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Attention, LIV Golfers!
“This is your captain speaking. Fasten your seat belts as we are now entering some extremely turbulent air…for at least the next few months”.
That’s because the attorney for former world #1 golfer Jon Rahm told the Chapter 11 bankruptcy court in New Jersey on Wednesday that his client is not returning to LIV Golf. Rahm apparently was underwhelmed with the proposed “LIV Golf 2.0” model.
Jon Rahm has left the building.
Multiple media outlets report that LIV Golf is currently negotiating a release for Rahm which could take effect within a matter of weeks.
Jon Rahm signed a multi-year deal to play for LIV Golf beginning in 2024. The total value of the agreement was estimated at $300 million.
For purposes of this story, let’s assume that Rahm has received at least half of that guaranteed amount. He also pocketed nearly $80 million in LIV Golf tournament earnings over the past three seasons as the top winner since joining the tour.
Jon Rahm doesn’t seem to care that much about the money at this moment. He appears to be wanting a chance to compete more often against today’s elite golfers.
Rahm likely misses the competition. His second place finish at last spring’s PGA Championship reminded fellow golfers that Jon Rahm is still a threat every time (or anywhere) he tees it up.
The Spaniard wants to earn a chance to play for the European team in next September’s Ryder Cup matches. He is most likely to play the 2027 golf season on the DP World (European) Tour. A win and/or a handful of high finishes next year will earn “Rahmbo” a spot on the Ryder Cup team.
Wednesday’s announcement about Jon Rahm leaving was not exactly unexpected to anyone who has followed LIV Golf this year. The 31-year old golfer seemed to be growing more and more unhappy about LIV Golf’s financial woes over the past season.
Adios, Sergio Garcia!
Another Spanish golfer has been given his release by LIV Golf this week. Sergio Garcia was one of the first major stars to sign with LIV Golf five years ago. His signing bonus was for an estimated $40 million.
The bankruptcy court quietly granted Garcia the right to skedaddle from financially troubled LIV Golf. Garcia also wants to earn a spot on next year’s European Ryder Cup team. He has already played in a few DP World Tour events since LIV’s final tournament in late August.
Sergio Garcia posted two wins in five seasons on the LIV Golf tour. He has been the captain of LIV Golf’s Fireballs four-man Spanish golf team since the league’s inception.
Who’s next?
Expect issues surrounding LIV Golf’s bankruptcy hearing to get stickier in the weeks ahead.
Jon Rahm’s departure makes popular two-time US Open winner Bryson DeChambeau and Australia’s Cam Smith (2022 Open Championship winner) the next big question marks for LIV Golf.
The 32-year old DeChambeau signed a $125 million deal with LIV Golf five years ago. His contract expires on December 31.
DeChambeau has indicated a strong desire to remain with LIV Golf if the league successfully emerges from bankruptcy.
At the right price, though.
Media reports circulated that Bryson DeChambeau was rumored to be seeking upwards of a $500 million financial package to remain with LIV Golf. That chatter happened before Saudi Arabia’s Public Investment Fund announced their decision to pull the plug on LIV Golf this year.
The Saudi PIF has lost an estimated $6 billion over five years on LIV Golf.
Australia’s Cam Smith signed with LIV Golf beginning in 2023. His signing bonus was for a reported $140 million. Smith’s contract has at least one more year remaining.
Cam Smith is the captain of LIV Golf’s popular all-Australian team named “The Rippers.” LIV Golf’s annual stop in Adelaide, Australia has been the most successful tournament event for the past two seasons.
Cam Smith and his Aussie mates remain very important to LIV Golf 2.0. The league plans to focus more on its international successes and less time in the US.
I owe! I owe! Through bankruptcy we go!
The Saudi Public Investment Fund (PIF) lost billions on its gamble to finance LIV Golf. They were supposedly done with LIV Golf after the 2026 season ended in late August.
Oddly, the PIF later agreed to front LIV Golf another $50 million this fall to keep the lights on during the current bankruptcy proceedings. That $50 million is considered by the bankruptcy court as a “loan” which will receive top priority for repayment if LIV Golf emerges from Chapter 11.
LIV Golf owes a lot of money to its golfers, support and operational staff, vendors, contractors, corporate partners, and even several tax authorities.
This week’s Chapter 11 bankruptcy hearing in New Jersey revealed that LIV Golf owed $45 million to its own golfers! Jon Rahm ($7.5 million) and Bryson DeChambeau ($5.8 million) lead the list of players hoping to receive a percentage of their unsecured claims.
Another $20 million is owed to others which have provided tangible goods and services to LIV Golf.
Some parties are hoping to receive all or some portion of money owed. Others (such as the golfers) may be willing to accept an ownership stake in the “new” LIV Golf 2.0 in lieu of receiving cash.
There is a lot of wheeling and dealing happening right now.
Let’s meet LIV’s Golf’s Chief Restructuring Officer
His name is David Orlofsky. He wants the New Jersey Chapter 11 bankruptcy court to believe that LIV Golf was actually on its way up and simply needed more time.
He said, “LIV Golf firmly believes that, with appropriate funding and a level playing field with its competitors, its existing operating model would have reached profitability within five to seven years, primarily through continued revenue growth across both the League and its teams…”
(Note – Emphasis was added in three of the above phrases)
Q – What does he consider to be “appropriate funding?”
The Saudis were losing $1 billion per year – every year – for the past five seasons. LIV Golf’s tournament payouts were far too high. The costs of taking their golf tournaments around the world were exorbitant, too. How much more money would David Orlofsky consider to be “appropriate”?
Q – What did he mean by a “level playing field with its competitors”?
LIV Golf effectively declared “war” on the PGA Tour and the DP World (European) Tour by offering more than $1 billion in guaranteed signing bonuses to secure several of the top PGA and DP World Tour players. All is fair in love and golf wars, right?
LIV Golf cannot whine today that the PGA Tour and the DP World (European) Tour would not open their tournaments to LIV Golf professionals to freely return and play in any event. Why should they?
LIV Golf’s spokesman is, perhaps, taking aim with his “blame gun” at the World Golf rankings.
LIV Golf initially played 54 hole tournaments until Year #5 this season.
The World Golf rankings organization (which is not owned by either the PGA Tour or the DP World Tour) refused to award points to LIV events because of their 54-hole tournaments (compared to 72) and a reduced field of 54(ish) players featuring no cuts.
So, LIV changed to a 72-hole format in 2026. The World Golf ranking body responded by awarding points to only the top ten finishers in LIV Golf events starting this year.
Q – Does David Orlofsky truly believe that LIV Golf “would have reached profitability in five to seven years”?
LIV Golf commendably added several new corporate sponsors in the past year. The relative value of those sponsors is still rather small compared to those backing the PGA Tour.
Did you know that the PGA Tour derives more than 60% of its revenues through television? LIV Golf earned only 5% of its much smaller revenue pool from television.
Now, who’s fault would that be?
The bankruptcy court may start to look like a Jersey deli with all of the baloney being peddled by LIV Golf.
Jon Rahm made the right move – for Jon Rahm
LIV Golf probably could not afford to pay Jon Rahm’s remaining contract value regardless of his relative importance to the upstart golf tour.
An amicable divorce appears to be a “win/win” for both parties over the long term.
LIV Golf 2.0 may eventually emerge from bankruptcy in a few months. They will face incredible scrutiny from potential corporate partners, suppliers, vendors, and, of course, the golfers moving forward.
The five year run of LIV Golf has been entertaining to watch. Team competitions within each event have been a big hit with fans and the players. LIV Golf events have attracted a younger in-person audience than the PGA Tour with more fan interaction and live music while play is underway.
However, LIV Golf was irresponsibly extravagant with its spending. It was an economic disaster from its inception.
Will a restructured LIV Golf 2.0 become successful by focusing on its current niche (playing events in underserved international markets and continuing its team competitions)?
Are enough of LIV Golf’s top stars going to stick around so that golf fans will remain interested in their product?
Will LIV Golf 2.0 be able to live on a tight budget and, eventually, turn a profit with a new business plan which has yet to be made public?
LIV Golf must first escape from the very deep sand trap called “Chapter 11 Bankruptcy” and card no worse than a par on this tricky hole.
Easier said than done.