(Bloomberg) -- Saudi Arabia secured a much-hyped coup in signing Jon Rahm, one of the world’s top golfers, to its LIV Golf league — but the real work ahead lies in eliminating hurdles to a historic tie-up with the PGA Tour before the year-end deadline.

The deal for Rahm, 29, is partly an attempt to highlight how serious Saudi Arabia is in owning a slice of one of the world’s most lucrative sports, coming during a crucial time for talks between the PGA Tour, PIF and US authorities, according to people close to the talks. 

The PGA Tour and PIF must update the US Justice Department on talks before Dec. 31 as it has to examine and approve the deal for the merger to go through, according to people familiar with negotiations who asked not to be identified because of the confidential nature of the discussions. 

One scenario is that US authorities would receive an updated memorandum of understanding by the end of the year, which would likely open the door for an outside US investor to join the Saudi-based $600 billion Public Investment Fund in backing the merged entity, the people said. 

“Negotiations toward reaching a Definitive Agreement with the PIF and DP World Tour are ongoing,” according to a letter to PGA Tour members posted by Tiger Woods on the X social media platform. “Constructive engagement is a key component of the process, and we are working diligently toward the Dec. 31 deadline.”

The recruitment of Rahm, currently No. 3 in the world, also comes after the LIV and the PGA in July agreed to drop a provision that forbids poaching of golfers, at the behest of the Justice Department. The provision was a stop-gap measure to ensure defections would stop until a final deal was sealed.

US Investors

Bids from US investors for a stake in a new entity being created by the PGA Tour and PIF are due this week and no frontrunner has emerged so far, the people added. Investors still in the running to strike a deal include billionaire Todd Boehly’s Eldridge Industries, a consortium led by Fenway Sports Group, investment firm Acorn Growth Cos., and Liberty Media Corp., the owner of F1, Bloomberg has previously reported.

The PGA Tour and PIF face a long road to seal the deal. The parties are not “there yet” in terms of finalizing financial aspects of their deal before the Dec. 31 deadline, the people said. Moreover, the finalized deal would have to go through the Justice Department’s rigorous review process. The initial examination could take as many as 30 days before the agency decides whether to greenlight the pact or not. 

Discussions in coming weeks will focus on how much equity PGA Tour players will get, the valuation of the merged entity, how much money the Saudi Public Investment Fund (which bankrolls LIV), the PGA Tour and the potential US investor would invest into the new golf circuit and who’ll be on the board, the people said.

Late Thursday, Rahm, the Spaniard who won the coveted Masters title earlier this year, tweeted that he’d joined LIV. He could earn as much as $300 million for the switch, according to a report from ESPN. 

Spokespeople for LIV and PIF did not immediately respond to requests to comment. 

A PGA Tour spokesperson said the circuit can’t speak for decisions of individual players, but added that: “based on the momentum of the past season and strength of the PGA Tour, along with the accelerated interest from and negotiations with a number of outside investors, we are in position to make our players equity owners and further allow the Tour to invest in our members, invest in our fans and continue to lead men’s professional golf forward.”

Tactics

LIV’s move to bring Rahm over amid deal discussions is likely a negotiating tactic, according to some sources. It comes as the PGA Tour and its players are looking to shore up the tour’s financial position by seeking an outside US investor.

LIV’s return on investment in potentially paying Rahm hundreds of millions of dollars to come on board is being questioned by pro golf fans and industry watchers. That’s because the framework agreement included a clause about putting in place “a fair and objective process,” which is yet to be determined, for any LIV players who want to return to the PGA Tour.

“The money is great. Obviously, it’s wonderful,” Rahm said in a Fox News interview on Thursday. He clarified that he plays for the love of golf and not for money, “but as a husband, as a father, as a family I have a duty to my family.”

On whether the deal is going to work, Rahm said: “I certainly hope the best for the future,” adding that he aims to make golf better and more popular than it was when he started his career over a decade ago. “And I hope that solves whatever issues may be right now in the game and we can actually enjoy really good, healthy competition and the best can play against the best.”

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