The Saudi-backed LIV Golf league begins a new season this week at former PGA Tour venue El Camaleón Golf Course in Mexico, marking another milestone moment in professional golf’s ugly divorce. Since PGA Tour commissioner Jay Monahan and Saudi Arabia Public Investment Fund (PIF) governor Yasir Al-Rumayyan announced a framework agreement on CNBC last June, little tangible progress has been made to consolidate the sport as intended. After a period of détente following the announcement, the dueling tours — facing serious antitrust concerns from the DOJ — resumed a battle for leverage.
On Wednesday, the PGA Tour announced it secured equity partnership from a set of billionaire American sports investors, Strategic Sports Group (SSG), which serves to threaten the once-conventional wisdom that Saudi investment was requisite for the Tour’s survival. Meanwhile, LIV has continued its effort to poach the world’s best golfers from the PGA Tour. This offseason, the league has inked three of the top 40 players in the world to gargantuan guaranteed contracts — including the league’s new crown jewel, current Masters champion Jon Rahm — flexing the PIF’s financial might and sending a clear signal that they will not be boxed out from influence at the sport’s highest level.
The sands have certainly shifted since last June’s framework agreement. Outwardly, the PGA Tour and PIF remain committed to negotiate a definitive agreement. In a letter sent to LIV staffers following the PGA-SSG agreement, Al-Rumayyan said the announcement “is consistent with PIF’s longstanding passion to grow the game.” However, the PGA-SSG partnership is a notable departure from the original framework agreement that positioned PIF as an “exclusive investor in the new entity,” and gave the Saudi-fund “right of first refusal on any capital that may be invested in the new entity.” PIF possibly sees the American investment as necessary to pass muster with the DOJ, but that would also mean accepting a substantially diminished role from what they originally envisioned.
Though the sides are reportedly still negotiating, reading between the lines, a PGA-PIF partnership seems no closer now than when Monahan and Al-Rumayyan sat down with CNBC eight months ago. Look no further than LIV’s 2024 schedule. Last August, two months after the framework agreement was announced, LIV’s Chief Media Officer Will Staeger told SMW, “The LIV Golf league is an additive league in the golf ecosystem … we don’t schedule against the majors, and we don’t schedule against the more significant PGA Tour events.” That notion was thrown out when LIV announced its schedule three months later in November. The league scheduled 5 of its 12 regular season events the same weekend as a “signature event” or a FedEx Cup playoff event on the PGA Tour. This is almost certainly a strategy LIV deployed to draft off of PGA Tour viewership from channel surfing golf fans already situated at their TVs. However, the tactic is hardly “additive” to the golf ecosystem.
LIV is already hedging its bets when it comes to viewership for the upcoming season. After saying the league would release viewership for each event last season (but only actually releasing data for a few events), Staeger told Sports Business Journal earlier this week that the league will likely only issue a press release “if there’s a significant bump.” When SMW asked today what went into the decision not to release ratings this season, a LIV spokesperson pressed, “Does the PGA regularly release their numbers?” That answer is no. But the PGA Tour’s television partners at NBC and CBS issue press releases for nearly every tournament. The CW, LIV’s linear television partner, has issued just one viewership press release ever — following LIV’s first tournament to air on the network.
With the admission that the league won’t acknowledge viewership unless the numbers go up, LIV is saying the quiet part out loud. They have given up on the farcical idea that the league is commercially viable independent of a PGA Tour partnership. Unlike every other professional sports league, LIV is immune to low ratings because of the deep pockets funding it. The meager viewership data that is publicly available has not stopped the league from outlaying over a billion dollars in expenditures, despite TV industry experts estimating it only generated $2 to $3 million in TV revenue last season.
LIV’s lack of commercial viability is the strongest argument for a PGA Tour deal getting done. Absent an even deeper reach into Saudi coffers that results in a mass exodus of current PGA Tour players to LIV — and a subsequent exodus of golf viewers to The CW — the breakaway league faces fading into obscurity. As GOLF.com’s Dylan Dethier expertly laid out in his December piece on the matter, the PGA Tour has viewership that is orders of magnitude higher than LIV’s. On top of that, the Tour has $10 billion in contracted revenue between its media rights and sponsorship deals through 2030, in addition to the $3 billion SSG has invested.
In the meantime, LIV’s greatest leverage is its ability to further dilute the talent pool on the PGA Tour. The Tour has already faced downstream effects of losing top players; longtime tournament sponsors like Honda and Wells Fargo have opted not to renew contracts citing weaker fields and increased purses. Luring marquee players like Rahm and Tyrrell Hatton force the PGA Tour to the negotiating table.
Even so, the PGA-SSG deal has shifted leverage further in the PGA Tour’s favor at the expense of possibly delaying reunification efforts. With the investment, the Tour got the direct cash infusion it needed to fund tournament purses for the next five years. This staves off the immediate threats to its bottom line, and suppresses any chance of a PIF deal done purely out of desperation. That said, both entities know the status quo is untenable. LIV is a money pit and the PGA Tour needs its talent.
Which means once again, professional golf’s future rests on the whims of a dictator. If Saudi Crown Prince Mohammed bin Salman sees value in hobnobbing with a consortium of American billionaires and the executives of Fortune 500 companies that sponsor PGA Tour events, a deal could be reached quicker than expected. If the Saudis still hold grand aspirations of being the primary power broker in world golf, then an agreement may take longer to sort out. Other than the potential DOJ hurdles a deal would face, the biggest variable to golf’s eventual reunification right now is Al-Rumayyan and MBS’s appetite for losing money. How many more PGA Tour players would they like to offer 8 and 9-figure contracts? How much longer would they like to air on a second-tier network and collect zero in media rights fees? How long will they commit to LIV as a standalone product? Their appetite will surely be tested as the 2024 golf season trundles on.
