The five-page agreement signed by PGA Tour commissioner Jay Monahan, DP World Tour CEO Keith Pelley and Public Investment Fund governor Yasir Al-Rumayyan to form a new entity that will align men's professional golf gives the PGA Tour "full decision-making authority with respect to all strategic and operational matters related to competition."
The "framework agreement" was signed May 30 and sent, along with other documents, to a Senate subcommittee looking into the alliance Monday ahead of a July 11 hearing in Washington.
The agreement stated that the "parties share a common goal of creating a global golf partnership and of growing and promoting the game of golf globally, ending divisions and unifying the game of golf for the benefit of all of their shareholders, including players, sponsors, and fans of the game worldwide."
ESPN obtained a copy of the framework agreement Monday. Details of the final agreement are still being worked out, sources told ESPN. Once completed, it will need approval by the PGA Tour Policy Board.
The stunning alliance, which was announced June 6, combines the commercial activities of the PGA Tour, DP World Tour and Saudi Arabia's sovereign wealth fund (PIF) into a new for-profit entity, called "NewCo" in the framework agreement.
Monahan will serve as CEO of the new entity; Al-Rumayyan will be chairman.
"The framework outlines a future for professional golf under the PGA Tour's leadership that benefits players, fans, and the sport," the PGA Tour said in a statement Monday. "Following the recent resolution of litigation, we're working productively towards a definitive agreement. Any resulting agreement will have to be approved by the full board of the PGA Tour, including our player directors."
Under terms of the framework agreement, the PGA Tour will control the majority interest in the new entity, regardless of the size of PIF's investment. PIF will make an initial investment into NewCo and have the right of first refusal to make additional ones.
"The PGA Tour will at all times maintain a controlling voting interest, not withstanding any incremental investment by PIF or exercise of its rights of first refusal," the agreement says. "The PGA Tour parent organization will retain its current level of regulatory oversight of the game of golf with respect to the assets contributed by the PGA Tour where applicable (e.g., sanctioning of events, setting of competition rules and managing inside the ropes) but will conduct its commercial businesses through NewCo. PIF and the PGA Tour will cooperate in good faith and agree on the economics, valuation and governance terms for NewCo and PIF's investment in NewCo."
The agreement doesn't specify what will happen to the LIV Golf League, which is being financed by PIF and fronted by two-time Open Championship winner Greg Norman. The agreement says that "NewCo will undertake a full and empirical data-driven evaluation of LIV and its prospects and potential and will make a good faith assessment of the benefits of team golf in general, and PIF, the PGA Tour and the DP World Tour will work together in an effort to determine how to best integrate team golf into PGA Tour and DP World Tour events going forward."
The PGA Tour suspended players once they competed in a LIV event last year. Under terms of the framework agreement, the tours "will work cooperatively and in good faith to establish a fair and objective process for any players who desire to re-apply for membership with the PGA Tour or the DP World Tour following the completion of the 2023 season and for determining fair criteria and terms of re-admission consistent with each Tour's disciplinary policies."
The proposed alliance is being scrutinized by the U.S. Department of Justice's Antitrust Division and two U.S. Senate committees. The U.S. Senate Permanent Subcommittee on Investigations has invited Monahan, Norman and Al-Rumayyan to testify at the July 11 hearing regarding the entities' planned partnership.
"Our goal is to uncover the facts about what went into the PGA Tour's deal with the Saudi Public Investment Fund and what the Saudi takeover means for the future of this cherished American institution and our national interest," Sen. Richard Blumenthal, D-Conn., chairman of the subcommittee, said in a statement June 21. "Americans deserve to know what the structure and governance of this new entity will be. Major actors in the deal are best positioned to provide this information, and they owe Congress -- and the American people -- answers in a public setting."
The PGA Tour has said the new agreement with PIF would not affect its operations. The tour said it would continue to operate as a tax-exempt nonprofit and would control its scheduling, sanctioning of events, rules and competition. Blumenthal told Monahan that the tour's alliance with the Saudis might put its tax-exempt status at risk.
"This assertion raises additional questions about the terms of the agreement and whether a foreign government may indirectly benefit from provisions in U.S. tax laws meant to promote not-for-profit business associations," Blumenthal wrote in a letter to Monahan and Norman.