124th U.S. Open

Pinehurst No. 2

Money Matters

LIV Golf’s new TV deal is about branding, not return

January 21, 2023

Absorb those first viewership numbers from the CW Network's LIV debut at Mayakoba next month with the appropriate grain of context.

Andy Lyons

Follow the LIV saga and you’ll see one phrase studded throughout the coverage: business plan. As in, “How does paying players hundreds of millions without much revenue fit a sane business plan?”

This week’s announcement of a deal between LIV and The CW Network to broadcast the 2023 LIV schedule in the United States inspires the same kind of commentary. It’s easy to sniff at a network with no history of sports programming or any kind of live coverage and point out that the deal doesn’t do much to answer the persistent revenue questions. After all, “only” about 80,000 viewers watched an average LIV tournament round on YouTube last year when anybody with access to an Internet connection could tune in.

If you’re looking at it through the lens of traditional business metrics like revenue growth and return, you wouldn’t invest. But the Saudi Public Investment Fund (PIF) is likely playing a different kind of game. A representative avatar for the LIV play might be what the Kingdom has done in F1 racing. Saudi Arabia pays $55 million per year to host a race and is building an opulent new track in the $1 billion Qiddiya entertainment hub in Riyadh. By the time that track comes online in five years, the Kingdom is hoping that its $660 million investment in iconic sports-car brand Aston Martin and its related F1 race team will encourage most of that sport’s teams to relocate their permanent bases to Saudi Arabia. Other comps? The PIF spent $300 million in 2021 to buy a controlling interest in Premier League soccer team Newcastle United and immediately spent another $200 million to improve the team and close out its debt. In the same year, it made a $1 billion investment in Swedish gaming company Embracer to go with its ownership share in Nintendo. Call it an entertainment portfolio.

The PIF doesn’t need the money or the short-term return on investment, and it doesn’t need the exposure. What it needs is the positive branding—and to become a part of the established “premium entertainment” infrastructure, which makes contracts like the ones Phil Mickelson or Bryson DeChambeau signed to play golf for LIV look much more like a (small) marketing expense for a $620 billion company that had $60 billion in revenue in 2021. To compare, Apple is a $1 trillion company with $400 billion in revenue and spent an estimated $100 million last year just on Twitter ads.

The dollars spent on LIV player contracts and received in television deals from networks the PIF could buy with its spare change are literally drops in an enormous bucket—and almost certainly part of a larger play, like disrupting the PGA Tour until it gets the seat it wants at the big table, so absorb those first viewership numbers from the CW’s LIV debut at Mayakoba next month with the appropriate grain of context.