European Tour link up with PGA Tour is not a merger, insists Keith Pelley

Chief executive Keith Pelley has slammed talk of a new “strategic alliance” between the European Tour and the PGA Tour being a merger due to financial reasons.

European Tour chief executive Keith Pelley is bulish about the circuit's link up with the PGA Tour. Picture: Getty Images

Under the agreement, Pelley and PGA Tour commissioner Jay Monahan will explore all facets of collaboration, working together on strategic commercial opportunities including collaborating on global media rights in certain territories.

This will come through part of the agreement which sees the PGA Tour acquire a minority investment stake in European Tour Productions (ETP), the European Tour’s media production company, which produces and distributes content internationally.

The tours will also work in partnership on a number of other areas including global scheduling, prize funds and playing opportunities for the respective memberships.

One element of the partnership will see Monahan take a seat on the European Tour board alongside the likes of recently-retired Aberdeen Standard Investments chairman Martin Gilbert.

“This is a momentous occasion as it is a significant new era for global golf,” Pelley told golf writers in a teleconference. “The PGA Tour moves from a competitor to a partner.

“This is not a merger. It would only happen if the tour had financial difficulties and there were significant benefits for the membership.”

Responding to the initial reaction on social media being that a takeover by the PGA Tour seemed inevitable, he added: “I find that staggering and somewhat tiring, a story perpetuates itself with no facts. Nay-sayers talking about financials that are just not true.

“If this was a financial situation, we’d have done far more than a strategic alliance with a minority investment. Categorically, we are not in financial difficulties, that is simply wrong, we are in robust financial health with a strong balance sheet, strongest ever, and a very strong network of partners.

“We created 15 tournaments from scratch since the Covid-19 lockdown while spending £3 million funding a health strategy and on Covid testing - I don’t think that it would be possible for a business that did not have robust finances.

“Let me be clear: we did not have to enter into this agreement or any other. We chose to because it’s in the best interest of both tours, for our players, for both golf fans and for the global pro game.

“If this was a merger and pathway to one, it would have to have significant benefits for our members because you would need 75 per cent of the membership voting in consensus. This is day one of a partnership and we want to build and grow this relationship.”

Pelley revealed that the money men behind the proposed breakaway Premier Golf League had made a “very compelling offer” to buy a stake in the European Tour and wanted to “take it to another level but in a different direction”.

He also revealed that a number of other private equity companies had expressed interest in becoming “investment partners” in recent years, but said he is confident this development is the right one, not just for European golf but the game globally.

“Jay and I have been talking about working more closely for five and a half years,” he said. “I always said golf is fractured, too fractured, this was a moment in time when everything aligned.

“Covid has brought challenges but also opportunities. We’ve spent more time talking and less time travelling, and we started sharing best practices, or chief medical officers have been in constant dialogue and we started having conversations on how we should work together.

“This is a natural extension of that conversation. We’re in this game together. Covid showed we shouldn’t be competing against each other, we should be working together and aggregating our skills, best practices and commercial streams. What we can do together gets me really excited. This alliance is the logical next step in a move toward a global golf game.”

Pelley said that co-sanctioned events are a “realistic possibility” but they are only “conceptual” at this stage.As for the Ryder Cup, the Canadian is adamant that it will not be diluted in the slightest when the teams lock horns 12 months later than scheduled at Whistling Straits next September.

“Today’s announcement has no relevance to the Ryder Cup in any way - it does not change it one way,” he said of the most-watched golf event by far.

As for Monahan’s seat on the board of the Wentworth-based organisation, he said: “Jay is a remarkable visionary, a commissioner’s player, a terrific leader.

“He wants to come on the board and that is an unbelievable signal for European golf. I cannot wait to tap into each other’s eco-systems.”

Had there been talk of a reciprocal agreement with Pelley securing a seat on the board of the Florida-based organisation? “No, because we have not made an investment in them whereas they have a monetary investment in our business,” he said.

"This is great for the European Tour. I guess time will tell, but the glass is definitely half full and I believe we will look back at this day and this partnership as something great that happened in world golf. It is going to be a great ride.”

Monahan said he was “thrilled” with the announcement, adding: “This further strengthens our partnership with the European Tour, and we look forward to working together for the benefit of the men’s professional game and for golf fans around the world.”

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