The deal that rocked the golf world: Inside the PGA Tour-LIV Golf alliance

THE MOST UNLIKELY union in professional golf history — the PGA Tour’s stunning partnership last week with the DP World Tour and Saudi Arabia’s Public Investment Fund — started with a WhatsApp message. The fact the sender was James Dunne III, a Wall Street dealmaker, makes the alliance even more improbable.

Saudi Arabia’s sovereign wealth fund, with about $620 billion in assets, is financing the rival LIV Golf League, which has traded blows with the PGA Tour during a bitter two-year battle to topple each other for supremacy in the sport. As the game’s best players gather this week at Los Angeles Country Club for the 123rd U.S. Open, the fractured sport seems closer than ever to reuniting.

Dunne, an independent director on the PGA Tour’s policy board, was one of the founders of Sandler O’Neill and Partners, an investment banking firm that lost 40% of its employees when hijackers crashed a plane into the south tower of the World Trade Center in the Sept. 11, 2001, terrorist attacks. All but four of the 19 hijackers on Sept. 11 were Saudi citizens, and the Saudi kingdom was the birthplace of Osama bin Laden, the head of al-Qaeda and mastermind of the attack.

Dunne would have been in the south tower that day if he hadn’t been on the back nine of his Wall Street career. Instead of going to work, Dunne was trying to qualify for the U.S. Mid-Amateur at Bedford Golf and Tennis Club, about 40 miles north of Manhattan. A golfer with an impressive 1 handicap at the time, Dunne was 1 under after four holes when a United States Golf Association official told him he needed to call his office because a plane had crashed into the twin towers. Dunne watched the skyscrapers collapse on TV in the club’s pro shop.

Of the 171 Sandler O’Neill employees who worked on the 104th floor of the south tower, 66 died that morning, including two of Dunne’s partners: his best friend, Chris Quackenbush, and his mentor, Herman Sandler.

Quackenbush, who Dunne had known since they were teenagers growing up on Long Island, had encouraged him to play in the U.S. Mid-Amateur qualifier at Bedford Golf and Tennis Club instead of one the day before in Greenwich, Connecticut, because the course better suited his game.

Dunne put his head down and rebuilt Sandler O’Neill. The firm had built its foundation on mergers and acquisitions involving small and medium-sized banks, but its deals kept getting bigger and bigger. Dunne was an adviser on TD Ameritrade’s merger with Charles Schwab and dozens of other billion-dollar acquisitions. Sandler O’Neill and Partners grew into the largest investment banking firm focused on the financial services sector. The company was acquired by Wall Street investment bank Piper Jaffray in 2020. CNBC reported the merger was worth about $485 million.

Dunne is president of Seminole Golf Club in Juno Beach, Florida, home of the most famous pro-member tournament in the sport (LIV Golf players weren’t invited this year). He’s a member of several clubs, including Augusta National Golf Club and Shinnecock Hills in Southampton, New York, where he set the course record with a 63 in 2010 (Tommy Fleetwood tied the mark in the final round of the 2018 U.S. Open). He is a close friend of PGA Tour stars Rory McIlroy, Rickie Fowler and others. When Dunne qualified for his first USGA event, the 2018 U.S. Senior Amateur Championship, Justin Thomas sent out a congratulatory tweet. Former NFL quarterback Tom Brady considers Dunne one of his most important mentors.

“When you’ve been around people a long time, you see the 360,” Brady told Sports Illustrated in 2021. “Jimmy is an amazing leader, a great dad, a great husband … honest as the day is long. You don’t do amazing things by taking three knees and punting, hoping someone else makes a decision for you.”

Even before joining the PGA Tour’s policy board Jan. 1, 2023, Dunne had been working behind the scenes, talking to players and agents, in hopes of repairing the fractured sport, which had splintered like never before when two-time Open Championship winner Greg Norman launched the Saudi-funded LIV Golf League and poached many of the PGA Tour’s biggest stars with guaranteed contracts reportedly worth as much as $200 million.

With the Public Investment Fund (PIF) investing more than $2 billion into the breakaway circuit in its inaugural season in 2022, Norman was able to lure past major champions Dustin Johnson, Phil Mickelson, Brooks Koepka, Bryson DeChambeau and others away from the PGA Tour. Commissioner Jay Monahan suspended more than 30 players for competing in LIV Golf tournaments without conflicting event releases.

In August, 11 players filed an antitrust lawsuit against the PGA Tour in federal court, alleging it was using its monopoly power to quash competition. The PGA Tour countersued, accusing LIV Golf of interfering with its contracts with players. It was a full-blown golf civil war.

Enter Dunne, who is known as Jimmy to his colleagues and friends. His Wall Street pedigree in bringing sides together and making deals work made him a likely mediator to cool tensions between the sides. But he would have to put aside his personal feelings about 9/11 and Saudi Arabia’s role in the terrorist attacks.

Once Dunne joined the PGA Tour’s policy board, he wanted to reach out directly to not Norman but Yasir Al-Rumayyan, the governor of the sovereign wealth fund. After an arbitration panel in London ruled April 5 that the DP World Tour could impose sanctions on its members for competing in LIV Golf events, Monahan gave Dunne permission to contact Al-Rumayyan.

“What I always felt is that I didn’t understand what the LIV Tour was really trying to accomplish,” Dunne told ESPN. “And so at some point in time, between the legal expense and them basically recruiting our players, I thought it was important that we would speak to the main guy and not to anybody else. Over time, and after we had gotten some good legal victories, I was able to convince Jay that we should go over and try to find out if there is a middle ground here. Is there something we can do so that we can put the legal battle and the whole sort of conflict behind us?”

On the morning of April 18, Dunne sent Al-Rumayyan a message on WhatsApp. Al-Rumayyan responded a few minutes later. They spoke on the telephone for a while that day and agreed to meet in person in London later that month. It was the beginning of one of the most complicated deals in Dunne’s career.

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IN LATE APRIL, Dunne met Al-Rumayyan at a hotel outside London. They had dinner and smoked cigars together that night.

“He was approachable,” Dunne said. “We spoke about golf, his career and his view of what he wanted to grow in the game of golf. My impression was that we can work together. He really loves the game of golf. He’s very thoughtful and very calm, and I found him to be extremely decent.”

The next day, Al-Rumayyan, a 12 handicap, and PGA Tour policy board co-chairman Ed Herlihy beat Dunne, a 5 handicap, and PIF attorney Brian Gillespie in a round of golf at Beaverbrook Golf Club in Surrey, England.

Human rights groups, including Amnesty International and 9/11 Families United, heavily criticized the PGA Tour’s decision to do business with the Saudis in statements Tuesday.

Dunne raised eyebrows last week when he told the Golf Channel that he is convinced the Saudis he dealt with weren’t involved in the Sept. 11, 2001, terrorist attacks. “I am quite certain — and I have had conversations with a lot of very knowledgeable people — that the people I’m dealing with had nothing to do with it,” he said. “If someone can find someone who unequivocally was involved with it, I’ll kill them myself.”

Dunne returned to the U.S. and told Monahan he believed there was a chance they could come to some sort of compromise with the Saudis. Monahan told reporters last week that Dunne and Herlihy’s early conversations with Al-Rumayyan and other PIF officials got the ball rolling in negotiations.

“The first conversation that I was not a part of was what was the most important conversation because of the position I’ve been in and what we’ve been trying to do with our tour,” Monahan said. “But when they came back and said it was a positive conversation and that I should have a follow-up meeting, I think that’s when things started to develop.”

In May, Dunne, Herlihy and Monahan flew to Venice, Italy, where Al-Rumayyan was attending a wedding. Monahan spent time with Al-Rumayyan the night they arrived, and the entire group met for several hours the next day, hammering out the framework of what a potential alliance might look like.

On May 28, the Sunday of Memorial Day weekend, the men met again in San Francisco, where they finalized a formal plan. The next day, Monahan and Al-Rumayyan signed a two-page framework agreement for a partnership that would stun the golf world.

“I think there was a desire for both sides to come together to some kind of peace,” Dunne said. “It was extremely complex and difficult, but people really wanted, in my mind, to do something that was going to be good for the game of golf.”

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ACCORDING TO DUNNE, Monahan will oversee the PGA Tour and the LIV Golf League under the agreement. At the end of LIV Golf’s season in November, Monahan will evaluate whether the team-focused circuit of 54 holes, shotgun starts and no cuts will continue or fold. Dunne said it will be Monahan’s decision alone.

It’s unclear what Norman’s role will be going forward, although he told staff last week that his circuit is a stand-alone entity and is making plans for 2024 and beyond. A LIV Golf spokesperson said Norman wasn’t available for comment.

“In the end, it’s really one person that will decide, and the PGA Tour will never fund any aspect of LIV,” Dunne said.

According to Dunne, the PGA Tour will also control the new yet-to-be-named for-profit entity, which “combines PIF’s golf-related commercial businesses and rights (including LIV Golf) with the commercial business and rights of the PGA Tour and DP World Tour,” according to the release.

Monahan will serve as the new company’s CEO; Al-Rumayyan will be chairman. Dunne said the entity will consider future “strategic opportunities and evaluate if they’d be useful for the PGA Tour.” It might be the purchase of a golf course, another tour or a media network. PIF will be the initial investor and will have the exclusive right to further inject more money into the company.

“The PGA Tour is the controlling partner of the new company,” Dunne said. “It is extraordinarily unlikely that [Al-Rumayyan’s] going to be involved in the day-to-day. No, he would not be involved in day-to-day. But if we were going to look for a strategic opportunity, we would obviously involve him and he’d help evaluate it and decide whether or not it would be worth them investing in it. It could be very possible that we could go a long period of time before there’s any investment of any type.”

The Saudis will be a bank for the new entity, according to Dunne, but only if money is needed. Dunne doesn’t know how much the Saudis are willing to invest; Al-Rumayyan told CNBC he is prepared to spend “whatever it takes … that’s what we’re committed for.”

Dunne said PIF will invest in the new company, but not in the PGA Tour and won’t pay its members. The PGA Tour will remain a 501(c)(6) tax-exempt organization and retain its own operations, including scheduling, sanctioning of events, rules and competition.

What will the Saudis get out of the deal? They’ll make money if the new for-profit venture grows, and they’ll get a seat at the table in the new global golf ecosystem. Dunne said Aramco, Saudi Arabia’s public petroleum and natural gas company, could become a PGA Tour sponsor. Al-Rumayyan will join the PGA Tour policy board. As one person familiar with Al-Rumayyan told ESPN, “He wants to be standing under the tree at Augusta National on Thursday at the Masters.”

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ON JUNE 5, officials from the PGA Tour, DP World Tour and PIF gathered at investment banker Michael Klein’s office in New York to piece together a strategy in announcing the partnership. A news release was written and a media strategy was developed. Monahan and Al-Rumayyan would announce the deal together on CNBC the next morning, minutes after PGA Tour and DP World Tour players would be notified of the alliance in memos.

Dunne texted McIlroy, one of the PGA Tour’s most loyal supporters, on Monday night, asking if they could talk the next morning. Dunne called McIlroy at 6:15 a.m. ET Tuesday to tell him the news.

“He seemed pleased that there would be peace coming,” Dunne said. “He was pleased that there was the potential for peace. He was aware that there had been some contact back and forth, but had no knowledge, intentionally on both parties, where dialogue was.”

McIlroy said Dunne told him, “Rory, sometimes you got 280 over water, you just got to go for it.”

“I still hate LIV,” McIlroy said. “Like, I hate LIV. I hope it goes away, and I would fully expect that it does. I think that’s where the distinction here is. This is the PGA Tour, the DP World Tour and the PIF — very different from LIV.”

Players have criticized Monahan and DP World Tour CEO Keith Pelley for keeping them in the dark about perhaps the most important decision in the circuit’s history. Dunne said confidentiality was paramount in such a controversial deal.

“We wanted to treat all the players equally because a deal like this has so much emotion in it,” Dunne said. “I didn’t want to be in the situation where we told some players and not others. If you told 20 or 30, you would have no confidentiality. People had their own particular interests, could do what they would want to do, [and] some might try to derail the deal. What we tried to do is get what we thought was a very good deal for the PGA Tour and then present that to the players.”

Shortly after the agreement was announced, Monahan flew to Toronto, the site of last week’s RBC Canadian Open. He met with more than 100 players for longer than an hour. Monahan described the meeting as “tense,” and a few players called for his resignation.

“The reason why there was so much backlash during the meeting was we were just all kind of in a state of shock,” said longtime PGA Tour member Brandt Snedeker. “Nobody knew it was coming. I think inevitably with these kinds of deals, you never know they’re coming, otherwise, they’d never get done.”

Australia’s Geoff Ogilvy said Monahan only provided players with “broad strokes” and few details because the plan hadn’t been formally approved. Ogilvy said he was a “little bit grumpy” with Monahan, but “generally felt for him because he clearly can’t tell us anything.”

“He said, ‘Hang in there. This is actually a good deal,'” Ogilvy said.

There was a heated exchange during the meeting between McIlroy and Grayson Murray, the 232nd-ranked player in the world, who shouted for Monahan to resign, saying, “We don’t trust you, Jay. You lied to our face.”

Two days after the meeting, Murray told ESPN that he hadn’t changed his mind about Monahan.

“What I said in the meeting about [how] I hope he resigns and the people underneath him [resign], I stand by that,” Murray said. “I haven’t talked to Jay. I’ve known Jay for a long time, and I think this whole thing just has been handled the wrong way. I think we just need a new face.

“I think there are some things going on internally that we don’t know about, and I don’t think they’ll ever come out, which just seems fishy. It’s all happening so quickly without the players’ knowledge. It’s something so important, like the biggest thing that’s ever happened to our tour, and we find out the morning it comes out.”

Murray said others in the room were upset about the PGA Tour’s lack of transparency. Players don’t have the power to force Monahan out. Only the policy board can make that decision, and Dunne and Herlihy helped him broker the deal with the Saudis.

The full policy board, which consists of three other independent directors, five players (Patrick Cantlay, Charley Hoffman, Peter Malnati, McIlroy and Webb Simpson) and PGA of America director John Lindert, must still formally approve the alliance. Al-Rumayyan told CNBC that the deal should be approved in the coming weeks.

“I think some people agree with me, definitely,” Murray said. “But you know, there’s no way to get on the board and say, ‘Hey, you’re fired.’ We don’t have that power. That’s why I think a union would be great for our sport. I don’t know why we haven’t come together with that. I think any other sport that has a union is doing great. They have power. They make decisions. It’s a players’ tour. At least they keep saying it’s a players’ tour.”

Former world No. 1 golfer Justin Rose, an 11-time winner on the PGA Tour, said Monahan has a “hung jury” or “split camp” among his membership.

“I think some players maybe understand the pressure that he was under, and maybe the business side of things where some things just have to transpire the way they transpire,” Rose said. “But, you know, other guys are not willing to accept the way it went down. It’s a little muddy right now for sure.”

Lucas Glover, the 2009 U.S. Open winner, said many PGA Tour players “want a pound of flesh right now.”

“I think [Monahan’s support] is probably pretty minimal right now because of just the reaction and it just hasn’t played out yet,” Glover said. “On its own head, it looks pretty awful. But I think a lot of people cooled off after the meeting and got some questions answered. I think the end result needs to be beneficial to the guys that stuck around, and that will go a long way to earn back trust.”

One of the biggest concerns among most players, according to Ogilvy and Snedeker, is that LIV Golf League players won’t be allowed to simply rejoin the PGA Tour. Dunne said a committee of players and administrators will decide on potential punishment for players who left and want to rejoin. He said golfers who left also won’t be allowed to participate in a planned equity sharing in the new entity.

“I think you’d get a pretty strong consensus amongst the players that nobody really wants any of these guys to come back who went to LIV,” Ogilvy said. “They would feel a bit cheated because we all chose the tour. Those who stayed, we chose the tour and were told that this is the right side to be on. ‘Don’t do this. You’ll never come back. If you go, you’ll never be able to come back.’ That’s the one thing I think that really was triggering all the boys is these guys, they’ve gone off and got their piles of money.”

Snedeker said some LIV Golf players might have a more difficult time being accepted back than others.

“Most of those guys left on relatively good terms,” Snedeker said. “I think there’ll be some animosity towards the guys that sued us and drug us through the mud and tried to tell us how bad this tour is and how awful it is. I think there’ll be some animosity towards them. But the majority of those guys just made a financial decision, business decision, so I don’t think there’ll be a ton of that.”

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ALONG WITH EARNING back some of his players’ trust, Monahan has to get the deal across the finish line. That won’t be easy, according to legal experts. The agreement might have ended all legal disputes between the PGA Tour and PIF, but the U.S. Department of Justice was already investigating the PGA Tour’s alleged antitrust behavior. Federal regulators will undoubtedly scrutinize the new company as well, according to antitrust experts. The 1914 Clayton Act prohibits mergers and acquisitions that eliminate competition.

Tim Wu, a professor at Columbia Law School and former special assistant to President Joe Biden for technology and competition policy, said there is a “100% chance” DOJ enforcers take a close look at the new alliance. Wu said regulators in Europe also might take a hard look.

“If PIF had just invested in PGA when they were a monopoly, that would be a totally different story,” Wu said. “The challenge here, and this could be any industry, is if you have a monopolist and you have a startup, some kind of competitor to it. [The startup] starts to get some traction, or not. Then you decide to just like, ‘Hey, let’s agree not to compete and share the profits.’ That’s what the antitrust law bans you from doing.”

The agreement hasn’t been finalized and paperwork hasn’t been submitted to the federal government. The deal could be restructured, or PIF and the PGA Tour could simply try to ram it through. When ESPN asked Dunne if the new company would pass the antitrust test, he said, “I’m not a lawyer.”

Wu noted that the Department of Justice recently blocked an announced merger between American Airlines and JetBlue Airways. Last month, a federal judge upheld the ruling and ordered the airlines to separate.

“They tried to say it wasn’t a merger,” Wu said. “The airlines said, ‘Well, it’s not a merger. We’re just an alliance and combining.’ But the Justice Department said, ‘Look, if you stop competing on prices and stop competing for customers, you’re no longer competing, and that’s what we care about.’ So, the Justice Department cares whether you’re agreeing not to compete, whatever laws you want to put on it. That’s what they care about.”

Northwestern law professor Gerald Maatman, one of the country’s leading antitrust lawyers, said PIF’s lawyers will have a difficult time walking back their previous comments about the PGA Tour being a monopoly and using its power to quash competition.

“In essence, it’s like, ‘Forget about all the allegations we made in our lawsuit. We didn’t mean it,'” Maatman said. “From a legal standpoint, it’s very hard to unring the bell when you make those allegations. They’re called judicial admissions by the law. Truth is not a weathervane that turns when the wind blows towards your self-interest. And when you say something in court, it’s kind of hard to weasel out of it down the road.”

Monahan will also have to clarify his comment to reporters last week that the deal was “ultimately, to take the competitor off of the board — to have them exist as a partner, not an owner — and for us to be able to control the direction going forward.”

“That’s surprising he would say this, that one of the benefits of the deal is eliminating competition,” said Craig Seebald, a partner and antitrust expert at Vinson & Elkins law firm. “This is just the heart of it. I probably talked to 30 or 40 antitrust lawyers, and everybody’s just scratching their heads saying, ‘Why would you say that?’ I mean, that’d be the last thing you’d want your client to say.”

Several U.S. politicians, including Sens. Elizabeth Warren of Massachusetts and Richard Blumenthal of Connecticut, have expressed concerns about the proposed alliance and said they’ll be watching its structure closely. In a statement to Time, Warren said the PGA was “selling out to the Saudi regime to draw attention from its atrocious human rights record with a new golf monopoly.”

Blumenthal said in a statement, “The PGA Tour has spent two years lambasting Saudi sports-washing and paying lip service [to] the integrity of the sport of golf, which will now be used unabashedly by the Kingdom to distract from its many crimes. The PGA Tour has placed a price on human rights and betrayed the long history of sports and athletes that advocate for social change and progress. I will keep a close eye on the structure of this deal and its implications.”

It could be months before the alliance between the PGA Tour, DP World Tour and PIF is finalized, if it’s approved at all — passed by the policy board, signed off on by lawmakers, cleared by the DOJ and of course, if the terms are as described. There’s also the possibility of the Saudis making the biggest leverage play of all: a Trojan horse and leaving the PGA Tour and DP World Tour alone at the altar.

“I’m choosing the bullish side of this thing,” Ogilvy said. “If it is how it could be, it could be incredible. I feel like [PIF is] in it for the long haul. I mean, if they hang around with their checkbook, it future-proofs it a little bit. This arms race of how much money can we pay all these players, the PGA Tour was going to lose eventually. So, to come together, however that looks in the end surely is better than bickering about it and pulling half the good players over there and half the good players over there.

“Nobody wins when that happens.”