Revisiting the PGA Tour-DP World Tour alliance with Paul McGinley: ‘Tell me how that’s a bad deal’

At the BMW International in early July, Sergio Garcia reportedly went on an epic locker-room rant where he said, among other things, that the DP World Tour was in a world of hurt – only he used some more choice four-letter words – and that his fellow competitors should have taken the money from LIV Golf when they had a chance.

Several months later, the DP World Tour is wrapping up a season in Dubai in the United Arab Emirates in which it played for record purses and strengthened its strategic alliance with the PGA Tour and in June agreed to a framework agreement with the Tour and Saudi Arabia’s Public Investment Fund. Much remains to see how things will play out but longtime DP World Tour player, board member, 2014 European Ryder Cup captain and Golf Channel/Sky TV commentator is tired of hearing critics trash the deal.

“When you’re the little guy against an absolute giant that the PGA Tour is the odds are stacked against you,” McGinley said. “When a new titan comes on the pitch in terms of money like the Saudis and you’ve got one on each side and you’re the little guy in the middle you’re in a very precarious position.”

Europe players lift their captain Paul McGinley as he holds the trophy after winning the 2014 Ryder Cup.

The first decision the DP Tour faced goes back to the days of the PGL and the original alliance between the PGA Tour and DP World Tour, which was announced nearly two years ago on Nov. 27, 2021, and for intents and purposes thwarted Andy Gardiner and his brainchild of the upstart PGL.

“Jay came in heavy,” McGinley told author Alan Shipnuck in his new book Liv and Let Die. “He showed us the color of his eyes.”

An unnamed PGA investor declared: “Monahan basically threatened to take all of their sponsors and said he would pump money into the purses of Tour events played opposite the Euro Tour’s flagship events so all the top Europeans stayed in the States. He might as well have parked tanks outside of Keithy Pelley’s office.”

According to Shipnuck, the European Tour had two top executives make their cases for the better deal, with Guy Kinnings advocating for the alliance with the PGA Tour and Rufus Hack pushing for the PGL merger. Shipnuck writes: “Monahan’s offer would give the European Tour a needed cash infusion without it having to sell its soul, while allowing the PGA Tour to thwart a formidable competitor for a reasonable price, part of the deal was that the European Tour would be barred from partnering with or supporting any other tour.”

The DP World Tour and PGA Tour extending its relationship, especially in terms of international events, was a critical decision in reshaping the trajectory of the tour.

“We had a big question to make: if we do nothing we’re going to slowly die, or we align ourselves with one of the titans,” McGinley mused. “Any venture capitalist will tell you it’s not just about money, particularly when you’re managing a members’ organization like we are. We had to balance up not only the financials but also the security and future of the European Tour. The Saudis were new on the pitch and it was difficult to assess how committed they were going to be long term and could they just disappear as quickly as they arrived on the scene. The chances of that were realistically strong.

“The idea of us aligning with the Saudis would’ve been a massive risk to our members because A, we would’ve pissed off the PGA Tour massively. They would’ve never done any business with us again; in fact, they would’ve gone out of their way to bury us. And B, if after a couple of years, the Saudis decided we’re losing money on golf, we’re out, we would’ve been at the mercy of those people and we would’ve been in a vulnerable position. I think we made a savvy decision and the path of least resistance and least risk to align with the PGA Tour. That was a very strong deal for us.

“The odds were heavily in our favor and we hitched our wagon and we did so knowing that the days of us going toe to toe with the PGA Tour are gone.”

To hear McGinley tell it, the PGA Tour’s business model has accelerated in the last five years, particularly because of TV rights. As a result, he’s convinced the European circuit never would compete with the PGA Tour again as it once did in its heyday.

Paul McGinley guides Europe to a Ryder Cup victory in 2014.
Paul McGinley guides Europe to a Ryder Cup victory in 2014.

Paul McGinley guides Europe to a Ryder Cup victory in 2014.

“These misty-eyed people who think, oh, the days of Seve and Langer, that’s bullshit, because the commercial model has exploded in the U.S., and hasn’t and it won’t in Europe,” McGinley said. “We had to deal with the dynamics that were in play and we’re at mercy of people being critical of it but they’re not being critical based on reality.”

Most of the critics ignore the fact that the board of the European Tour is incredibly strong.

Martin Gilbert, founder of Aberdeen Asset Management, one of the biggest funds in the world, is on the policy board and his world is assessing risk.

“Do you think when it came down to the nitty gritty that David Howell, Thomas Bjorn and myself were front and center in all of this? Absolutely not. We had experts in there on the board doing the deal,” he said. “We were well advised from the business point of view. It was a well-considered and thought-through deal that we did with the PGA Tour.”

McGinley is convinced the DP World Tour is in a stronger position and while the circuit’s fortunes still may be evolving, he argues that the European Tour weighed its options and found the safety of the PGA Tour to be a winning combination.

“The good news is by aligning with America we did a good financial deal and all our players committed to playing four events outside of the majors and the world events and continue to come back and play European Tour events,” McGinley said. “We’re playing for record prize funds this year, we played for record prize funds last year, and that’s guaranteed for the next 13 years. Tell me how that’s a bad deal for the European Tour. And we’ve minimized our risk. The PGA Tour isn’t going away in the next three years but potentially the Saudis could. We couldn’t take that risk. That would not have been proper due diligence for us as a members’ organization that represents 500 people.”

Story originally appeared on GolfWeek