Wachtell, McDermott, Hogan, Shearman Advise on PGA Tour Deal (1)

Wachtell Lipton Rosen & Katz and at least four other law firms advised on the PGA Tour’s deal with Strategic Sports Group that will infuse up to $3 billion into a new for-profit venture that gives tour members equity in the business.

Wachtell advised the PGA Tour, according to a statement announcing the deal. Wachtell partner Ed Herlihy, who is chairman of the PGA Tour’s policy board, previously advised on the golf tour’s agreement with LIV Golf.

McDermott Will & Emery served as tax counsel to the PGA Tour on the deal. Hogan Lovells and Shearman & Sterling advised Strategic Sports Group, which is a consortium of American sports team owners led by Fenway Sports Group. King & Spalding advised Arthur Blank, the billionaire Atlanta Falcons owner who’s a member of the consortium.

The deal ushers in a new business model for the longtime non-profit PGA Tour and is a response to players including Brooks Koepka, Jon Rahm and Phil Mickelson leaving to play for Saudi Arabia-funded LIV Golf.

The deal will allow nearly 200 PGA Tour members to become equity holders in the new company, the tour said. The players would collectively access over $1.5 billion in equity through grants that will vest over time and will be dispensed based on career accomplishments and recent achievements, the tour said.

The deal announced Wednesday allows Saudi Arabia’s Public Investment Fund, which backs LIV Golf, to co-invest in PGA Tour Enterprises, the new business, subject to regulatory approvals, the tour said. The PGA Tour last summer announced its intention to partner with LIV Golf.

Strategic Sports Group will invest an initial $1.5 billion that can grow to as much as $3 billion, the tour said. The consortium includes a list of heavyweight sports owners, including Steven A. Cohen, owner of the New York Mets, Boston Celtics majority owner Wyc Grousbeck, and former Milwaukee Bucks owner Marc Lasry.

Wachtell’s team was led by corporate partner Jacob Kling and associate Matthew Carpenter, the firm said in an email. The deal team included 14 lawyers from the firm’s corporate, tax, executive compensation and benefits, finance, intellectual property and litigation practices.

The Shearman team was led by New York-based mergers and acquisitions partners Creighton Condon and Roger Morscheiser, along with associate Christopher Glenn, according to the firm.

Shearman & Sterling has represented Fenway Sports Group on numerous deals, including its acquisition in 2021 of the NHL’s Pittsburgh Penguins and its extended partnership with LeBron James announced last year.

Hogan Lovells’ key partners involved in the deal included Matt Eisler, Steve Argeris, Russell Hedman, and Mark Weinstein, a firm spokeswoman said.

Eisler is a Denver-based partner with a well-regarded sports transactions practice. New York-based Argeris, a one-time sports reporter, formerly served as vice president and general counsel with Carolina Panthers owner David Tepper’s Tepper Sports & Entertainment. Hedman is a Denver-based M&A lawyer with sports and private equity experience. Weinstein is a New York tax partner.

The King & Spalding team advising Blank included corporate partners Justin King and Will Jordan and associates Andrea Demick and Archie Wilson. Partner John Sweet advised on tax matters.