Under pressure from U.S. Department of Justice antitrust regulators, the PGA Tour and Saudi Arabia's Public Investment Fund have agreed to remove a nonsolicitation clause from their framework agreement that would have prevented the tours from recruiting and poaching each other's players, the PGA Tour said Thursday.
The Department of Justice reviewed the framework agreement and raised concerns about the nonsolicitation clause. The PGA Tour notified its policy board of the development.
"Based on discussions with staff at the Department of Justice, we chose to remove specific language from the Framework Agreement," the PGA Tour said in a statement. "While we believe the language is lawful, we also consider it unnecessary in the spirit of cooperation and because all parties are negotiating in good faith."
The entities signed a framework agreement May 30 to combine their commercial assets into a new for-profit entity called NewCo. PGA Tour chief operating officer Ron Price told U.S. senators during a subcommittee hearing Tuesday that the 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. PGA Tour commissioner Jay Monahan will serve as chairman of the new company; PIF governor Yasir Al-Rumayyan will be CEO.
The deal must still be approved by the PGA Tour's policy board, which includes five player directors, including Rory McIlroy and Patrick Cantlay.
Even without the nonsolicitation clause, it seems unlikely that a player would jump from the PGA Tour to the LIV Golf League while the entities negotiate the final details of their surprising alliance. LIV Golf CEO and commissioner Greg Norman 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.
If the deal is finalized, the new company's board would make a "good faith" evaluation of LIV Golf, and Monahan would have the final authority in deciding whether the circuit plays beyond this season.
PIF has spent more than $2 billion funding the LIV Golf League in its first two seasons. It lured away past major champions Phil Mickelson, Dustin Johnson, Brooks Koepka, Cameron Smith and Bryson DeChambeau with guaranteed, multiyear contracts reportedly worth more than $100 million.