It is hard to compare the proposed merger of the PGA Tour and LIV Tour with a merger of, for example, two corporations under Delaware corporate law.

The PGA-LIV merger is more of a black box, to say the least.

In any merger you need a look under the hood of the constituent parties to see who needs to approve the deal for it to close.

For typical corporations, State law (often Delaware), a corporation’s charter, stockholder agreements and/or the merger agreement require a rigorous approval process to finalize a merger, including without limitation, a majority or supermajority of the board of directors, and a majority or supermajority of the stockholder voting power to vote yes.  The merger would also be subject to regulatory approvals, such as HSR (anti-trust) and/or CFIUS (foreign investment).

In terms of sequencing of a typical merger, the board of each merging party would approve a non-binding letter of intent that summarizes the material terms, and a public announcement would not occur until a definitive long-form merger agreement was approved by the board and signed by the CEOs.  In large deals this often happens before the stockholder vote and regulatory approvals, however, it is rare for any entity to make a public announcement of a merger before the board has received assurances from its top stockholders and support from the top publicly-facing executives of each corporation (usually the CEO, but in golf, there is the added wrinkle of publicly-facing star players who are critical to the success of the tour(s)).

In the PGA-LIV Merger, on first glance it seems the public announcement has come before the players half of the PGA Tour Policy Board (“PTPB”) was even aware of the real possibility of any deal. Comparing to a corporate merger, it appears the public announcement has essentially come before the board has even approved a non-binding letter of intent.

The PTPB has 11 members, including five from corporate America, five players, and the PGA of America president. As far as we know, those 5 players were not aware before the announcement was made, let alone knew or approved any of the details.

Therefore, the public announcement seems quite premature based on initial reports of the lack of details and support, and without more facts as to what the governing documents of the PGA Tour require in terms of board and constituent approvals. 

Note there is less of a concern on LIV’s approval process because LIV players and executives appear to squarely support this deal. Early reports and buzz on the PGA side, however, indicate a vast majority of the players are not supportive at this time after Tuesday’s player meeting with Commissioner Jay Monahan, acknowledging a huge part of the problem is the lack of transparency on the material terms and details of the merger — they do not even know what the deal they’re reading about on Twitter is going to look like.

The bottom line is that we golf fans have to question the process of approving the terms that we do know so far, the decision to publicly announce, and the leadership and decision making of the commissioner himself, Jay Monahan. And if Tiger, Rory, Scotty, Rahm, Spieth and JT, the PGA’s top tier of major-winning stars, were to all come out against the deal at some point in these negotiations, perhaps there’s a real possibility that the merger could be dead-on-arrival. And with it, Monahan’s tenure as commissioner, and the Tour’s existing governance structure, could go with it.