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Phil Mickelson, take a bow!
Lefty has said for the longest time that the PGA Tour had been hiding critical information which would have been damaging if it should come out in a courtroom.
In one of the biggest sports shockers in recent memory, the PGA Tour today agreed to a merger with LIV Golf. With LIV Golf hemorrhaging money ($2 billion at last report) and the PGA Tour’s television ratings remaining fairly steady, many of us (me included) predicted that LIV Golf would eventually just wave a white golf towel and quietly fold within the next year.
That is not going to be happening now.
LIV Golf’s Saudi Arabian financial backers have just become partners with the PGA Tour and the DP Tour (formerly known as the European Tour). The sudden announcement of this agreement has sent shock waves through the normally stoic world of golf.
PGA Tour commissioner Jay Monahan said earlier today, “There’s been a lot of tension in our sport over the last couple years. What we’re talking about today is coming together to unify the game of golf, and to do so under one umbrella.”
The PGA Tour golfers who opted not to accept millions of dollars in signing bonuses from LIV Golf’s Saudi-backed investment fund were confused and angry with this abrupt about face by their team.
Though Phil Mickelson received a reported $200 million signing bonus from LIV Golf, some of the top PGA Tour professionals such as Rory McIlroy, Jordan Spieth, and others remained loyal soldiers. The PGA Tour commissioner frequently disparaged the LIV Golf tour over the past two years. The PGA golfers felt as if their commissioner was squarely on their side.
All of a sudden, the same man just announced a deal to partner with LIV Golf? PGA Tour commissioner Jay Monahan has a lot of explaining to do.
PGA golfer McKenzie Hughes tweeted, “Nothing like finding out through Twitter that we’re merging with a tour that we said we’d never do that with.”
“The hypocrisy,” said PGA golfer Dylan Wu. “I guess money always wins.”
Those were just a few of the nicer things uttered by disappointed PGA Tour golfers today. Many pro golfers became (pardon my pun) rather teed-off at their leadership.
How in the world could this have ever come to pass?
A mutual fear of the courtroom.
Phil Mickelson and ten other LIV golfers took the PGA Tour to court in August, 2022 after the PGA Tour would not allow some of the LIV defectors the right to participate in the season-ending FedEx Cup series of golf tournaments. Some of the LIV golfers had participated in about 2/3 of the 2022 PGA season and had accumulated enough FedEx qualifying points prior to teeing-up in their first LIV Golf event.
Their complaint said that LIV Golf served to “threaten” the PGA Tour’s influence as the most powerful name in golf. As a result, “The (PGA) Tour has ventured to harm the careers and livelihoods of any golfers who have the temerity to defy the Tour and play in tournaments sponsored by the new entrant.”
“The Tour’s conduct serves no purpose other than to cause harm to players and foreclose the entry of the first meaningful competitive threat the Tour has faced in decades,” the suit said.
In June, 2022, LIV Golf began with much fanfare but relatively few golf fans. Last summer’s first season of LIV Golf also had no network television coverage. Fans had to watch events on the LIV Golf website or its designated You Tube channel. Weekly PGA Tour events were drawing roughly 20 times the number of television viewers than LIV’s meager media presence in 2022.
In 2023, LIV Golf cut a deal with the relatively obscure CW Network, but it was only for weekend coverage. If you wanted to watch a LIV Golf Friday opening round, you must watch via the CW Network app on your computer or TV.
On the positive note, LIV Golf’s popularity with fans started to improve in 2023.
In an early season tournament played in Australia, the event attracted more than 30,000 fans per day. It was, by far, the most ever for the fledgling golf tour.
When LIV returned to the USA, sizable crowds showed at recent events played in Tulsa, Oklahoma and in the Washington, DC area. The tour’s second year was showing significant growth in attendance and with television viewership. It was starting to look as if LIV Golf was turning the corner in terms of fan interest.
However, LIV Golf was not even close to approaching financial viability this year.
LIV Golf is losing lots of money again in 2023. The league has relied on the deep and oily pockets of the Saudi Public Investment Fund (PIP). If my investment company lost $2 billion on a start-up venture such as LIV Golf, I would be taking my money out of that company in a heartbeat. Since I don’t know how this Saudi Arabian investment company operates, perhaps their investors are required to be a bit more patient with moving their money around.
The LIV Golf Tour doled out huge signing bonuses to Phil Mickelson ($200 million) and more than $100 million each to Bryson DeChambeau, Dustin Johnson, and Brooks Koepka. Its weekly tournament purses were more than double those being paid by the PGA Tour.
There is no way that LIV Golf can make a profit (if that has ever been their true motive) by doing business like this.
Surprisingly, the PGA Tour decided to make some significant increases to their tournament prize money payouts starting this year in 2023. The tour also made a number of other changes and concessions aimed at appeasing its remaining stars.
If the PGA Tour was not concerned about LIV Golf, why would they make any changes at all?
More importantly, where did the PGA Tour obtain that extra money to be used to pay those increased purses? Why wasn’t the PGA Tour already paying the money to its players in the years prior to LIV Golf arriving on the scene?
So, what exactly has the PGA Tour been hiding?
The anti-trust lawsuit filed last August by LIV Golf may be the answer to many of these questions.
If the LIV Golf lawsuit would have reached the point where its attorneys were allowed to do some legal discovery work with the PGA’s financial and tax records, some of the PGA Tour’s dirty little secrets may have been revealed.
Phil Mickelson claimed that the PGA Tour had not been forthcoming about its true financial condition. As reported here in June, 2022, Phil asserted that the Tour was not funneling 55% of its revenues back to the players as it alleges it was doing. In recent years, he thinks it was more like 30%. Lefty suggested that the PGA Tour has been generating a significant amount of cash from the marketing of players’ media rights (which are owned by the Tour).
Whether Phil Mickelson (whose own gambling issues may have motivated him to take the LIV Golf cash) is accurate is not the point. He may have been close enough to the truth that the PGA Tour could not allow the LIV Golf lawsuit to proceed much farther.
Likewise, LIV Golf’s financial backers may have been looking for a convenient way to claim a victory after losing billions of dollars in less than two years.
Today’s odd couple marriage of LIV Golf into the family of PGA Tour entities came out of the blue. If this was a baseball game, it appeared that the PGA Tour was leading LIV Golf by a score of 9-1 entering the seventh inning. LIV Golf had been able to scrounge a few hits but was rapidly approaching its final innings.
Why would the PGA Tour cut a deal when, to most observers, they had their opponent on the ropes?
The PGA Tour panicked. The skeletons in their closet may have been rattling a bit too loudly.
Regardless of the baloney we will be hearing this week and in the months to come, the PGA Tour did not make a deal with LIV Golf in order to make the golf world a happier place for all.
They did it for reasons of self-preservation and control.
Here is a suggestion to the rightfully confused but loyal golfers of the PGA Tour. Demand an immediate and detailed audit of the PGA Tour’s finances for the past decade by a qualified third party. Learn the truth about where all of the PGA Tour’s revenue has been coming from and going to every single year.
I am reminded of the ancient Chinese saying by Sun Tzu. “Keep your friends close, and your enemies closer.”