Forging a Path Together: The Vision Behind the PGA Tour and LIV Golf Merger

To arrive at the potential long-term positive outcomes of the PGA Tour LIV Golf merger, one must be willing to look past the host of negative headlines that accompanied the announcement of the deal back on June 6th.  In their perfect scenario, the parties involved (the PGA Tour, LIV Golf, and the DP World Tour) would like us to take the language in their press release at face value and move on with no questions asked.  In their words, the decision was made “to unify the game of golf, on a global basis” with a plan “to grow these combined commercial businesses, drive greater fan engagement, and accelerate growth initiatives already underway.”  We know it’s not that simple, however.

 

Every Right to be Skeptical

It doesn’t take very much digging to know that at the heart of this announcement is money. And lots of it.  The sovereign wealth fund of Saudi Arabia, known as the Public Investment Fund (PIF), is the sole backer of LIV Golf.  The PIF is one of the largest sovereign wealth funds in the world and professional golf is just the latest in a series of moves by oil-rich Saudi Arabia to diversify their investments away from the oil industry.  In just the last few years, PIF has made large investments in the WWE, English Premier League clubs, and now the LIV Golf tour.

Skeptics of Saudi Arabia’s intentions are quick to note that these investments are nothing more than an attempt to “sportswash” their global reputation, and rightfully so.  The Saudis have long been accused of supporting terrorist activity, including 9/11, and a notoriously poor human rights and corruption history including the murder of a Washington Post journalist who had been critical of the kingdom.  It’s widely believed that orders for the murder were handed down by the highest individuals in the Saudi Arabian government.  And given the immense size of PIF and its huge position in the global oil industry, it’s difficult to believe that their sports investments are internally viewed as critical to their investment portfolio returns.

However, for the PGA Tour, the PIF’s infinite checkbook appears to have become too hard to ignore.  While the Tour had announced hugely lucrative changes to its event schedule in late 2022, its runway had become limited as legal bills from court battles with LIV Golf began to pile up with no end in sight.  Tour leadership grew resigned to the fact that the Saudis and LIV Golf would be a huge drain on their resources.

Instant reaction to news of the merger from around the sports and business world quickly centered on the two main ingredients in this recipe: money and relevance.  The PGA Tour recognized that by agreeing to give Saudi Arabia/LIV a piece of the professional golf pie, they could quickly end all of the ongoing and expensive litigation while also gaining access to the previously mentioned unlimited checkbook of PIF to continue their operations and unify professional golf under the PGA Tour umbrella.

Saudi Arabia, meanwhile, gets exactly what they wanted all along, a seat at the table in professional golf.  It’s believed by many that LIV Golf was never anything more than a stalking horse to achieve this result.  LIV, despite the star power of its player roster, had in its twelve months of existence struggled mightily to gain any form of commercial or fan appeal.  Just a few months ago the upstart tour quickly stopped announcing their television ratings after just a few weeks of abysmal numbers.  Whether or not PIF knew LIV would never gain a large fan base, it became just enough of a nuisance for the PGA Tour to achieve this result.

There remains much to be sorted out with the merger and whether or not it will be held up by Congress.  PGA Tour officials will be in front of a senate subcommittee on June 11th to answer questions as to why an American professional sports league is partnering with the sovereign wealth fund of a hostile country and whether or not the PGA Tour should retain its non-profit status.

 

Will Any Good Come of This Merger

Let’s for a minute suspend reality and ignore all of the trouble that currently accompanies the PGA Tour LIV Golf merger and consider the longer-term vision of the merger.  Will any good come of it?  That is the hope, of course.  For centuries, golf has been a game used for good.  At its core, it’s a game of integrity, honesty, and perseverance.  

The hope is that ultimately this merger is used for good as well.  Just like the PGA Tour and LIV Golf asserted in their joint statement, “Going forward, fans can be confident that we will, collectively, deliver on the promise we’ve always made — to promote competition of the best in professional golf and that we are committed to securing and driving the game’s future.”

There is much to be sorted out for that to happen.  Central to all of it is how each entity will exist moving forward and whether or not Saudi Arabia’s dominant investor position paves the way for them to end up dominating any decision-making.  It cannot be ignored that both the PGA Tour and LIV Golf have extremely intelligent and accomplished business people negotiating on their behalf and in pursuit of their best interests.  Yet, if these individuals do love the game of golf as they claim, they will take every measure possible to safeguard the game and not forget about the most important part of any professional sport: the fans. 

Without fans and the money, time, and attention they devote to the game, there are no huge winner’s purses, there are no lucrative TV deals and the PGA Tour LIV Golf merger is of zero consequence.  The negotiators would be wise to remember this as they no doubt attempt to hammer out the best deal possible for themselves.