PGL’s new letter to Tour pros claims $10 billion worth and demands valuation
The Premier Golf League has sent a letter to the PGA Tour Policy Board.
Getty Images/PGL
The Premier Golf League has sent a letter to the PGA Tour Policy Board, setting the stakes for men’s professional golf at what it says is “a historic crossroads” for the game. The PGL letter bills itself as an alternative to the league Saudi-backed LIV claims its vision is capable of generating $10 billion in value and promises that 50% of that value would be split among players. He also calls for an independent assessment of the proposal, calling the Tour-commissioned presentation “bulls…”.
Need a minute? I can’t blame you. Let’s make sense of it all, one thing at a time.
What is PGL and how is it different from LIV?
Good question. PGL and LIV Golf have similar formats in mind for professional golf – 54 holes, team structures, etc. – but different funding sources and different financial plans. LIV’s support comes from the Public Investment Fund, Saudi Arabia’s sovereign wealth fund. PGL funding involves private investors and franchise owners and does not include Saudi support. The PGL’s vision would have it exist under the PGA Tour umbrella and give players upfront cash payouts plus 50% equity.
PGL’s new letter compliments (and takes credit for) LIV’s vision, calling attention to the “superb format (based on our own original PGL format)”. But it presents itself as an alternative to LIV.
What does the new letter ask?
Two things, really.
Requirement n°1: An audience with Tour pros.
First, it requires a hearing with the PGA Tour Policy Board. This board is made up of four PGA Tour pros – Kevin Kisner, James Hahn, Charley Hoffman and Rory McIlroy – and six other independent (non-player) directors. The PGL was unable to secure a hearing with PGA Tour Commissioner Jay Monahan and, although McIlroy had previously declared his interest, was also unable to appear on the board. .
The PGL says the board has a “fiduciary duty” to learn more about the proposals and to share its letter with voting members of the PGA Tour (its players).
Lee Westwood defends his decision to participate in the LIV Golf Invitational Series event
Zephyr Melton
“It’s hard to see how any board member could refuse to talk to us (or agree to get the independent assessment) and still fulfill their fiduciary duty to voting members,” an additional PGL document read.
Requirement no. 2: Independent valuation.
The second request concerns this independent evaluation. One of the reasons the Tour publicly rejected the PGL plan is because it commissioned a study from Allen & Co. that challenged the PGL’s ability to generate $10 billion by 2030.
The PGL letter included correspondence from McIlroy: “We had Allen and his company present at the board meeting in Orlando regarding the PGL proposal. They don’t think 10B by 2030 is achievable at all. They said it would take 20 Ryder Cups a year by then to get to that number.
PGL’s follow-up on this point was particularly pungent: “In the world of corporate finance, this is technically known as ‘bulls…’.” Their objection is that Allen & Co. are not independent, have not spoken to PGL. and have not done any of the necessary research or been aware of the relevant financial data to arrive at this decision.
The letter includes a call to action and asks tour pros to message player reps with some version of the following language: “As a member of the tour, I ask you to obtain and post a review independent of PGL #playerpower #transparency proposals.”
Seventy or more of those messages, he adds, would trigger a response.
What else does the letter say?
The letter points out that under the PGL vision, Tour pros would not need to get releases to play PGL events because they would live under the PGA Tour umbrella. He places this vision as a clear counterpoint to LIV, which he describes as “an existential threat”. It also inspires action.
“You should not fear the wrath of Jay Monahan, he is not on the Policy Board and works for you. You must exercise your rights. Although this is ‘your’ PGA Tour, you do not own it (You also won’t own LIV or the Super Golf League.) You could own half of the PGL.
The letter ends as it begins: rather dramatically.
“Act now or spend your life asking yourself, ‘What if…?’
What else is going on?
A little! Lee Westwood was the latest to speak out on his bid to take part in the first LIV event outside of London, joining Phil Mickelson, Louis Oosthuizen and a host of 100 top pros.
Elsewhere, at a press conference on Wednesday, McIlroy discussed plans for the PGA Tour’s new fall series.
As for the Tour? They claimed to have abandoned any outside proposals. It’s not that simple, of course – the proposals will continue to swirl. But they chose to respond by shutting up, remaining relatively quiet and continuing with the current season as planned.
Now what?
According to the PGL letter, the pros have two options, as shown below:
You could:
A. own 50% of the PGL and earn approximately $20 million each ($2 million upfront), with an additional value of approximately $1 billion to be shared among Korn Ferry members and DP World Tours
Or you could:
B. do nothing and let LIV generate this value, while the two oldest circuits consider a complete merger which would not serve the membership of either
It’s not that simple either, of course. The PGL has not yet demonstrated the validity of its model or the extent to which it could implement its plan. He didn’t show exactly how he would fit his vision with the current PGA Tour model. Still, every player and agent should be puzzled by the claims of $5 billion in equity. Every PGA Tour pro must be curious about a $2 million cash advance. Every Korn Ferry Tour pro must be intrigued by a $300,000 cash payout.
In other words, players have options. Behind the scenes, no doubt, they are hoping to find out more. It remains to be seen whether he will find a place with the players. But the PGL is not going away yet.
You can see a copy of the letter below.
PGL
