Breaking down the weekend coverage of PGA Tour/PIF deal; Charlie Baker has some tone of optimism on NIL standards and SBJ heads to NACDA
I will be at NACDA on Tuesday in Orlando. If you're in Orlando at that big convention, please let me know. I would love to say hi. And this is your morning Buzzcast for Monday, June 12. Good morning, I'm Abe Madkour. Hope everybody is doing well.
Let's start with more and more details emerged over the weekend about the historic deal between the PGA Tour and the Saudi Public Investment Fund. The Wall Street Journal had an insightful piece that outlined how PGA Tour commissioner Jay Monahan told tour employees on Thursday that his hand was almost forced, that the PGA Tour couldn't financially afford to keep fighting off LIV Golf and the money of Saudi Arabia. Monahan told his staff that the tour had spent close to $50 million in its legal fight, which was going to continue on and on, and that they had already dipped into its reserve fund and that Monaghan and others close to him felt that this was unsustainable.
The tour was also having difficulty getting tour sponsors to increase their investment in title sponsorship of their designated events, so that also factored into the financial puzzle.
Now, Monahan did tell staff that the PGA Tour waited to be in the strongest possible position to get a deal in place, and he said he, too, has concerns about the issues related to human rights and the Saudi government.
Now, the PGA Tour did push back on this reporting a bit, saying that to characterize the deal was made due to litigation costs and other use of reserves is an oversimplification. But this does align with what I keep hearing, that it was the cost of continued litigation that drove this deal from the side of the PGA Tour.
Meanwhile, PGA Tour policy board member Jimmy Dunne, who is an incredibly influential architect of this deal, said golfers who remain loyal to the PGA Tour will receive equity in the new for-profit enterprise being formed by the PGA Tour, the DP World Tour and the Saudi PIF. Dunne said players would receive equity in the new company based on a yet-to-be determined formula.
Dunne also said that Jay Monahan would have oversight of the LIV Golf league under the new deal, giving him the authority to determine whether LIV will continue beyond this season. That's a little different than what has been reported as there's been mixed reporting on if LIV Golf will be back in 2024.
Meanwhile, Dunne added that current PGA Tour members and administrators would determine potential punishment for players who left for LIV Golf, but want to apply for reinstatement to the tour. Sources said the punishment of those players would be considered on a case-by-case basis.
If you didn't read it, the must-read over the weekend was the New York Times taking a deep look at seven weeks of clandestine negotiations under the headline Secrecy, Cigars and a Venetian Wedding: How the PGA Tour Made a Deal with Saudi Arabia. It's a good read. The account is based on interviews with nine people with knowledge of the negotiations.
A few of the highlights is that a WhatsApp message on April 18th from Jimmy Dunne to Yasir Al-Rumayyan started the conversation. Meanwhile, they met a week later or less than a week later in London with PGA Tour board chair Ed Herlihy, another very influential executive. They had dinner, they had cigars, they played golf the next day.
Meanwhile, Jay Monahan first met with Al-Rumayyan in Venice in mid-May at a wedding of the daughter of Lawrence Stroll, who is involved in Formula One. Lauren Stroll is, at least. Meanwhile, Jay Monahan first met Al-Rumayyan in Venice in mid-May where Al-Rumayyan was attending a wedding. A private session there lasted about two hours. Then in the early hours of May 30th, after a long bargaining session, a dozen or so PGA Tour people gathered at a Four Seasons hotel to sign and toast the deal. So some interesting details and some color to the seven weeks of negotiations. And that's in Sunday's New York Times, a piece well-worth your time.
Let's move on. We have another American-based owner of a global soccer franchise as 49ers Enterprises, the investment fund owned by the York family, has completed the purchase of English Soccer Club Leeds United. Now Leeds was in the Premier League, but was relegated this year to the second tier. 49ers Enterprises initially purchased a piece of Leeds in 2018 and, over the past five years, it kept increasing its ownership stake of the team.
Now it has complete control. Certainly 49ers Enterprises couldn't have been pleased about relegation and that has reportedly dramatically changed the finances around the agreement. The relegation reportedly dropped the club's valuation from around 500 million to closer to about 215 million.
Now, 49ers Enterprises President Paraag Marathe, who is a SBJ 40-under-40 honoree, becomes the club chairman and will be the key decision-maker at Leeds and they'll be looking at hiring a new manager and making changes to the roster. So now this becomes the key focus of Paraag Marathe and others at 49ers Enterprises as they take over Leeds United.
I met a top college basketball coach and administrator from a big school on Friday, and all this leader could talk about was name, image, and likeness and how much of his time it takes up and how frustrating the current system is for him and his colleagues. He is clearly hoping for some changes and some consistent standards.
Well, NCAA president Charlie Baker wants some uniformity, too, and he's saying that it could come as soon as this year, at least that's what he's hoping. He is pushing hard for federal legislation addressing name, image, and likeness and Baker feels if it doesn't get done in 2023, it won't get done for a while because he feels nothing will get passed during the 2024 election year.
But he is a bit optimistic. He notes one bill has already been introduced and at least two more bills are in the process of being introduced. Baker said the NCAA wants a name, image, and likeness bill to include a registry of deal terms, a certification of agents, and the mandate of a uniform standard contract for all deals. He said that the NCAA will work on this issue even if Congress doesn't act.
Meanwhile, I've said a few times on the Buzzcast that Charlie Baker feels the NCAA is not fully optimizing its commercial revenue opportunities and he admitted that. He said that sports betting is a major opportunity for the NCAA and he added that the NCAA dramatically underperforms across a number of revenue opportunities. That is what he and his leadership team are focusing on over the next four to six months. I would not be surprised to see Charlie Baker bring in some heavy-hitters on the revenue side.
I always enjoy the Women's College World Series and Oklahoma had a historic three-peat. And while it wasn't the strongest television viewership in event history, it still delivered some strong numbers. SPJ's Austin Karp reported that the two game final on ESPN averaged 1.59 million viewers, that's up slightly from 1.58 million viewers for last year's Oklahoma's sweep of Texas. Now, Oklahoma-Florida State is down from the 1.84 million viewers for the same matchup in 2021.
Now, the clincher on Thursday night delivered 1.86 million viewers, and that's a healthy number and it proves that women's sports can draw eyeballs. For context, that event was up against the Stanley Cup Final game three on TNT and TBS and that game three drew 2.69 million viewers. So you see the comparison, the NHL Stanley Cup Final game three bringing in about 600,000 more viewers than the Women's College World Series clincher. Meanwhile, for the 14 games of the Women's College World Series across ABC, ESPN, and ESPN2, the event average just under 1.1 million viewers, and that was up 6% from last year.
Finally, I did mention that I'll be at NACDA on Tuesday in Orlando, and for those of you that don't know, that's the National Association of Collegiate Director of Athletics Convention. It's a great event, a few thousand leaders in college sports and related business.
SBJ is leading a track discussion on Tuesday called SBJ at NACDA, and we will have four speakers that will sit with me and my colleague John Ourand to discuss some issues around sports business. We'll have Matthew Jafarian, who is executive vice president of business strategy at the Heat. He'll talk about utilizing data. We'll have Alex Martins, CEO of the Orlando Magic. He'll talk about leading a modern-day professional sports team. We'll have Donna Orender, CEO of Orender Unlimited, talking about growing your fan base and reaching female fans, and will also speak to the PGA Tours vice president of gaming Scott Warfield, who will talk about lessons learned from legalized sports betting. So if you're at NACDA, I certainly hope you'll sit in on these sessions and say hello.
So that is your Morning Buzzcast for Monday, June 12. I'm Abe Madkour. Stay healthy, be good to each other. David Albright will bring you the Buzzcast on Tuesday. I'll speak to you again on Wednesday.