GOLF-PGA tees up China partner to help drive through red tape

BEIJING, Dec 7 (Reuters) - The world’s leading golf tour is handing the reins of its China circuit to a new local partner, a move which should help smooth the path with regulators amid a long-running crackdown on the sport as it battles to clear bureaucratic hurdles.

The PGA Tour had agreed a deal with Shankai Sports, whereby the Chinese partner would operate PGA tournaments in the country for a 20-year period starting from 2018, the golfing body’s China head said at an event in Beijing on Thursday.

The move, which will involve Shankai paying an undisclosed sum to the PGA to operate its China series, follows a lengthy stagnation surrounding the golf market in China since a crackdown on corruption and bans on officials playing the sport.

The PGA itself has faced issues, especially since a three-year deal with the China Golf Association (CGA) expired in 2016.

“We had some differences of opinions, tried to work through those, and decided to reform and reorganise,” PGA Tour Greater China Managing Director Greg Gilligan told Reuters.

He added that the decision to bring on a new local partner on board was driven by “the size of the opportunity and the complexity of doing things here (in China)”.

Golf has grown in popularity in China but hampered in recent years by a sweeping anti-graft campaign under President Xi Jinping, as tales of officials’ high living, including expensive rounds on the golf course, stirred public resentment.

In January, China’s state planner said it had ordered the closure of more than 100 golf courses in a multi-year campaign launched in 2011 to tackle illegal development in the sector.

David Han, chief executive of private equity firm Yao Capital, also told Reuters at the event that the firm had invested 300 million yuan ($45.35 million) in Shankai along with IDG Capital.

In October, PGA Tour officials said the China series would return with a full schedule of tournaments in 2018 after this year’s planned event was scrapped.

In September, the Ladies Professional Golf Association (LPGA) had to cancel a tournament in Shanghai less than a month before it was due to tee off after failing to get local government approval for the event.

$1 = 6.6147 yuan Reporting by Pei Li in BEIJING and Adam Jourdan in SHANGHAI; Editing by John O’Brien