Cut Line: Model local rule, tax-exempt status and playoff spots up for grabs
In this week’s edition, a memo in nine parts, two proposed bills and an ultimatum shouted into a void:
Jason Gore. As PGA Tour promotions go, this one was significant. In commissioner Jay Monahan’s memo to players that was sent on Wednesday – which covered nine, wide-ranging topics – the most easily digestible item was Gore’s promotion to executive vice president-chief player officer, a newly created position.
The lingering distrust among players toward the Tour and Monahan made Gore’s promotion an easy choice given his status as one of the game’s most likeable figures.
Before Gore turned administrator, he was a two-time Tour winner and enjoyed one of the game’s most magical summers in 2005 when the then-Korn Ferry Tour player began the final round of the U.S. Open tied for second. Although he struggled on that Sunday at Pinehurst, he followed that performance with three victories on the secondary circuit to earn an immediate promotion to the PGA Tour and a few weeks later his first Tour title.
In the current context, Gore is perfect for the job of go-between for two simple reasons – players like him and, more importantly, they trust him.
Playoff push. While this week’s avalanche of off-course news has overshadowed the actual golf, it’s worth recognizing how the circuit’s revamped designated schedule has altered the late-season landscape.
The shift to the top 70 for the post-season and how that’ll impact players next year has transformed the final two weeks of the regular season into a much-more compelling product, with the likes of Kevin Streelman, who at 120th on the season-long points list is on the outside of the playoff bubble, producing a classic late-season push.
Streelman followed an opening 64 at the 3M Open with a 68 Friday for the early lead and was projected to move to 52nd on the points list when he completed his round. It remains to be seen how the designated concept will change player fortunes, but in the short term it’s made an otherwise quiet part of the season much more interesting.
Made Cut-Did Not Finish (MDF)
One voice. The eighth of the nine bullet points in Wednesday’s memo was probably the most significant for players, at least in the short term. As anticipated, the Tour officially pushed back on the proposed Modified Local Rule that would limit the distance of golf balls at the elite level.
“There is widespread and significant belief the proposed Modified Local Rule is not warranted and is not in the best interest of the game,” Monahan wrote. “We have notified the USGA and the R&A that while the PGA Tour is committed to collaborating with them – and all industry partners – to arrive at a solution that will best serve our players, our fans and the game at all levels, we are not able to support the MLR as proposed.”
While finding consensus in professional golf is virtually impossible, the one thing players seemed to agree on is their collective distaste for the MLR and the Tour’s response, while predictable, sends a clear message.
Special advisor. Along with Gore’s promotion and an update on the circuit’s plan to replace Randall Stephenson, who resigned his position on the Tour’s policy board due to “serious concerns” about the framework agreement with the Public Investment Fund of Saudi Arabia, Monahan’s memo also revealed the creation of a special advisor for the player directors on the policy board and the Player Advisory Council.
Colin Neville, a partner at Raine Group who leads the firm’s sports practice, was named the special assistant.
“We recognize the benefit that a third-party advisor would bring to help move all deal conversations forward with utmost efficiency and confidence,” Monahan wrote.
Randall Stephenson has resigned his position on the PGA Tour’s policy board due to “serious concerns” about the circuit’s recent “framework” agreement with the Public Investment Fund of Saudi Arabia. The Tour sent the following memo to players: pic.twitter.com/Xdjjqbwc8L— Rex Hoggard (@RexHoggardGC) July 9, 2023
While the concept of a third-party voice is understandable given the complexity of a potential definitive agreement with the PIF, most players have never heard of Neville, although according to multiple sources he was in the room last year at the BMW Championship when the designated-event concept was being formulated. According to various reports, the Raine Group is a private equity firm that fronted the proposed Premier Golf League, which was the precursor to LIV Golf.
The current phase of negotiations between the Tour and PIF will undoubtedly be complicated and nuanced, but as the last two months has proven, without real transparency the opposition will only grow.
Capitol Hill. In case Tour officials thought the senate hearing earlier this month would slow lawmaker scrutiny of the “framework” agreement, this week showed that the pressure will continue.
Sen. Ron Wyden (D-Ore.), the chair of the Senate’s finance committee, introduced two bills Wednesday, the Sports League Tax-Exempt Status Limitation Act and the Ending Tax Breaks for Massive Sovereign Wealth Funds Act.
The Sports League Tax-Exempt Status Limitation Act would adjust the current tax code to exclude sports organizations with assets exceeding $500 million and the Ending Tax Breaks for Massive Sovereign Wealth Funds Act would deny that benefit to funds belonging to countries that have more than $100 billion invested globally.
A day later, Sen. Richard Blumenthal, D-Conn., sent a letter to PIF governor Yasir Al-Rumayyan requesting he testify before the permanent subcommittee on investigations. Both Al-Rumayyan and LIV Golf CEO Greg Norman declined to testify at this month’s hearing because of “scheduling conflicts.”
Given how vigorously the PIF fought any discovery in its now-dismissed anti-trust lawsuit with the Tour, the chances of Al-Rumayyan testifying seem incredibly low. The two proposed bills, however, have the potential to create an entirely new set of problems for the Tour.
Leadership. Monahan returned to work two weeks ago following a “medical situation” and according to his memo to players he’s “fully recovered and feeling stronger than ever, committed to representing the best interests of the PGA Tour and our members.”
The commissioner, whose leadership style has always been an impressive balance of transformational and autocratic, knows better than anyone that his job has only become more complicated since he took his leave and this week’s memo and his plan to be at next week’s Wyndham Championship and the first playoff event is a good first step. Building back player trust, however, will not be easy or quick.
Appointing Gore to be the intermediary between the Tour and players made sense, but Monahan’s job is to be the voice and the face of the Tour, not Gore or a special advisor.