Thought the LIV Golf war was over? You were wrong
2023 is expected to be a ceasefire year, but the quietly missed New Year’s Eve deadline suggests hostilities are still ongoing.
The earthquake occurred around 15:00 on June 6. Golf’s warring factions, the PGA Tour and its European junior partner LIV Golf, have reached a secret agreement to end the war and work together for the good of the game. The force of the reaction was as strong as the declaration of war 12 months ago when LIV launched its first tour in St Albans. Few celebrities knew about PGA Tour Commissioner Jay Monahan and LIV Golf CEO Yasir Al-Rumaian before they appeared together on TV in New York. The announcement sparked widespread disbelief and anger among those who realized the PGA Tour wasn’t meant to work and chose accordingly. Rory McIlroy, until now Monaghan’s player spokesman, has resigned from the PGA Tour board with immediate effect. Jordan Spieth complained about a lack of trust between players and tournament management.
Ultimately, Monaghan realized that the only way forward was to blame the Saudi regime for its unimaginable human rights and sporting abuses. Or at least that’s what we were led to believe. Six months later, a December 31 deadline for a framework agreement detailing what the new world would look like has passed without a resolution. Behind the scenes, Mohanan spoke to alternative investors. He said talks with the PIF had attracted unwanted attention from other parties, including the Fenway Group, owners of Liverpool FC and the Boston Red Sox baseball team. With a 12-month LIV for investors to step in during a conflict, some would have believed Monaghan used the negotiation period as a last-ditch opportunity for creditors to limit Saudi intervention.
However, the Saudis have reached their own conclusion. Defending champion Jon Rahm’s absence from this week’s PGA Tour season opener after winning $350 million from the LIV could be interpreted as a threat. That means Lam will not be the last signing as Monaghan tries to push the Saudis out of the deal. The strength of new investor interest in the PGA Tour has yet to be determined. Negotiations are ongoing with Saudi Arabia’s Public Investment Fund (PIF) and a consortium led by Fenway Group and operating under the name Strategic Sports Group (SSG). The new deadline is expected to be announced in the new year, with some reports suggesting it could be as early as April.
In effect, Monaghan traded fame and tradition for cash. The Saudis have plenty of the latter and none of the former. The PGA Tour needs investment to grow. The company guarantees $10 billion in revenue by 2030, half of which will come from streaming deals and the other half from sponsorships and ticket sales.
Those numbers placed the PGA Tour among the best in the industry before LIV had an initial budget of $2 billion. Half of this was used to buy players. Rahm, the Masters champion and world No. 3, joins other major winners Cam Smith, Dustin Johnson, Bryson DeChambeau, Patrick Reed, Louis Oosthuizen and, of course, old-time gold Phil Mickelson. With Victor Hovland, Tyrrell Hutton and Tony Finau on target, the looting could easily continue. What are the risks to both parties if the transaction fails?
The PGA Tour is rooted in the past, with top players competing in premier tournaments at historic venues. That attracts viewers, attracts broadcasters and attracts sponsors. This virtuous cycle is clearly threatened by the brain drain in LIV. Without the best players, the show becomes less attractive, has a smaller audience and is less valuable.
