The PGA Tour said on Tuesday that it would join forces with LIV Golf, a men’s golf group backed by Saudi Arabia that was started last year to compete with the PGA.
The merger news sent shock waves through the sports world and even to the top levels of the U.S. government, where a reporter asked the Biden administration for a comment on the Saudi government’s big investment in men’s golf. Karine Jean-Pierre, who works for Biden, refused to say anything.
What does it all mean?
What is LIV Golf?
LIV was made in 2022 by the Public Investment Fund (PIF) of Saudi Arabia, along with Phil Mickelson, Greg Norman, and other well-known players.
Norman was named CEO, but Mickelson was the one who helped LIV start up. Mickelson said that the PGA Tour was “obnoxious greedy” because it didn’t pay players properly for things like highlight clips and other media rights.
Mickelson eventually helped 48 players decide to leave the PGA Tour for LIV.
Richard N. Haass, a veteran U.S. official, said that the merger showed that Saudi Arabia and its goals cannot be kept separate.
The head of the Council on Foreign Relations, Haass, said, “It’s not as big as the Biden visit or the deal with Iran, and it doesn’t make up for their recent failure to raise oil prices.” “But it does show that they are an important player who can’t be ignored.”
Why did the PGA Tour initially bar players from participating in LIV?
The PGA Tour saw LIV Golf right away as a straight competitor, and many people in the golf world agreed. They often called it a “breakaway league.”
So, the Tour chose to make players pick a side. This made the golf world very divided.
In a June 2022 interview, PGA Tour Commissioner Jay Monahan asked rhetorically, “Have you ever had to apologize for being a member of the PGA Tour?” This seemed to be a dig at the Saudis’ participation in LIV.
In reaction to a lawsuit from players who had joined LIV and said the PGA Tour had retaliated against them, lawyers for the organization said that LIV was “a way for the Saudi government to use sports to try to make up for its human rights abuses and other atrocities.”
So Why is the PGA Tour Merging with LIV?
The two leagues finally filed lawsuits against one another, but the PGA Tour took the calculating decision to put up with the fallout of turning 180 degrees in exchange for a collaborative endeavor with its erstwhile competitor.
Following Tuesday’s announcement, lawsuits brought by suspended players and a federal investigation into potential antitrust violations by the PGA Tour against LIV may also be rendered irrelevant.
At the LIV tournament, Monahan was sitting next to Yasir Al-Rumayyan, the governor of the Saudi sovereign wealth fund. “We’ve recognized that together we can have a far greater impact on this game than we can working apart,” Monahan told CNBC. And I give Yasir a lot of credit for participating in the talks with an open mind and heart.
Even though LIV had a lot of money because Saudi Arabia supported it, it couldn’t get big TV networks to show its events. Instead, they were often shown as livestreams on YouTube.
Because it wasn’t clear if it could make money, LIV officials may have thought it was best to cut their losses and offer the PGA Tour peace and money.
How Much Money is Involved? What are the Financial Incentives on both Sides?
The financial details of the merger have not been made public, but according to reports, LIV Golf players were guaranteed eight- and nine-figure salaries in exchange for joining the league. This was made possible by the $676 billion Saudi Public Investment Fund.
The PIF intends to put “billions” into the newly established firm while it retains a minority position, according to CNBC’s David Faber, who helped break the news on Tuesday with an exclusive interview with Monahan and Al-Rumayyan.
How will Major Golf Events be Affected?
Not at all.
The Masters, the U.S. Open, the British Open (now called The Open), and the PGA Championship, which is not owned by the PGA Tour despite its name, are all different from the PGA Tour.
The Tour also doesn’t run the team-based Ryder Cup game, which happens every two years. Before this year’s tournament, there were questions about whether U.S. team captain Zach Johnson would choose LIV members instead.
Have there been Mergers in Professional Sports before?
All four of the major professional team sports groups in North America have merged at some point in their histories. The most famous merger was between the NFL and the AFL, which led to the Super Bowl.
The first World Series in 1903, the deal between the NBA and the ABA in 1976, and the NHL’s takeover of the new WHA in 1979 pale in comparison to the global stage where the PGA Tour-LIV drama took place.
What are People in Golf saying?
As expected, people’s reactions to the shocking deal were all over the place, from LIV fans spiking the ball to 9/11 survivors criticizing the PGA Tour for merging with the Saudi-backed LIV, which they compared to “terrorists.” Other people were just resigned to the fact that money rules the world.
Former President Donald Trump wrote in all capital letters on Truth Social, bragging that he had predicted that the PGA Tour would have to work with LIV.
9/11 Families United, a key Sept. 11 support group, said it was “shocked and deeply offended” by the merger and said it was “funded by billions of dollars from the Kingdom of Saudi Arabia from sportswashing.” It said, “Saudi operatives played a key role in the 9/11 terrorist attacks, and now Saudi Arabia is paying for all of professional golf.”
Lisa Delpy Neirotti, a professor of sports marketing at George Washington University, shrugged her shoulders and said the deal shouldn’t have surprised anyone.
“I always ask my kids how to spell the word’sports.’ It’s m-o-n-e-y,” she said. “Fans are forgetful. They are desperate to see their stars. They’re looking for a better offering.”
