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LIV Golf turning away top-50 players as it shifts business model to 'league' format for 2023

July 27, 2022
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Players practice on Wednesday at Trump National Bedminster ahead of this week's LIV Golf Invitational event.

Mike Stobe/LIV Golf

BEDMINSTER, N.J. — As LIV Golf rolls into New Jersey this week for its third event, executives are beginning to shed light on two main questions surrounding the upstart circuit: How it plans to proceed in the near future—shifting to a league format for 2023—and who precisely it will be proceeding with.

As the rumor mill continues with speculation, half-truths or flat-out lies about more PGA Tour players leaving for LIV, sources say the opposite problem has surfaced: There may not be enough spots left at LIV for interested players. Multiple managers from different agencies have told Golf Digest that while some openings may remain, the vast majority of the 48 league spots are spoken for—so much so that LIV has turned away multiple top-50 players who have expressed interest in a potential contract. LIV is believed to have secured additional commitments from players who will announce their decisions shortly after the conclusion of the PGA Tour season in August, and the Saudi-backed league is factoring those future commits into its numbers for next season.

“I can’t imagine they want to bounce guys or explore buyouts and such,” says one agent, “as that doesn’t send the right message to those who committed early, and it doesn’t send the right message in general about stability. Players-wise, they’ll be better served to let it play out over a couple of years to get the 48 to the place they want it.”

A source close to LIV also said that multiple players who turned down lucrative offers from LIV before the first event in London have now re-engaged discussions but are finding the offers to be significantly less than they were initially.

Throughout this inaugural season, LIV’s dealings have seemed a bit … scrambled. The first two events featured different players, different teams, different captains. This third one, at Trump Bedminster 50 miles outside of New York, will have more new faces, reconfigured teams and new broadcasters. If it feels like they’re figuring it out on the fly, it’s because they are. LIV executives repeat ad nauseum that this upstart organization is in its “startup” phase. This is beta testing. Trial and error. But things are about to get a lot more uniform in 2023, with LIV officials announcing on Wednesday the transition to a 14-event league schedule, with the same 48 guys teeing it up in them all, representing the same 12 four-man teams. The LIV Golf League will announce the full slate of events at a later date, but the schedule is expected to include stops in North and Latin America, Asia, Australia, the Middle East and Europe.

Having 12 quality and consistent teams is crucial to LIV’s business model. And there is, in fact, a business model. Much has been written about the Saudi Arabian government’s attempt to “sportswash” its reputation via golf. That is certainly an ancillary benefit, should this go well. But this has always been and will continue to be viewed by LIV officials as a for-profit enterprise.

“I’ve worked in sports business for a long time,” says Atul Khosla, who left his post as chief corporate development and brand officer of the Tampa Bay Buccaneers to become LIV Golf’s president and COO. “And if you look at the investment portfolio or our primary investor, the Public Investment Fund, they have invested all over the world in incredibly large businesses and profitable businesses. Their view of this is no different. That’s the expectation that we have from our board.

“Like any other startup, do we have upfront costs to get the product off the ground? Yes, we do. It’s no different than a burn rate that an Uber may have, or any other startup tech might have to get a product off the ground with a vision of disrupting a space. We are fortunate, of course, to have an institution that has the patience to be able to go through this methodically and in the right fashion.”

How, then, will LIV begin to turn a profit? Khosla said LIV is “in the throes” of figuring out a media side to the business; ostensibly that will include a traditional money-for-broadcast-rights agreement, whether with a traditional television network or a streaming platform. He said he has already received interest from potential corporate partners, some of whom have been elbowed out of the golf space by competitors. There is, however, still some uneasiness over the long-term viability of LIV Golf among advertisers, and LIV expedited its shift to a full league schedule in part to demonstrate the staying power and legitimacy of the product.

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The finishing touches were going up on Wednesday as Trump National Golf Club Bedminster prepares to host this week's LIV Golf event.

Mike Stobe/LIV Golf

“We’ve compared ourselves, and others have compared us, to the Formula 1 model,” says Ron Cross, LIV’s Chief Competitions Officer, who spent more than two decades working at the PGA Tour and an additional eight years at Augusta National. “When you go to an F1 race, it’s consistent with the look and feel. But Austin has some uniqueness to it, so does Monaco, and Spain, other markets. You’ll find us doing the same thing, where you’ll come on sight and feel and see Golf, But Louder on a consistent basis, but we’re going to do something different in New York than Miami than Chicago. But as a fan, you’ll feel that these are LIV Golf events.”

And, crucially, LIV plans to sell the 12 teams to ownership groups, who would then have significant control over the management of their team. These owners could be individuals—there is no shortage of wealthy golf-lovers who’d cut a check to feel close to the players and the action—or they could be corporations, as is the case in Formula 1, which LIV executives constantly cite as the loose model.

“Eventually there’s a valuation for those 12 teams,” Khosla says. “There’s equity being held by the league, there’s equity being held by the players. There will be a chance to get additional investors if one wants to dilute their initial investment, that is classic work that happens in sports today. Teams get valued, teams get sold. We are introducing that concept into golf.

“It’s not a novel concept. Fans understand teams, it’s second nature. We grew up playing team sports. But it is fundamental to how the model will play itself out, and the players are absolutely bought into it.”

Bought into it, both literally and figuratively. Players with equity in their teams—it’s safe to assume that the more high-profile players and team captains like Phil Mickelson, Bryson DeChambeau and Brooks Koepka are included among that group—now have a vested interest in building their sides, for strong brands are more valuable brands. In their introductory press conferences on Wednesday, Charles Howell III, Jason Kokrak and Paul Casey all said they were recruited by existing team captains to join the league, and LIV has encouraged its players to spread the word and bring their friends over to this very well-funded party.

The party will, eventually, have to turn a profit if it is to keep raging. The PIF’s $500-plus billion war chest ensures LIV a much longer runway than your quaint two-guys-in-a-garage startup, but it is not endless. Still, LIV Golf will continue to hold tournaments that compete against PGA Tournaments for the foreseeable future, making 2023 a preview of the dynamic in men’s professional golf for the foreseeable future.

“It’s hard to put a line in the sand, and we haven’t been asked to do that,” Khosla says of a timeline for profitability. “We’ve been asked to show how we would build something, which we are doing. Four months ago we were at a very different place where we were questioning how this would get off the ground this year, and today we’re at a place where we’re announcing the desire to have a full schedule. We’ve seen the trajectory change.”