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PGA Tour And Saudi Arabia’s Public Investment Fund Drop No-Poaching Clause

By  |  July 13, 2023
PGA Tour And Saudi Arabia’s Public Investment Fund Drop No-Poaching Clause

The PGA Tour and Saudi Arabia’s Public Investment Fund took a step closer to finalizing their framework agreement last week after a review by the US Department of Justice (DOJ). The DOJ raised concerns about the non-solicitation clause in the agreement, which would have prevented both tours from recruiting players from each other. The clause has since been removed.

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    “The two sides have agreed to drop a provision not to poach one another’s players for their two tours,” said an anonymous source to The New York Times.

    The decision to drop the clause comes after months of scrutiny by the Justice Department. Sen. Richard Blumenthal, D-Conn., was particularly concerned over a nondisparagement clause in the framework agreement, but most experts agree these types of stipulations don’t normally concern the Justice Department. 

    The PGA Tour’s merger with Saudi Arabia’s PIF and the rival LIV Golf League, first announced on May 30, mainly aims to curb the latter’s ability to draw high-profile Tour players away with guaranteed, multiyear contracts. 

    Related: PGA Tour Faces Congressional Probe Over Controversial Saudi Deal

    Under pressure from US antitrust regulators, PGA Tour chief operating officer Ron Price told US senators during a subcommittee hearing on Tuesday that PIF was prepared to invest more than $1 billion into the new commercial venture. According to the framework agreement, the PGA Tour will have a voting majority on the new company’s board, regardless of the size of PIF’s investment. 

    Mark Schlabach of ESPN reported: “The PGA Tour notified its policy board of the development, which was first reported by The New York Times on Thursday”. 

    Tisha Thompson of ESPN reported on the same story, saying: “The PGA Tour remains the most viable path back into majors for most players, since LIV does not have any kind of world ranking points structure that would allow its players to use their weekly performance to get into the golf world’s biggest tournaments”. 

    Greg Norman, LIV Golf CEO and commissioner, said his league’s roster is full for the 2023 season, and the future of the circuit that features shotgun starts, team competition and 54 holes is uncertain at best. He added, “If the deal is finalized, the new company’s board would make a ‘good faith’ evaluation of LIV Golf, and PGA Tour commissioner Jay Monahan would have the final authority in deciding whether the circuit plays beyond this season.” 

    The federal government is expected to decide in the coming months whether to begin proceedings to block the agreement of the two former antagonists. Furthermore, the PGA Tour claims they face an existential threat from the growth of LIV Golf – which has had a one-way flow of players due to the vast paychecks awaiting LIV players – and hopes that the merger with the Public Investment Fund will reverse the stubborn trend. 

    The removal of the non-solicitation clause has helped the PGA Tour and LIV Golf move closer to a definitive agreement which could soon provide players with a path back to the PGA Tour’s major tournaments.