PGA Tour Legal Costs Increasing 10-Times Over Shows The Saudi's Plan To Take Over Professional Golf Is Working, And Quickly
The PGA Tour's legal fees increased from $2 million in 2021 to $20.7 million in 2022. The 10x increase in legal costs is a direct result of its early battle with the Saudi PIF and LIV Golf, which makes the fact that the Tour is currently in merger talks with the Saudi PIF a full-circle moment in the most literal way imaginable.
Sportico obtained the PGA Tour's IRS filings that span the 2022 calendar year. While the filing pre-dates the June 2023 announcement of the merger between itself, the DP World Tour, and the Saudi PIF, it highlights the expense of going to battle with the Saudis and LIV Golf.
PGA Tour commissioner Jay Monahan has had an eventful 2023. (Photo by Keyur Khamar/PGA TOUR via Getty Images)
Golfers who left the PGA Tour for LIV sued the Tour in August 2022 which was quickly followed by the Tour's own countersuit. According to the report, the $20.7 million in legal expenses included only the first five months of the Tour's fight with LIV as well as costs related to the Department of Justice's review of the agreement.
To put the legal fight and the $20.7 million into perspective, that figure is larger than the legal fees the Tour accrued over the previous 14 years combined.
The Ones Causing The PGA Tour To Bleed Held The Stitches
While the Tour reported $1.9 billion in revenue in 2022, it also reported $1.87 billion in costs, which was a $32 million increase over the previous year.
The cost of doing business is one thing, but cutting back on legal fees would be a quick way to stop the profuse bleeding the Tour was suffering from and the framework agreement with the Saudis proved to be the only option as the announcement halted the many legal battles.
PGA Tour commissioner Jay Monahan said as much just two days after the framework agreement between the Tour and the Saudi PIF was first announced.
“We cannot compete with a foreign government with unlimited money,” Monahan told staff, according to The Wall Street Journal. “This was the time… We waited to be in the strongest possible position to get this deal in place.”
The Saudis Flipped Golf On Its Head In 362 Days
Monahan's note about "the strongest possible position" could loosely be interpreted to "we have no money left," but that's simply the reality of the situation when you're dealing with a Public Investment Fund valued at over $600 billion.
Saudi PIF governor Yasir Al-Rumayyan has had a 2023 to remember. Photographer: Marco Bello/Bloomberg via Getty Images
Pointing to the legal fees that the Tour simply could not keep up with for much longer is a practical and valid excuse for its decision to get in bed with the Saudis, but it certainly doesn't make the situation any less messy.
If this doesn't serve as an example of the Saudis very much wanting to take over professional golf as a whole, I'm not sure what will.
LIV Golf held its inaugural event on June 9, 2022, and on June 6, 2023, the regime forced the PGA Tour's hand into its own by announcing the framework agreement.
In less than a year the Saudis changed the sport of golf as we've known it.
Follow Mark Harris on X @itismarkharris and email him at mark.harris@outkick.com