European and PGA Tour alliance helps fend off Premier League threats

Bernie McGuire
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European and PGA Tour alliance helps fend off Premier League threats

Keith Pelley the CEO of the European Tour (Photo by David Cannon/Getty Images)

European Tour CEO, Keith Pelley revealed the European Tour received a ‘compelling offer’ from the Premier Golf League before signing an historic strategic alliance with the PGA Tour. Under the alliance, the PGA Tour will take a minority investment stake in the European Tour Productions.

The European Tour Productions is the Tour’s production company that distributes and produces all its content globally to 150 countries with a reach of 500 million plus. It was originally a partnership, joint venture with IMG but in 2017, the Tour negotiated its way and changed the partnership where it became 100 percent owners of ETP and that is the entity that the PGA Tour have a minority investment in. As part of this new agreement PGA Tour Commissioner, Jay Monahan will join the 15-person board of the European Tour.

“Jay is a remarkable visionary,” said Pelley. “He’s a player’s Commissioner. He’s a man of great integrity. He’s a terrific leader. And I think he is coming on our board, the largest professional golf tour in the world, with over 340 million people in the US and 60 percent of the golfers, for him to come on our board; he wants to come on.

“It’s just an unbelievable signal and a great sign for European golf, not The European Tour but European golf. I couldn’t be more excited about it, and our board, you know, made this decision unanimously this week, and I can tell you, they are absolutely excited about Jay joining the board.”

Naturally, it will mean Monahan now having a vote on the European Tour board but the articles of association of the board dictates the majority comes from ex-members voted on that board by the players. So the players will always have the majority. Monahan will be a non-Executive Director who would have a vote.

Pelley was soon into the near 30-minute Zoom conference when asked if interest from the Premier Golf League or the Raine Group had happened and if so, if it accelerated any discussions 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 that was made unanimously by the board of directors.

“I can also say Raine Capital led by Colin Neville were very professional during their entire conversations. I have the utmost respect for them during our conversations. But we’re not here to talk about Raine Capital and PGL. We’re here to talk about our relationship with the PGA Tour and their investment in our business, which is — which is important. The fact that they were willing to invest in the European Tour Productions speaks volumes of how far this partnership can really go.”

In announcing the new financial arrangement with the PGA Tour, Pelley was particularly critical of talk that the tour is in financial trouble.

“I read one Tweet that said a take over is inevitable because of the situation that we are in. I find that staggering, somewhat tiring, and it is a great example of a story that perpetuates itself with no facts,” said Pelley. “And I’m not really sure where exactly that it’s come from other than a couple of naysayers out there that seem to have personal agendas that are talking about our financials that are just not true.”

Though it has been the worldwide COVID-19 pandemic, and the effect on all businesses, that Pelley admits has helped accelerate the alliance with the PGA Tour.

“What I can tell you is that it has been an enlightening two to three months, and as I said, we’ve had a number of opportunities, The European Tour, for investment partners over the last couple years. As you know, one of the big things that’s happening in sports now is private equity is getting involved, and we have had a number of private equity companies contact us over the last couple years,” he said.

“A couple we have been proactive with, as well. However, when I said it came together quickly over the last 72 hours, deals like this always do, they come together, and at the end of the day, the PGA Tour and ourselves are completing what we believe our members, what you have all said, what stakeholders have said to us, our partners have said to us, is that some way, we need to work together closer for the better of the game, and I think thus, that’s what we are doing, and we are both committed to doing it.

“I think COVID certainly was the catalyst back in April, and like I said, things can always come together quickly, and they did over the last 72 hours and I’m thrilled and excited about what has happened.”

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