns 93% of LIV Golf, will make a minority investment into the new entity.
NewCo will be an umbrella for all future golf-related investments of the three groups and plans to create financial returns through “targeted mergers and acquisitions to globalize the sport.” The PIF, meanwhile, will invest in both the PGA Tour and DP World Tour as a “premier corporate sponsor.”