• The PGA Tour agreed to merge with rival LIV Golf, which is backed by the Saudi Arabia Public Investment Fund, an entity controlled by the Saudi crown prince.
• The proposed merger comes after the PGA Tour and LIV Golf have been embroiled in lawsuits regarding antitrust claims.
• The deal would end all pending litigation.

The PGA Tour has agreed to merge with Saudi-backed rival LIV Golf in a deal that would see the competitors squash pending litigation and move forward as a larger golf enterprise.

The two entities signed an agreement that would combine the PGA Tour and LIV Golf's commercial businesses and rights into a new, yet-to-be-named for-profit company. The agreement includes DP World Tour, also known as the European PGA Tour.

LIV Golf is backed by the Saudi Arabia Public Investment Fund, an entity controlled by the Saudi crown prince and has been embroiled in antitrust lawsuits with the PGA Tour in the last year. The deal announced Tuesday would end all pending litigation.

PIF is prepared to invest billions of new capital into the new entity, CNBC'S David Faber reported on Tuesday. Terms of the deal weren't disclosed.

The agreement — the second stunning sports deal in just months, following World Wrestling Entertainment's merger with Endeavor Group's UFC — will require the approval of the PGA Tour policy board, Commissioner Jay Monahan said in a memo to players that was obtained by CNBC.

"There is much work to do to get us from a framework agreement to a definitive agreement, but one thing is obvious: through this transformational agreement and with PIF's collaborative investment, the immeasurable strength of the PGA Tour's history, legacy and pro-competitive model not only remains intact, but is supercharged for the future," he wrote in the memo.

PIF Governor Yasir Al-Rumayyan said Tuesday on CNBC's "Squawk on the Street" that after the merger is finalized, which he expects to be "in a matter of weeks," the new board is prepared to evaluate every proposal that is presented. Al-Rumayyan is slated to serve as chairman of the board.

"Whatever it takes that's ... what we're committed for," Al-Rumayyan told Faber.

LIV didn't see its matches distributed on TV in the U.S. until a few months ago, when the league signed a deal with CW Network as the exclusive U.S. broadcast partner. The CW had agreed to air 14 global events, which began in February. Terms of the multiyear deal had not been disclosed.

Nexstar Media Group owns 75% of the CW Network. A representative for the company said in a statement Tuesday there would be no change to the LIV Golf event schedule for 2023.

"This is exciting day to unify and grow the game of golf," Nexstar said in the statement. "We look forward to broadcasting seven more exciting tournaments this year featuring the world's best golfers."

Rival lawsuits

Monahan said the tour looked at the game of golf "on a global basis," as its seen more growth in the sport outside of the U.S.

Still, he acknowledged Tuesday on CNBC that there has been a lot of tensions between the two organizations, but said "the game of golf is better for what we've done today."

The two organizations had filed a series of antitrust claims against the other in recent months. LIV Golf sued The PGA Tour alleging anti-competitive practices for banning its players. The tour countersued, claiming LIV was stifling competition. Disputes ensued regarding the discovery process for evidence.

The lawsuits were spurred as the upstart league had lured multiple high-profile players, such as Phil Mickelson and Bubba Watson, from the PGA Tour after the tour had banned the players from competing in LIV's events.

On Tuesday, Mickelson tweeted, "Awesome day today" as part of a post sharing the news of the merger.

The deal comes soon after LIV golfer Brooks Koepka won the PGA Championship, one of four major titles in men's golf.

As part of the agreement, the groups will establish "a fair and objective process for any players who want to re-apply for membership with the PGA Tour or DP World Tour" following the end of the 2023 season, according to a release.

Growing controversy

LIV Golf, which launched in 2022 and has been spending top dollar to lure golfers, has also been the subject of controversy, criticism and political intrigue in the U.S. PIF has reportedly invested $2 billion into LIV already, and had aspirations of creating franchises and teams that could one day be sold.

Critics of LIV have also accused PIF of "sportswashing" by using the league to distract from the kingdom's history of human rights violations.

Family members of those that perished in the Sept. 11, 2001, terrorist attacks have protested the league, including outside of events. Fifteen of the 19 hijackers on Sept. 11 were from Saudi Arabia, and Osama Bin Laden, the mastermind behind the attacks, was born in the country. It has been concluded by U.S. officials that Saudi nationals helped fund the terrorist group al-Qaida, although investigations didn't find that the Saudi officials were complicit in the attacks.

Former President Donald Trump has hosted a number of LIV Golf events at his golf courses. He has defended being the host of events, falsely claiming that "nobody's gotten to the bottom of 9/11." Last year, Trump also said on Truth Social that a merger between LIV and The PGA Tour was inevitable.

On Tuesday, Trump weighed in on the merger on his Truth Social platform: "Great news from LIV Golf. A big, beautiful, and glamorous deal for the wonderful world of golf. Congrats to all!!!"