Follow the Money: LIV-PGA Tour Merger Just the Beginning

The news seemed shocking when it broke on Tuesday morning, but knowing the mantra of sports business (and all business), “Follow the money,” is not a great shock.  

The PGA Tour knew or was advised of three key areas:

• LIV, funded by the $600 billion Saudi Public Investment Fund (PIF), was not going away.
• LIV’s antitrust lawsuit, not scheduled for trial until 2024, would be hard to defend as tens of millions of legal fees mounted.
• Pre-trial discovery, in that case, could have been damaging, perhaps finding an uncomfortable answer to how the PGA Tour miraculously came up with multiple $20 million purses after LIV’s emergence. Faced with these realities, the PGA Tour took the money and merged.

PGA Tour Commissioner Jay Monahan (whom I worked with at Woolf Associates in the late nineties) certainly has some explaining to his golfers, some of whom were finding out about the merger on social media. 

I understand the need for privacy with a massive consolidation such as this, but Monahan also walked back some pretty profound statements about LIV. He was steadfastly antagonistic to both the Tour and the golfers who defected.  

He invoked some deep morality plays, saying that PGA Tour golfers, unlike LIV Tour golfers, didn’t have to question their character.  Monahan now accepts a merger while retaining his CEO title, which, obviously, was important to him.

Since this started, the PGA Tour would be better working with LIV than against LIV. 

This was different from an upstart football league like the XFL, USFL, or AAF, never in a similar financial orbit to the NFL. 

LIV Golf was a competitive entity in a better financial position than the PGA. LIV was only going to buy up more PGA golfers. The Saudi-backed tour could potentially infringe on more PGA Tour venues, sponsors, and Tour broadcast networks (unless shut out by the PGA’s antitrust-violative behavior).  

In the end, the PGA snuffed out the competition by joining them.

There is a bigger picture here.  

Saudi money, Qatari money, and other Middle Eastern investment are coming to bigger American sports. 

These entities have invested in English Premier League Soccer and Formula One Racing; their American toehold is now golf which, in some ways, they now own.

The price of entry into the Core Four American sports leagues — NFL, Major League Baseball, NBA, NHL —  is becoming too high now to rely on a cadre of multi-billionaires to purchase them.  

Josh Harris is one of those billionaires.  

He owns an NBA (76ers) and NHL franchise (Devils) but is struggling to secure proper financing for the NFL’s Commanders’ $6 billion price tag.  

With institutional investing allowed, PIF, among others, would not be a problem. The NBA has loosened investment restrictions to allow for sovereign wealth funds; other leagues will soon follow.

LIV is now a part of the PGA Tour and represents an inflection for sports finance.  Human rights issues and politics notwithstanding, Saudi money is coming to American sports leagues.  

Maybe not this year or even next year, but soon.  

Count on it.

Andrew Brandt is a prominent voice and thought leader in sports law and business.  Having had decade-long careers as a player agent and Vice President of the Green Bay Packers, Brandt is now Executive Director of Sports Law/Business at Villanova University.  Brandt also has a weekly podcast, “The Business of Sports,”  writes a regular column for Sports Illustrated, and delivers a weekly newsletter, the Sunday Seven.