- Alistair Tait
Lingering strategic alliance questions
Listening to sports administrators deliver important announcements is a bit like looking at the Frequently Asked Questions sections on most websites – they never have answers to questions you actually want answered. It was a bit like that with Keith Pelley when the European Tour’s chief executive held a virtual press conference to announce the merger, sorry, strategic alliance between the European and the PGA Tours.
So here are some lingering questions from the bomb-shell announcement that seems set to shake up world golf.
How long is this strategic alliance supposed to last? One year? Five years? 10 years? In perpetuity? Or just long enough until the backers of the Premier Golf League get fed up and decide to take their millions and invest in another sport? Pelley said he’d been talking to PGA Tour counterpart Jay Monahan for four and half years but the deal was done in 72 hours. Did the two write down the length of this alliance when they wrote the other details on the back of the fag (cigarette, for my non-British readers) packet?
I know I’m shouting into the wind here, but just how much did the PGA Tour pay to become a partner in European Tour productions, and what percentage of ETP does it now own? It must have been a fair whack if Monahan has been given, sorry, invited onto the European Tour board. We might never know, which Pelley pretty much stated when he said:
“The financial details are all governed by an NDA and in private, so I can't disclose that.”
Handy those NDAs, aren’t they? But bloody frustrating!
Why no reciprocal board arrangement?
Pelley said Monahan was on the Euro board and that he hadn’t been invited onto the PGA Tour board because...
“...we haven't taken an investment in them. They have a monetary investment in our business.”
I understand it's common in business for someone to get a seat on a company's board when they invest a ton of money, but surely that gives the PGA Tour a huge advantage in this merger, er, alliance? Monahan will get to see highly confidential European Tour financial information, but the European Tour will be in the dark on the state of the PGA Tour. That doesn’t sound like an equal partnership to me.
The Ryder Cup
Pelley wouldn’t be drawn on the future of the Ryder Cup but it surely has to be a huge part of any merger – damn it! – alliance between the two bodies. Along with TV contracts, it’s a huge revenue source for the European Tour. Pelley said:
“I don't believe that in any such way, genuinely don't think that today's announcement is relevant to The Ryder Cup.”
Notice the not so definitive “I don’t believe” bit of that quote. Doesn’t sound so cast iron to me. Surely the two tours have talked about the most important team match in golf during discussions?
Future revenue share
Pelley said the two bodies would be ….
“… setting up work streams to go deeper into areas such as scheduling, best practice and commercial opportunities.”
Will the profits from those commercial opportunities be 50/50, 60/40, 70/30? Surely if this is a partnership then revenues would be shared equally? I suspect they’ll be governed by those damn NDA things. However, that information would tell us who the stronger partner is and – call me a cynic – I don’t think it’ll be the European Tour.
You have my phone number and email address, Keith. I look forward to your answers……
#JustSaying: “People used to ask me what my five-year plan was for the Tour. I used to say we don’t have one – we’re too busy trying to get sponsors for tournaments.” Former European Tour Chief Executive Ken Schofield