Keith Pelley said European Tour's partnership with PGA Tour was not forced by financial pressureGETTY IMAGES
European Tour CEO Keith Pelley has denied that the organization's "'strategic alliance' with the PGA Tour is the first step towards a merger," according to Paul Forsyth of the LONDON TIMES. The alliance, unveiled over the weekend, was described by the tours as a "landmark agreement that would allow them to work together on a new global schedule for the professional game." It will "explore 'all facets of collaboration', including global media rights, prize money and playing opportunities." For much of this year, the two tours have "worked together on protecting their schedules from the pandemic," and that "prompted speculation that the rival circuits were about to become one." Pelley was "keen to dispel that theory." He said, "A merger is miles away. This is critical in terms of keeping our respective identities." The development comes amid "growing financial challenges for the European Tour." Having registered an operating loss in each non-Ryder Cup year from '11-18, Pelley "admitted in the past that they needed to become less reliant on the biennial match." Those ambitions were "complicated by Covid-19," but Pelley insisted that the European Tour's partnership with the PGA Tour was "not forced upon it by financial pressure." He said, "If this was a financial situation, we would have done far more than a strategic alliance with a minority investment. I can tell you we are categorically not in financial difficulties" (LONDON TIMES, 11/29).
FENDING OFF A RIVAL: GOLFWEEK's Eamon Lynch cited sources as saying that the alliance came after "months of tense negotiations," and it "fended off a rival bid to take a stake in the European circuit by the private equity group fronting the Premier Golf League." Talks between the Euro and PGA tours were "complicated by a rival proposal submitted to the European Tour by The Raine Group" (GOLFWEEK.com, 11/27). GOLF DIGEST's Ryan Herrington noted Pelley "confirmed that he had talks with Raine Group, one of the partners in working to make PGL a reality." Pelley said, "Raine Capital presented a very compelling offer to take the European Tour to another level, but in a different direction. Ultimately, we felt partnering with the PGA Tour was the best option for our members and for global golf, a decision that was made unanimously by the board of directors" (GOLFDIGEST.com, 11/27).
SCHEDULE CHANGES COMING? GOLFWEEK's Lynch wrote specifics of the partnership agreement between the Tours "remain vague." Multiple sources said that it is "likely to eventually include some marrying of schedules, most likely in the period from September to November," after the conclusion of the FedExCup, with a number of "prestigious European events awarded FedExCup points to attract U.S.-based players." It also is believed a deal "would include a pipeline to allow European Tour members to play their way on to the more lucrative PGA Tour" (GOLFWEEK.com, 11/27).
STRONGER TOGETHER: Golf Channel's Paige Mackenzie asked, “How can the European Tour now leverage some of the strength of the PGA Tour? I think it would be naive to think it’s not coming about because of the pandemic and some of the financial hits, even though it has not been stated. I think for a lot of reasons this is a win/win across the board. I think it continues to strengthen and grow the PGA Tour and it also provides some leverage for the European Tour." Golf Channel’s Robert Damron wondered what the PGA Tour’s “long-term goal” was in this partnership because “all we know for sure is that the PGA Tour owns a minority stake in the media rights of the European Tour which I don't think is their long-term game. I don’t think they really care about just a little piece of the media" ("Morning Drive," Golf Channel, 11/30).
