The PGA Tour announced on Tuesday that it will merge with LIV Golf. LIV Golf is a Saudi-backed male golf organization formed last year in order to compete against the PGA.
The news of the merger shocked the sports world, and reached even the highest levels of the U.S. Government after a reporter asked the Biden administration for comment about the Saudi government taking such a significant stake in men’s male golf. Biden spokeswoman Karine Pierre declined to comment.
What does it all mean?
What is LIV golf?
In 2022, the Public Investment Fund of Saudi Arabia (PIF) created LIV with two of the most prominent golfers in the world, Phil Mickelson, Greg Norman and others.
Norman was named CEO, but Mickelson was the one who helped LIV become a reality. Mickelson claimed that the PGA Tour did not compensate players fairly for highlights clips and other media right. He accused the organization of “obnoxious” greed.
Mickelson eventually convinced 48 players to leave the PGA Tour and join LIV.
Richard N. Haass, a veteran U.S. Diplomat, said that the merger showed that Saudi Arabia’s interests and those of its government cannot be separated.
Haass said that the president for the Council on Foreign Relations, Haass stated, “It is not as important as the Biden Visitor deal with Iran , and it does not offset their recent inability to raise oil price.” It does send a signal that they are a major player in the world.
Why was the PGA Tour originally against players participating in LIV?
LIV Golf was immediately viewed as a competitor by the PGA Tour, and this view was shared by many golfers who referred to it as a ‘breakaway league.
The Tour then decided to force the players to choose a side. This created a harsh division in the world of golf.
PGA Tour commissioner Jay Monahan seemed to also disparage the Saudis’ presence in LIV. In a June 2022 interview he asked rhetorically, “Have You Ever Had to Apologize for Being a Member of the PGA Tour?”
In response to a suit filed by players who had joined LIV, and claimed that the PGA Tour retaliated on them, the lawyers of the organization denounced LIV as a “strategic move by the Saudi Government to use sport in an attempt to improve its image for human rights violations and other atrocities.”
Why is the PGA Tour merging into LIV?
Both leagues sued each other, but the PGA Tour made the calculated choice to accept the negative consequences of a 180-degree turn in exchange for a united effort with its former competitor.
The announcement on Tuesday may have also rendered moot lawsuits filed by players who were suspended and a federal investigation into possible antitrust action by the PGA Tour towards LIV.
Monahan, sitting next to Yasir al-Rumayyan (the governor of Saudi Arabia’s sovereign wealth fund), told CNBC: “We have recognized that working together, we can make a much greater impact than we could by working separately.” “I give Yasir credit for being open-minded and having an open mind when he came to the table to discuss the issues.”
LIV, despite having a vast amount of financial resources available thanks to Saudi funding, had not been able to secure major TV contracts for broadcasting its events. Instead, they were often relegated instead to livestreams via YouTube.
LIV officials, unsure of their commercial viability, may have decided to approach the PGA Tour and offer peace and money in exchange for their loss.
What is the financial stake? What are the financial incentives for both parties?
The terms of the merger are not known, but LIV Golfers were reportedly promised earnings in the eight and nine figures to join the league. This was thanks to the Saudi Public Investment Fund which is valued at $676 billion.
David Faber of CNBC, who broke the news on Tuesday with an exclusive interview conducted with Monahan, Al-Rumayyan and others, stated that the PIF intends to invest “billions” in the newly-formed entity, while retaining a minority stake.
What will be the impact on major golf tournaments?
They won’t.
The PGA Tour does not own the Masters, U.S. Open or British Open.
The Tour does not control the Ryder Cup, a biennial team tournament. However, prior to this year’s Ryder Cup there was some debate about whether U.S. captain Zach Johnson would choose LIV players.
Has there ever been a merger in professional sport before?
The NFL-AFL merger , which led to the Super Bowl, is the most notable of the four major North American professional sports leagues.
The NBA-ABA agreement of 1976, and the NHL’s takeover in 1979 of the WHA pale in comparison with the geopolitical drama that played out on the PGA Tour LIV.
What do golfers say?
As expected, reactions to the shocking deal were varied — from LIV supporters spitting the ball, to 9/11 survivors criticizing the PGA Tour’s merger with the Saudi-backed LIV which they compared to “terrorists,” while others resigned themselves to the fact that money would always win.
Former President Donald Trump typed all capitals on truth social, boasting about his prediction that the PGA Tour will have to accept LIV.
A group that is a key supporter of 9/11, 9/11 Families United said they were “shocked” and “deeply offended.” They claimed the merger was “financed by billions sportswashing dollars coming from the Kingdom Saudi Arabia.” The group added that “Saudi agents played a major role in 9/11 terrorist attacks and now they are funding all professional golf.”
Lisa Delpy-Neirotti , a sports marketing professor at George Washington University, shrugged off the deal and said it shouldn’t be viewed as a surprise.
I ask my students to spell the word “sports” She said, “It’s m.o.n.e.y.” Fans have short memories. They want to see the stars. They want to see better products.”
