While representatives from Saudi Arabia's Public Investment Fund made progress in discussions with PGA Tour officials in New York last week regarding terms of their proposed $12 billion joint venture agreement, one particularly thorny issue continues to plague negotiations - what to do about enormous player contracts from the Saudi-backed LIV Golf.

Sources indicate the lucrative reported $300 million deal signed last year by star Spaniard Jon Rahm to join LIV has become among the most problematic sticking points. The PGA Tour is said to be resisting the legitimacy of such immense long-term guaranteed payouts for players who defected from the Tour to the rival LIV circuit.

However, LIV Golf and players who inked enormous signing bonuses with the Saudi-backed league will likely argue those contracts should be respected and protected under any final cooperation agreement between the two entities. There remains a lack of consensus even among LIV players about whether past contract terms can or should be reworked.

Jon Rahm plays a shot on day one of LIV Golf: Chicago at Bolingbrook Golf Club on Sept. 13. (Quinn Harris/Getty)

With billions at stake from the Saudi Investment Fund's involvement, all parties have incentive to complete a deal. But the disagreement over honouring outsized deals like Rahm's lucrative LIV contract continues posing a formidable hurdle to ultimately finalizing the much-anticipated agreement. Only time will tell if a compromise can be found to satisfy both tours and players on the contentious issue.

A new flashpoint has emerged in negotiations between the PGA Tour and LIV Golf that could further jeopardize a comprehensive deal. Sources indicate some PGA members are proposing financial penalties for players like Jon Rahm who have already earned sizable sums from the Saudi-backed circuit.

Read more: LIV Golf Money List: How Much Every Player Has Earned In 2024

However, in pushing back, Rahm and others who left for LIV have strongly refused to agree to terms that could retroactively punish them for choices made. This includes returning funds, paying fines, donating to charities or forfeiting future career winnings.

Notably, the Spaniard is currently in an ongoing dispute with the DP World Tour over imposing penalties for violating its regulations. Rahm also recently earned $22 million for his LIV Golf individual season title victory.

With so much money at stake for both entities, their star players now seem poised to wield considerable influence. Tiger Woods, Rory McIlroy and other player directors carrying weight in PGA board discussions face the difficult task of finding middle ground.

But getting LIV participants and defectors from the PGA ranks to see eye-to-eye on the contentious financial questions surrounding contractual commitments could present one of the thorniest challenges to finalizing any deal between the two tours. 

Sources have indicated travel requirements are emerging as yet another complicating issue that could stall negotiations between the PGA Tour and LIV Golf.

Accustomed to mainly competing domestically in North America, traditional PGA players are said to be hesitant about committing to regularly tour globally for new LIV events overseas as a term of any union between the circuits. This diverges from LIV’s ambitions for its tournaments to span international destinations outside the U.S.

If differences on travel demands cannot be worked out, it threatens to throw another wrench into discussions already proving fractious around financial questions. One potential compromise discussed is separating shorter term logistical concerns from larger agreement terms governing areas like schedules and equity stakes.

However, the lack of star players or representatives present at last week’s high stakes meetings between both entities due to scheduling conflicts suggests bridging this divide will be no small task.

While discussions between the PGA Tour and LIV Golf drag on, sources indicate the Saudi-backed circuit has kept exerting influence through lucrative contracts signed by star defectors like Jon Rahm.

The Spaniard's mammoth reported $300 million payday agreed to late last year exemplifies LIV's ability to prize top players away, a dynamic complicating reintegration efforts. Meanwhile, the PGA has brought new capital into its business through the Strategic Sports Group's sizeable investment earlier this year.

However, with negotiations between the tours said to be reaching a critical stage, concerns are mounting that failure to finalize a deal could have major ramifications. There are worries the Saudi PIF may abandon talks and pivot full focus towards expanding LIV's brand and talent pool internationally.

The fragmented state of pro golf and diminished viewership for some major events underscores the need for resolution. But with money flows from LIV deals and the circuit's Saudi backing continuing to disrupt negotiations at each turn, brokering a comprehensive settlement remains an immense challenge. All will be watching to see if the warring factions can ultimately overcome their differences.