LIV Golf’s Bankruptcy Road Is Unlike Its Predecessors

LIV Golf is looking elsewhere around sports for inspiration in its attempt to reorganize under Chapter 11 bankruptcy protection, but its unique attributes and relative youth make comparisons to industry predecessors more difficult.

After LIV Golf filed for bankruptcy protection late Tuesday, CEO Scott O’Neil issued a letter to fans citing several other sports teams that also went through bankruptcy proceedings.

“Plenty of well-known companies have taken this path before us, including Marvel Entertainment, Delta Airlines, and Caesars Entertainment, along with sports franchises like the Los Angeles Dodgers, Pittsburgh Penguins, and Leeds United F.C,” O’Neil wrote. 

It’s not surprising that O’Neil would cite companies and teams such as these as examples. Those six entities are each in a vastly stronger position now than they were before. In particular, the Dodgers are MLB’s two-time defending World Series champion, and an economic colossus to the point of impacting ongoing labor negotiations between the league and MLB Players Association. Marvel, meanwhile, is a dominant entity across pop culture in its current existence as a Disney subsidiary and sister company to ESPN. 

Along similar lines, O’Neil wrote the filing was “designed to build a stronger and more sustainable future for LIV Golf.”

Those entities that O’Neil cites, however, have enjoyed structural advantages, even during bankruptcy, that LIV Golf simply doesn’t have. Among the specific points of differentiation:

• The Dodgers’ bankruptcy filing in 2011 wasn’t primarily driven by anything fundamentally amiss with the club’s business, or MLB at large, but rather financial mismanagement and marital discord involving former team owners Frank and Jamie McCourt. Once the Mark Walter-led Guggenheim Baseball Management took over in 2012 after a then-record $2.15 billion purchase, the Dodgers quickly became the industry power on and off the field they still are. Through all of that, the Dodgers also were assured of their standard 1/30th share of national MLB revenue, like any other team in the league, and retained much of the power of their legendary brand—honed in part from winning the first six of their nine World Series titles by then. 
• The Penguins’ bankruptcy filing in 1998 had somewhat similar overtones. Under the leadership of former owners Howard Baldwin, Morris Belzberg, and Roger Marino, the impact of the 1994-95 labor lockout, an unfavorable lease at the outdated Civic Arena in Pittsburgh, and a run of deferred salaries signed earlier that decade caught up with the club. It led to the team being purchased out of bankruptcy by former team star Mario Lemieux and business partner Ron Burkle. Lemieux converted the majority of the money owed to him to equity as part of the acquisition, and through a 2000 comeback to the ice, also became the first owner-player in NHL history. During the saga, the team also continued to enjoy a baseline of incoming national revenue and the local fan passion in one of the NHL’s top markets, fueled by the first two of their five Stanley Cup titles. 
• Leeds has had a more up-and-down situation, moving around various levels of the English football pyramid over the past two decades as part of that country’s promotion-and-relegation system. Financial troubles also long followed the club, even after winning a first-division title in 1992 before that entity became the Premier League. The club then entered administration, a similar level of insolvency as bankruptcy, in 2007. Under the current ownership, led by 49ers Enterprises, the club is on much stronger footing, and currently is ninth in the Premier League standings. Through it all, though, the club has operated with an extensive historical lineage dating to 1919. 

LIV Golf does not have that same level of future contracted revenue, prior history after just five seasons of play, or the breadth and depth of fan support to help fuel a turnaround. Its estimated assets of between $100 million and $500 million are far less than the comparable figure of up to $1 billion for the Dodgers from their bankruptcy filing more than 15 years ago. 

Rather, LIV Golf is starting again, largely from scratch, and it’s now envisioning a new business structure for the “2.0” version of the league that will be majority owned by players. In the meantime, though, no definitive decisions have been made about the 2027 schedule or individual events within it. 

“Transitions are rarely easy, but they are powerful when you know where you are going. And we do,” O’Neil wrote.