Professional Golfers’ Association Tour – the organizer of the main professional golf tours played by men in United States and North America – has had to deal with emergence of Premier Golf League (PGL) in the last 12 months.
Backed by The Raine Group – a private equity firm – and some say by an investment fund with financing from the Saudi Arabian regime, this breakaway league aims to entice top 48 golf players and pit them against each other across 18 events in 10 months. They said “Golf is not owned by anyone or any organization. Premier Golf League wants the top players to compete against each other, week in week out which will surely excite the fans.”
The threat of a competitor wooing the top players with formal offer letters worth hundreds of millions of dollars made the PGA Tour take notice. They didn’t get flattered at all with Raine Group’s remarks at the launch of Premier Golf League on “working together with PGA Tour rather than compete with them.” Acting swiftly, they initiated negotiations with the European Tour – PGA Tour’s counterpart in Europe – for a potential alliance. After months of deliberation, it turned into a reality in November of 2020.
This announcement came as a significant blow to the PGL.
Merger talks between the PGA Tour & European Tour had been going on for months. The same got a bit jeopardized when PGL swooped in with a fresh offer submitted to the European Tour asking to work together. PGA Tour were nimble and agile to quickly sign and seal the deal with their European counterparts.
PGA Tour now has a minority stake in European Tour’s media production company which will aid both explore all facets of collaboration including global media rights.
Last week, PGA Tour took everyone by surprise by announcing a Player Impact Program – a $40 million bonus pool to be distributed among high-profile tour professionals. A bonus pool for players who boost publicity, drawing eyes and attention to the sport.
Another example of how being agile, proactive and vigilant can take care of outside threats. Premier Golf League has a huge mountain to climb here now.
Sports ecosystems have come under immense pressure due to the pandemic. As a result, lot of interest has been generated by Private Equity/Venture Capitalists firms from around the world. They do see a lot of value in some of the sporting leagues/teams by meeting their objectives of generating returns.
Is this phenomenon a welcome development or should the sports fraternity be wary of these firms with forced exit horizon?