LIV Golf loses $800 million in first year, but is also here to stay

Via The New York Times

LIV Golf loses $800 million in first year, but is also here to stay

Golf

LIV Golf loses $800 million in first year, but is also here to stay

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LIV Golf took an absolute shellacking in their inaugural season of play. Their introduction into the global sports market was an expensive one, but is a likely template for how they will continue to do business. With money to burn, and a stable of global talent, the upstart league promises to change how professional golf looks, feels, and operates.

LIV rolled out a new format of competition where 48 players compete for $25 million in prize money, in a 54-hole stroke play competition with no cut line. Win or lose, they hand out hundreds of millions of dollars in guaranteed money. A brief look at guaranteed contracts with LIV shows the willingness to secure top names in golf.

Guaranteed Dollars For Star Golfers 

Phil Mickelson – $200 million

Dustin Johnson – $150 million

Brooks Koepka – $150 million

Bryson DeChambeau – $125 million 

Cameron Smith – $100 million 

With eight tournaments in the books, understanding their vision of success is to see a much different and bigger platform for the highest profile golfers. If there’s one absolute need for next season, it’s a media deal that provides needed exposure. Taking LIV from a niche tour to the next level places them on a more level field with the PGA,  and not the novelty of something seen only on YouTube. 

In 2023, LIV will expand from eight events to 14. Prize money will also increase from $255 million to $405 million next year. It’s a bold and aggressive move. On the business side, they have made significant strides. They went out and signed Mickelson, Johnson, Koepka, and DeChambeau. They held eight tournaments in four different countries, as well as growing their social media presence to better than 125 million followers, and adding more than 125 employees in three international footprints around the globe.

Norman Knows Sharks Are In The Water

But problems do persist. Namely LIV commissioner Greg Norman. The pied piper of the league has served as a frontman to potential golfers, but he is also facing strong headwinds as they prepare for 2023. 

World number one golfer Rory McIlroy said to reporters this week that the future of a working partnership between LIV and the PGA is contingent on Norman not being the face of their rival league. Ahead of this week’s DP World Tour Championship in Dubai, McIlroy made it clear that while Norman was instrumental in getting LIV off the ground, he was not the person capable of fixing bridges he had burned with a former PGA member who has won the Open Championship twice. 

Just last week, Saudi Golf Federation CEO and leader of Saudi Golf Majed Al Sorour, denied a report in the Telegraph of London that Norman was on his way out. The report said that LIV Golf was pursuing Taco Bell CEO Mark King to replace Norman. King was previously the CEO of TaylorMade and president of Adidas in North America and met with Yasir Al-Rumayyan, governor of the Saudi Public Investment Fund. Sorour denied any change is forthcoming with Norman.

Now, both sides are in litigation with LIV Golf filing an antitrust lawsuit against the PGA claiming the PGA Tour illegally suspended players for competing in LIV Golf events and is exercising monopoly power to get rid of their competition. The PGA Tour subsequently filed a countersuit, claiming LIV Golf has interfered with existing contracts it had with PGA members. If history is any indication, Jay Monahan, PGA Tour commissioner will have a tough time defending the ability of a golfer to work. 

The Saudi Golf Federation knows that Greg Norman is the one person standing in the way of having a working partnership. The same can be said for those on the PGA Tour. For LIV Golf, they know that Norman will have to go.

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