Shifting alliances in the golf industry: The PGA Tour, the European Tour, and the Saudi Public Investment Fund (A)

Learning Objective

The corresponding teaching note provides details about how to lead the case discussion. This is a decision-making case. First, students are asked to put themselves in the position of PGA Tour's and European Tour commissioners and assess the pros and cons of allying with their main competitor. They are also asked to assess the viability of an alternative proposal: a multi-billion offer to partner with a wealthy actor that suffers from a tarnished reputation. Second, students are asked to decide when and how to present such proposal to the Board of Directors, as well as to reflect on how that Board of Directors should decide in the best interest of its stakeholders. Third, students are asked to reflect upon an unexpected turn of events, whereby the CEO and Board of Directors of the PGA TOUR, to the surprise of all its stakeholders, decide to join forces with the actor they had been disowning for moral reasons the last two years.

This is one of the first cases to describe the corporate risks of being associated with sportswashing. Sportswashing describes the phenomenon whereby corporations with tarnished reputation (e.g., high polluters) or governments with human rights issues try to ally with sports organizations to improve their reputation. This phenomenon has received extensive newspaper coverage since the late 2010s:

1. the presence of sponsors with shady reputation injecting money into mainstream sports such as Formula 1 (Richards, 2020);
2. states with poor human-rights records buying out well-established clubs, as Saudi Arabia with Newcastle (Taylor, 2020);
3. the creation of breakout leagues financed by states with dubious reputation that challenge the viability of legit, established leagues (Masunaga, 2023).
   

This case is designed for Executive Education, MBA., MM., or M.Sc. courses in Strategic Management. It could also be used in Sports Management courses.