By: Lauren Cuppy
September 20, 2023
Photo Credit: Penn Today
Investing in athletics is a key component of Saudi Arabia’s plan to expand its economy and global influence. Since 2021, The Saudi Arabian Public Investment Fund (PIF) has spent at least $6.3 Billion in supposed sportswashing – an attempt to distract from its human rights record. Most notably, the PIF established LIV Golf, a modern twist to an otherwise extremely traditional sport.
As discussed in a previous SBAJ article by Riley Day, LIV proposes a brand new approach to golf by emphasizing entertainment and advanced technology, appealing to a younger audience. LIV also introduces a different format where less players compete for more earnings, prompting organizations like the PGA Tour to raise their purses in order to remain competitive. Unlike the PGA, LIV does not cut players throughout the tournament, guaranteeing every participant a monetary prize. Many high-profile players, such as Phil Mickelson, have left the PGA Tour for LIV, causing ambiguity surrounding the future of the sport’s professional landscape.
The animosity between the PGA Tour and LIV has shifted the conversation surrounding golf, and the merger, announced this summer, raises inquiries about the future of the sport.
The whole debacle is messy. First, LIV sued the PGA for monopolistic control of the professional golf space in violation of antitrust laws. Then, the PGA countersued for tortious interference, claiming that LIV falsely communicated with the PGA golfers that they were able to break their contract and leave the tour. These lawsuits rack up extreme costs for both entities, and since nobody wants to enter a legal battle, one of the attractive features of a merger is that both parties would agree to drop all pending litigation.
One of the largest questions surrounding the merger is how the new entity will approach players who left the PGA Tour for LIV. While progress on the deal is at a standstill, an ambiguous framework was released stating that they are going to “consider fair criteria in good-faith for re-entry, such as fines or suspensions." However, many viewers tune in to watch their favorite golfers, such as Dustin Johnson or Bryson DeChambeau, play. If these players are suspended or don’t return, it could potentially impact their viewership. Phil Mickelson, on the other hand, has openly expressed that he does not intend on returning to the PGA Tour after seeing what LIV had to offer.
Although the official structure is still in the works, the new entity will attempt to maintain the PGA’s tax-exempt status and provide them controlling interest in the board of directors. The framework also states that PIF will contribute a generous cash investment, along with LIV, in order to be issued ownership shares and voting rights in the new entity. A proper valuation has not been conducted, but both parties will agree on a given price.
As the dynamics between LIV and the PGA Tour shift, golf is evolving into a more creative space. For example, Tiger Woods and Rory McIlroy are to launch the TGL next year. This complement to the PGA Tour will focus on incorporating advanced technology into the game, similar to LIV’s approach. As seen in movements such as the TGL, the complex relationship between LIV Golf and the PGA Tour stands at the forefront of a shift in the world of professional golf, promising an exciting future for both players and fans.