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It’s nearly Christmas time! While the rest of the sports world seems to be in a festive holiday mood, the longtime men’s professional golf tour is bunkered in one very deep sand trap as 2023 comes to a close.
Back in June, the PGA Tour Commissioner Jay Monahan announced a merger of the PGA Tour with the upstart Saudi-financed LIV Golf group. It was like a bolt of lightning coming out of a blue sky. It shocked the golf world.
Here’s a brief refresher on how LIV Golf came into existence.
Saudi Arabia’s Public Investment Fund (PIF) has billions of dollars available to spend on a variety of investments. A source indicated that they are sitting on a $700 billion pile of cash. The head of that fund supposedly approached the PGA Tour a few years ago and asked to contribute $1 billion to partner with professional golf’s premier men’s tour. They wanted to expand it on a worldwide basis.
The PGA Tour Commissioner told them, effectively, to hit the road. No, thanks!
So, the Saudi Investment group used their own money to start its own new golf league. LIV Golf started play in the spring of 2022.
In less than two years, this upstart men’s professional golf league has poached many of the PGA Tour’s best known stars by offering massive signing bonuses. Players received anywhere from $10 million on the low side up to a reported $200 million to obtain the services of golf legend Phil Mickelson. Other major champions such as Dustin Johnson, Brooks Koepka, Bryson DeChambeau, and Cameron Smith have joined LIV Golf, too.
Earlier this month, LIV Golf signed yet another top young PGA talent. Jon Rahm inked a deal which may be valued at more than $300 million.
LIV Golf’s backers have plenty of cash, and they don’t mind spending it.
Different from the PGA Tour, the 48-player (for now) LIV Golf league plays just 54 holes (LIV in Roman numerals is the number 54, you know) over three days instead of the PGA Tour’s standard of 72 holes played over four days. LIV Golf also utilizes a unique four-man team concept and rewards the top three team scores with even more cash after each tournament.
Speaking of cash, each LIV Golfer receives a weekly minimum paycheck (usually $25,000) for participation in their no-cut events. LIV Golf purses are more than double the average PGA Tour event with less than half of the golfers.
The LIV Golf season is much shorter, too. The league teed-up just 13 events in 2023 (about half of those played in the US). Meanwhile, the US-based PGA Tour golfers will play a 39-week tournament schedule coming up in 2024.
The PGA Tour is starting a counter-offensive to LIV Golf in 2024. Or will they?
To help combat the LIV Golf defections, PGA Tour Commissioner Jay Monahan announced in March, 2023 a number of changes which would begin with the quickly-approaching 2024 golf season. The PGA Tour plans a series of eight “signature events” in 2024 featuring outsized “LIV-like” purses to be paid to a reduced field of only top-ranked golfers.
Commissioner Monahan said, “In 2024, select Designated events will be between 70 to 80 players, with no cut – and with opportunities for players from Full-Field events to qualify and compete. These smaller, Designated event fields will not only deliver substantial, can’t-miss tournaments to our fans at important intervals throughout the season, but they will also enhance the quality of Full-Field events.”
That sounds a lot like a LIV Golf event to me.
Then, out of the blue, a proposed merger agreement with LIV Golf appears?
In early June, 2023, a surprising announcement shocked professional golf with the announcement of a proposed merger deal being negotiated between the PGA Tour, the DP World Tour (European Tour) and LIV Golf.
Once again, here is PGA Tour Commissioner Jay Monahan:
“This transformational partnership recognizes the immeasurable strength of the PGA Tour’s history, legacy and pro-competitive model and combines with it the DP World Tour and LIV – including the team golf concept – to create an organization that will benefit golf’s players, commercial and charitable partners and fans.”
This reported deal was expected to be finalized by December 31, 2023. It has not happened yet.
What’s the hold-up?
For one, the PGA Tour has been busy entertaining a few other offers from investors who don’t want to see the Saudis win this game. However, a viable alternate financial partner has not emerged.
The clock is ticking toward December 31. The self-imposed deadline with LIV Golf can easily be extended. They have plenty of money and time on their side.
The PGA Tour, though, has another season of golf ready to kick-off in about three weeks with a lot of big promises already made to their talent (the golfers), the sponsors, and fans.
As of mid-December, 2023, confusion reigns.
Even the PGA Tour players are now rebelling. This week, a group of golfers filed suit demanding to be more fully informed and included in the merger negotiations.
A lack of trust in PGA Tour Commissioner Jay Monahan and his small cadre of insiders has many pro golfers (rightfully) concerned. Are those at the negotiation table more concerned about the future of the PGA Tour golfers or their own personal fates?
To make matters worse, Wells Fargo, a long-time title sponsor of a top PGA Tour stop in Charlotte, North Carolina, announced that it will end its sponsorship after this season’s 2024 event. The tournament is generally considered to be one of the most popular stops on tour. It attracts a stellar field of top ranked golfers.
If one of the Tour’s most popular stops is now in financial trouble, what does that say about the other lesser-attended or financially weaker PGA stops?
The PGA Tour has struggled in recent years to find enough sponsors willing to ante-up big money (several million$ per event) to help fund each of the tour’s weekly events on the schedule. The Wells Fargo defection likely confirms that major corporate sponsors may have hit the wall as the costs of sponsoring a PGA Tour event may now outweigh the potential benefits to the company.
The Tiger Woods era is over, and interest in men’s professional golf is waning. A deflationary period for golf purses being paid to players should have been expected. At least prior to LIV Golf’s arrival on the scene, that is!
Prediction time – What is likely to occur?
Most likely – The merger with LIV Golf will finally get approved within the next month or so.
We already know that LIV’s Saudi sponsors have no problem with spending and losing a lot of money. They have done a bang-up job of overpaying for signing big name golf talent and losing money at each event. Yet, LIV Golf comes across looking like golf’s version of Richie Rich.
They have more money than you do, and they will remind you of that fact regularly.
If the PGA Tour’s cash resources are starting to run low, the proposed merger with LIV Golf should happen soon. I have doubts whether the PGA Tour has the financial strength to survive “as is” beyond the 2024 season.
The PGA Tour’s relationship with its television partners must be considered, too. Then again, the Saudis have plenty of money to buy-out any potential problems which might emerge with the PGA Tour’s television partners, too.
Less likely – Nothing happens – until there is a new PGA Tour Commissioner.
Current PGA Tour Commissioner Jay Monahan needs to prove to his employers (the PGA Tour golfers) that he is one of the most skilled negotiators of all time, or he deserves to be sent to the unemployment line soon.
Based on the lack of transparency and trust being shown by toward the PGA Tour golfers and fans of the sport, it may be time for new leadership to resolve some very difficult issues.
A myriad of rather complicated problems faces the PGA Tour and its golfers. They must be resolved in short order. Afterwards, a reassuring message needs to be effectively and sincerely communicated to the public to help restore the trust of rightfully-confused golf fans.
The current PGA Tour leader is an attorney by trade. Unfortunately, he has been less than persuasive and rather ineffective in building trust with his group of constituents.
In my opinion, the PGA Tour’s (over) ambitious plans to increase the 2024 tournament purses may be in serious danger. Current tour sponsors may be reluctant to cough up additional money to pay for increased purses with fewer “name” golf stars to offer at their Tour stop’s local fans.
Without an infusion of incremental cash (via a merger with LIV Golf or another investment company), the PGA Tour might have a lot of explaining to do by this time next year.
The clock is ticking.
Without a deal soon (either with LIV Golf or another third party investment company), the PGA Tour of 2023 will have even fewer top ranked golfers on its roster by this time next year.
After Jon Rahm’s recent defection to LIV Golf, the pressure is on the PGA Tour to quickly make a deal.
Buckle up for a wild and crazy 2024, golf fans!