Changing times and weakened rivals make PGA question generosity to DP World Tour | Golf

What is the price of a strategic alliance? The golf world may be about to find out as the PGA Tour considers its partnership with the DP World Tour.

A little-known element of the updated agreement between the PGA and DP World Tours from 2022 – at a time when LIV disruption was in full swing – concerns a break clause. While the contract theoretically runs through 2035, the strategic alliance may end in 2027. There is currently no strong feeling that the deal will be scaled back, but it is clear that the PGA Tour wants at least a renegotiation before accepting its extension option.

Each year, the PGA Tour supports the awards funds of the DP World, formerly the European Tour. The fee is listed in the European Tour Group’s accounts as an “annual investment payment”. In 2024, it will increase by almost 10%, to £21.5 million. This figure is likely to increase again in 2025.

The mistake would be to view this as mere coinage for the PGA Tour; the grant is turning heads within an organization that now must answer to private capital and the Strategic Sports Group. Each line of the income statement is scrutinized. Frankly, there are serious, substantive discussions about whether supporting stock exchanges in Europe makes the same business or sporting sense as when LIV had heavy intentions.

The PGA Tour declined to comment on its position. A source close to the situation said: “The PGA Tour began discussions with the DP World Tour on January 26 to review and expand the long-standing partnership. Much has changed since these agreements were first negotiated, including new leadership within the PGA Tour, new investment partners and a new player equity program that gives members a major stake and a meaningful voice in how the tour is run.” The key term here is “revise.”

Elite golf in its current form seems unsustainable. Players have never had it so good. Some in positions of power within the PGA Tour believe the DP World Tour brings in far too much prize money, which has ramifications on this side of the Atlantic. This point is not unreasonable, although DP World Tour may respond that holding players back while LIV hovers has a cost. Total DP World Tour prize money in 2026 stands at a record $157.5 million (£117.35 million), up from $153 million a year earlier.

The Tour has generally benefited enormously from home Ryder Cup hosts, but increased investment and associated costs have diminished the premium. The terms of Sky Sports’ latest deal for European golf are unknown but, with no competition with the broadcaster, a bidding war never increased rights revenue. Europe has lost a number of top sponsors, notably to LIV. Ten players can move from the DP World Tour to the PGA Tour each year, which has always felt like a strange acceptance of talent drain.

The PGA Tour is emboldened. LIV is no longer seen as a threat. The return of Brooks Koepka and, soon, Patrick Reed from the Saudi-backed tour has fueled the sense of shifting dynamics. Brian Rolapp, chief executive of the PGA Tour, hopes to oversee a significant schedule change that will essentially streamline the tournament scene. The PGA Tour’s economic model, considered outdated, will soon be overhauled. Rolapp’s challenge is to convince the base of the usefulness of this initiative.

The fact that the PGA Tour made the Players Championship a major tournament demonstrates the extent to which confidence has replaced nervousness inside a body that has been shaken by the emergence of LIV. Rolapp’s news conference Wednesday will take place in front of hundreds of guests at the PGA Tour’s world headquarters rather than a media center. This seems self-aggrandizing, but is an indicator of current confidence.

Europe and strategic alliance could be a theme as Rolapp addresses his audience. It certainly should be. Pointing out that failure to reach a compromise on the precise form the basis of the project should take would bring Saudi Arabia back into the equation is not a big step forward. Rolapp and the PGA Tour will know this, so their call on the post-2027 status is fascinating.

LIV and its backers will follow this scenario with great interest. They need an acceptable exit route from a tour that generates no interest and eats up dollars. If the PGA and DP World Tours cannot find a mutually agreeable path forward, Saudi Arabia and Europe could partner to establish a more global institution. European golf and the Saudis have already gotten along well. A possibility worth risking for the PGA Tour? Perhaps, although his preference is clearly to maintain a relationship with Europe.

“I’m still hopeful that the DP World Tour will be a viable, strong tour,” Justin Rose said. “It has a great history. The PGA Tour is obviously kind of supporting the European Tour right now.” Indeed, it is. And whoever pays for the sound sets the tone.