By Frank Pingue
(Reuters) -The world of&nbsp;golf&nbsp;was left stunned on Tuesday as the&nbsp;PGA&nbsp;Tour, DP World&nbsp;Tour&nbsp;and&nbsp;rival Saudi-backed&nbsp;LIV&nbsp;circuit, who have been involved in a&nbsp;bitter&nbsp;fight that has&nbsp;split&nbsp;the sport,&nbsp;announced a&nbsp;shock&nbsp;agreement to merge&nbsp;and&nbsp;form one unified commercial entity.
Additionally, the organizations said in a joint news release they will work together to allow a process for&nbsp;LIV&nbsp;Golf&nbsp;players to reapply for membership on the&nbsp;PGA&nbsp;Tour&nbsp;and&nbsp;DP World&nbsp;Tour, formerly known as the European&nbsp;Tour, following the 2023 season.
The bombshell&nbsp;announcement was slammed by many&nbsp;PGA&nbsp;Tour&nbsp;players who were left in the dark about the&nbsp;merger&nbsp;and&nbsp;comes after a very public war of words between all the sides, mounting tensions&nbsp;and&nbsp;a&nbsp;bitter&nbsp;legal battle.
"After two years of disruption&nbsp;and&nbsp;distraction, this is a historic day for the game we all know&nbsp;and&nbsp;love," said&nbsp;PGA&nbsp;Tour&nbsp;Commissioner Jay Monahan, who had long been a vocal critic of&nbsp;LIV&nbsp;Golf.
"How did we go from a confrontation to now being partners? We just realized that we were better off together than we were fighting or apart," he told reporters following an "intense" meeting with&nbsp;Tour&nbsp;golfers to discuss details of the deal.
No details were given as to how the agreement will impact the current competitive&nbsp;golf&nbsp;landscape, including eligibility for this year's Ryder Cup, though the parties did say they will work in the coming months to finalise terms of the&nbsp;merger.
The&nbsp;LIV&nbsp;Golf&nbsp;series is bankrolled by the Saudi Arabia Public Investment Fund&nbsp;and&nbsp;critics have accused it of being a vehicle for the country to attempt to improve its reputation in the face of criticism of its human rights record.
Much of the backlash centres around the alleged involvement of the Saudi Arabian government in a multitude of human rights violations, including the murder of Washington Post journalist Jamal Khashoggi in 2018.
The deal&nbsp;announced on Tuesday is a binding framework agreement but the financial terms have not been hashed out yet, a source familiar with the matter said.
Michael Klein &amp; Co will conduct valuation work on&nbsp;LIV's assets&nbsp;and&nbsp;Allen &amp; Co will conduct valuation work on the&nbsp;PGA&nbsp;Tour's assets before the price at which the&nbsp;merger&nbsp;will happen gets determined, the source added.
A mechanism is included in the agreement to resolve any valuation disputes, the source said, without elaborating further.
EXCLUSIVE INVESTOR
The&nbsp;announcement of the&nbsp;merger&nbsp;includes an agreement to&nbsp;end&nbsp;all pending litigation between the participating parties.
Additionally, the Public Investment Fund (PIF) will make a capital investment into the new entity to facilitate its growth&nbsp;and&nbsp;success.
PIF, which owns more than 90% of&nbsp;LIV, plans to invest billions of dollars in order to have a sizeable minority stake in the combined company, a person familiar with the matter said.
"Today is a very exciting day for this special game&nbsp;and&nbsp;the people it touches around the world," said PIF Governor Yasir Al-Rumayyan.
"We are proud to partner with the&nbsp;PGA&nbsp;Tour&nbsp;to leverage PIF's unparalleled success&nbsp;and&nbsp;track record of unlocking value&nbsp;and&nbsp;bringing innovation&nbsp;and&nbsp;global best practices to business&nbsp;and&nbsp;sectors worldwide."
Monahan said the agreement was in the best interests of&nbsp;PGA&nbsp;Tour&nbsp;members, though he described a closed-door meeting with the players, where some called for his resignation, as "intense"&nbsp;and&nbsp;"heated." [nL1N37Y3B0]
"It puts us in a position of control&nbsp;and&nbsp;allows us to partner with the PIF in a constructive&nbsp;and&nbsp;productive way," said Monahan.
"I recognise that people are going to call me a hypocrite.
"Anytime I said anything, I said it with the information that I had at that moment ... I accept those criticisms. But circumstances do change."
LIV&nbsp;Golf, which features 54-hole events with no cuts instead of the traditional 72-hole format, launched in 2022&nbsp;and&nbsp;lured big-name players away from the rival circuits with staggering sums of prize money for every&nbsp;golfer.
The PIF will initially be the exclusive investor in the new entity&nbsp;and&nbsp;the board of directors will include Al-Rumayyan as chairman&nbsp;and&nbsp;the&nbsp;PGA&nbsp;Tour's Monahan as CEO.
After years of acrimony the deal seems to have come together quickly with little fuss&nbsp;and&nbsp;no leaks &ndash; despite it being one of the biggest commercial stories in the history of sport.
Al-Rumayyan told CNBC that he&nbsp;and&nbsp;Monahan met in London.
"We had a lunch followed by the next day a round of&nbsp;golf&nbsp;and&nbsp;then another lunch. We had discussions&nbsp;and&nbsp;we covered everything. I think it will be a matter of weeks (for a definitive agreement to be settled)."
Monahan added: "I give Yasir great credit for coming to the table, coming to discussions with an open heart&nbsp;and&nbsp;an open mind. We did the same&nbsp;and&nbsp;the game of&nbsp;golf&nbsp;is better for what we've done here today."
The&nbsp;PGA&nbsp;Tour, which is a non-profit organization, confirmed in July 2022 that the U.S. Justice Department was investigating whether it broke antitrust law in fighting off&nbsp;LIV.
The&nbsp;PGA&nbsp;had sought to fend&nbsp;off the competition by barring its players from participating in the breakaway circuit.
That said, one antitrust expert said that the&nbsp;PGA/LIV&nbsp;deal would be approved&nbsp;and&nbsp;two others said it was too close to call.
"This is entertainment. I think that would make it a less priority for the antitrust enforcers," said Seth Bloom of Bloom Strategic Counsel.
MIXED REACTION
Among the more popular players who made the move to&nbsp;LIV&nbsp;Golf&nbsp;are Hall of Fame&nbsp;golfer Phil Mickelson, former world number one Dustin Johnson, reigning&nbsp;PGA&nbsp;Championship winner Brooks Koepka&nbsp;and&nbsp;2022 British Open winner Cameron Smith.
"Awesome day today," tweeted Mickelson, whose public image took a hit in February 2022 when the author of an unauthorised biography on him released excerpts from the book in which he called the Saudis "scary" but said he was willing to look past their human rights records to gain leverage with the&nbsp;PGA&nbsp;Tour.
Some&nbsp;PGA&nbsp;Tour&nbsp;players expressed surprise at having not been informed of the agreement before its&nbsp;announcement.
"I love finding out morning news on Twitter," wrote two-times major champion Collin Morikawa.
Former U.S. President Donald Trump, who owns three courses that are part of&nbsp;LIV&nbsp;Golf's 14-event schedule in 2023, celebrated the deal in a Truth social post using all caps.
"Great news from&nbsp;LIV&nbsp;Golf. A big, beautiful,&nbsp;and&nbsp;glamorous deal for the wonderful world of&nbsp;golf. Congrats to all!!!"
Since its launch,&nbsp;LIV&nbsp;players have only competed alongside their former colleagues at the majors as those four blue-riband&nbsp;events on the&nbsp;golf&nbsp;calendar are not run by either the&nbsp;PGA&nbsp;Tour&nbsp;or DP World&nbsp;Tour&nbsp;but by independent institutions.
Many of those who accepted lucrative signing bonuses to join&nbsp;LIV&nbsp;Golf&nbsp;cited as their reason for making the leap a desire to play fewer events&nbsp;and&nbsp;spend&nbsp;more time with their families.
Advocacy groups 9/11 Families United&nbsp;and&nbsp;Democracy for the Arab World Now, which was founded by Khashoggi, were among the organizations that denounced the deal.
Fifteen of the 19 hijackers on Sept. 11, 2001 were from Saudi Arabia. However, the kingdom has long denied a role in the attacks on the Twin Towers, which killed nearly 3,000 people.
"Jay Monahan co-opted the 9/11 community last year in the&nbsp;PGA&nbsp;(Tour's) unequivocal agreement that the Saudi&nbsp;LIV&nbsp;project was nothing more than sportswashing of Saudi Arabia's reputation," 9/11 Families United said in a statement.
"Now the&nbsp;PGA&nbsp;and&nbsp;Monahan appear to have become just more paid Saudi shills, taking billions of dollars to cleanse the Saudi reputation so that Americans&nbsp;and&nbsp;the world will forget how the Kingdom spent their billions of dollars before 9/11 to fund terrorism, spread their vitriolic hatred,&nbsp;and&nbsp;finance al Qaeda&nbsp;and&nbsp;the murder of our loved ones."
(Reporting by Frank Pingue in Toronto; Additional reporting by Diane Bartz, Greg Roumeliotis, Jonathan Landay, Mitch Phillips&nbsp;and&nbsp;Rory Carroll; Editing by Alex Richardson, Christian Radnedge, Toby Davis&nbsp;and&nbsp;Peter Rutherford)

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