Newly obtained document details framework agreement between PGA Tour and LIV Golf

By Jill Martin, Zayn Nabbi and George Ramsay, CNN

(CNN) — On June 6, a shocking announcement was made by the PGA Tour sending reverberations around the golf world.

The organization, along with Saudi’s Arabia’s Public Investment Fund (PIF) and the DP World Tour (formerly known as the European Tour), had signed an agreement to combine PIF’s golf-related commercial businesses and rights – including the Saudi-backed LIV Golf series – with the commercial businesses and rights of the PGA Tour and DP World Tour into a new, collectively owned, for-profit entity.

On Monday, multiple news outlets started to circulate the framework agreement that had been quietly made by those groups. CNN has since obtained a copy of the framework agreement.

The document was sent to Congress on Monday, according to a source with knowledge of the framework agreement.

The framework agreement states the three groups will establish a for-profit Limited Liability Company (LLC), referenced in the agreement as “NewCo.”

The document says the PGA Tour and DP World Tour will each “contribute commercial businesses/rights,” while the PIF “will contribute their golf-related investments and assets, including LIV, to NewCo along with a cash investment, in exchange for the issuance to PIF of an equity ownership interest in NewCo to a fair value mutually agreed by the parties.”

PIF is Saudi Arabia’s sovereign wealth fund. Chaired by Crown Prince Mohammed bin Salman, it has splashed billions of dollars on investments at home and overseas.

The three golf tours will continue to co-exist, according to the agreement, while “NewCo will undertake a full and objective empirical data-driven evaluation of LIV and its prospects and potential and will make a good faith assessment of the benefits of team golf in general and PIF, the PGA TOUR and the DP World Tour will work together in an effort to determine how best to integrate team golf into PGA TOUR and DP World Tour events going forward.”

The agreement also references the Official World Golf Ranking (OWGR), which currently doesn’t award rankings points for LIV Golf events. The agreement states that the parties “will cooperate in good faith and use best efforts to secure OWGR recognition for LIV events and players under OWGR’s criterial for considering LIV’s pending application.”

As CNN previously reported when the agreement was announced, the framework agreement ended litigation between LIV Golf and the PGA Tour and DP World Tour.

When contacted by CNN on Tuesday, the PGA Tour said in a statement: “The framework outlines a future for professional golf under the PGA TOUR’s leadership that benefits players, fans and the sport.

“Following the recent resolution of litigation, we’re working towards a definitive agreement. Any potential agreement resulting from these negotiations will have to be approved by the full board of the PGA TOUR, including our player directors.”

The framework agreement document is five pages long and is dated May 30, a week before the deal was announced publicly, and was signed by PGA Tour commissioner Jay Monahan, PIF Governor Yasir Al-Rumayyan and DP World Tour CEO Keith Pelley.

Reaction to the June 6 announcement was swift, including from the US government.

The US Department of Justice is to investigate the planned partnership between the PGA Tour and the PIF over antitrust concerns, according to the Wall Street Journal, citing people familiar with the matter.

Additionally, the US Senate Permanent Subcommittee on Investigations announced last week that it will hold a hearing on July 11 to examine the partnership. Lawmakers are inviting Monahan, Al-Rumayyan and LIV Golf CEO Greg Norman to testify at the hearing.

The PGA Tour has reassured its players that they will have a voice in the new partnership with LIV Golf, a statement issued by the policy board confirmed Tuesday.

The statement comes after the board, which includes players Patrick Cantlay, Rory McIlroy, Charley Hoffman, Peter Malnati and Webb Simpson, met Tuesday ahead of the Rocket Mortgage Classic in Detroit.

“Entering the Framework Agreement put an end to costly litigation. Management, with input from our Player Directors, has now begun a new phase of negotiations to determine if the TOUR can reach a definitive agreement that is in the best interests of our players, fans, sponsors, partners, and the game overall,” the statement said.

“That was the focus of our productive Policy Board meeting this afternoon, with valuable and crucial input and perspective from the membership through our Player Directors.

“If future negotiations lead to a proposed agreement, it would need approval by the TOUR’s Policy Board, which includes Player Directors. In the meantime, we are all committed to the safeguards in the Framework Agreement that ensure the PGA TOUR would lead and maintain control of this potential new commercial entity. We are confident that the TOUR’s mission will continue to focus on showcasing the game of golf while serving local communities.”

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CNN’s Zayn Nabbi contributed to reporting.