Commentary:
Almost two years ago, LIV Golf was founded, offering an alternative to the traditional PGA Tour. This new Saudi Arabia-backed professional golf league paid some of the biggest PGA golf stars millions of dollars to defect from the PGA to the new league. It also rounded out its player corps by paying big bucks to golfers who were past their prime or who had limited success on the PGA tour. Unlike PGA tournaments, LIV events are only 54 holes long, as opposed to 72, and there is no cut, meaning that every golfer who plays wins at least some money. Many golfers who defected to LIV did so for purely financial reasons, to either pad their already hard-won PGA winnings or to make money that they had not made on the PGA Tour. Former PGA Tour star Greg Norman became LIV’s advocate and lightning rod for the new league.
Upon formation and during its short life, LIV Golf has been strongly lambasted due to the Saudi money that is financing the tour and picking off PGA golfers, thus creating a rift with the PGA. LIV is accused of being a blatant attempt by Saudi Arabia to whitewash its horrid human rights record, which includes the murder by Saudi agents of outspoken journalist Jamal Khashoggi at the Saudi consulate in Istanbul, Turkey, in 2018. LIV golfers have been accused of taking blood money for their services and of undermining the very traditional PGA Tour. Stars such as Tiger Woods and Rory McIlroy were reportedly offered in the neighborhood of $100 million to defect to LIV. These stars refused and have been some of the loudest critics of LIV’s intentions.
The LIV and anti-LIV factions have been battling for the past two years, and LIV golfers have been excluded from PGA Tour events. PGA Commissioner Jay Monahan has been steadfast in his opposition to LIV. Both sides have brought multi-million-dollar lawsuits against each other, and general acrimony exists.
Therefore, it came as quite a surprise that on June 6, LIV and the PGA announced that the two leagues would unite in what is akin to a merger, with Saudi money and influence playing a major role going forward. LIV has been financed by Saudi Arabia’s Sovereign Wealth Fund, which has approximately $620 billion in assets. This fund is part of Saudi Vision 2030, which has three major parts. The first is to create a vibrant society that includes urbanism, culture, sports, and entertainment. The second is to create a thriving economy, which includes utilizing a Public Investment Fund to invest abroad and in non-oil exports. The third part is to create an ambitious nation, which includes government effectiveness, creating vibrant Saudi households, and investing in non-profits and volunteer efforts.
The ultimate goal of Saudi Vision 2030 is to transform the image that the world holds of Saudi Arabia as a kingdom that has a one-factor (oil production) economy, and the suppression of women within the country. At face value, it would seem to be a marketing professional’s nightmare to achieve these goals, given the country’s record. However, money can buy influence, especially when $620 billion can help finance a new professional golf league.
Many loyal PGA golfers feel that the rug has been pulled out from under them by the merger, and many people are accusing Jay Monahan of being a sell-out. Monahan himself has publicly admitted that the PGA could not compete against the Saudi money, so rather than continuing to fight it was better to merge.
The LIV-PGA merger sets a frightening precedent for how big money can buy influence abroad, and in a field so mundane as sports. Saudi Arabia is considered to be an ally of the U.S., which views this country as a stabilizing force in the Middle East. However, Saudi Arabia tends to be a friend of the U.S. when it is convenient. When oil prices soared during the worst of the latest inflation wave, the U.S. directly asked the Saudi Arabian government to increase its oil supplies to bring down prices and to ease inflation. In a clear message to the U.S. and the world, it boldly chose not to do this. Even though Iran has been a destabilizing factor not only in the Middle East, but around the world, the Saudi government recently has been warming up its relations with this rogue country.
While the world of professional golf does not rise to the level of global events such as Russia’s invasion of Ukraine or North Korea’s attempt to launch satellites for war purposes, it is an indication of how Saudi money exerts influence. The very way that the LIV-PGA merger was announced, with not even LIV’s Greg Norman privy to the discussions and finding out at the same time as the rest of the world, smacks of backroom deals with very little transparency. According to what Saudi Vision 2023 aims to do, this is exactly the opposite approach of how it should be operating. It appears that Greg Norman was useful to LIV until the moment he was not. In the case of the LIV-PGA merger it was pure capitalism that played out – for better or worse.