Billy's Opinions · Jun 24, 2022

War of Worlds

The PGA Tour is much like the NFL. They've dominated their sports for decades with little serious competition. The NFL has seen upstart leagues vie for marketshare only to fold shortly after. Time and time again these leagues fail and typically for one reason... Money. It's been no different with the PGA Tour. Tours like the European Tour have found ways to coexist because in no way are they trying to compete. The monopoly the PGA Tour has enjoyed is undergoing an extreme stress test. Enter LIV Golf. This new "golf league" not only has a credible leader at the helm, Greg Norman, but all the money in the world to threaten the very existence of the PGA Tour.

It seems as if the LIV Golf Tour snuck up on the PGA Tour, but it's been in the works for quite sometime.

TIMELINE

Early 2021: Rumors swirl about the creation of a Saudi backed golf tour to debut in 2022

October 29th, 2021: Greg Norman is announced as LIV Golf Investments CEO. A 10-year deal is struck with the Asian Tour creating 10 new worldwide golf events and a commitment of $200 million dollars. Press Release

February 3rd, 2022: While at the Saudi International Tournament, Phil Mickelson publicly rips the PGA Tour for holding back money from its players. Suggesting players interest in competing tours. “If the tour wanted to end any threat, they could just give back the media rights to the players.” Phil Mickelson rips PGA Tour

February 17, 2022: Phil Mickelson is interviewed by golf journalist, Alan Shipnuck, and details his involvement in the formation of the new Saudi-backed tour. Quotes from the interview create a media firestorm against Phil Mickelson and anyone considering joining the tour. “They’re scary motherf*****s to get involved with,” Mickelson said. “We know they killed Khashoggi and have horrible record on human rights. They excute people over there for being gay. Knowing all of this, why would I even consider it? Because this is a once-in-a-lifetime opportunity to reshape how the PGA Tour operates.” Full interview

February 22, 2022: PGA Tour Commissioner, Jay Monahan, holds a mandatory players-only meeting where he informs players they will be barred from playing in any PGA tour sanctioned golf tournaments if they were to join the Saudi-backed tour. Meanwhile Phil Mickelson goes into hiding.

February 24, 2022: LIV Tour CEO, Greg Norman, writes letter to PGA Tour Commissioner accusing him of bullying and questioning the legality of banning players from the PGA Tour for participating in the new golf league.

March 16, 2022: LIV golf announces an eight-event schedule for the remainder of 2022 as well as $255 million in prize money. To the surprise of many, several of the planned events are to take place on US soil.

April 19, 2022: Robert Garrigus is the first player to request permission from the PGA Tour to partake in the first LIV Golf tournament.

May 6, 2022: Sergio Garcia stokes the fire of an already tenuous situation. After a questionable ruling following a lost ball, Sergio Garcia is caught on camera saying “I can’t wait to leave this tour.”

May 10th, 2022: LIV Golf announces scheduling for seasons 2023 thru 2025 and an investment of $2 billion dollars towards prize money. 2023 will have 10 events whereas 2024 and 2025 will have 14 events.

June 9 - 11, 2022: LIV Golf hosts first event in London. Charl Schwartzel takes 1st place and wins record $4 million dollars.

June 21, 2022: PGA Tour announces a new fall golf series for the fall of 2023 which will include the top 50 players from previous year’s Fedex Cup standings. Each event will have a purse of $20 million dollars.

THE MONEY

Well the LIV Tour is here and it seems it’s here to stay. Like I said earlier, upstart leagues typically fold because one reason and one reason only… money. People oohed and ahhed when Vince McMahon announced he personally invested $500 million in the XFL. Folks, that’s peanuts compared to the financial arm of the LIV Golf Tour. The Tour is Saudi-backed but more specifically the sovereign wealth fund of Saudi Arabia is personally funding all expenditures. The amount of money being pumped into this new golf league is unlike anything we’ve seen in sports.

For those who don’t know, Saudi Arabia is the 18th largest economy in the world, the largest exporter of petroleum, and currently sits on the second largest petroleum reserves. The sovereign wealth fund serves the purpose of investing on behalf of the Saudi Arabian government. It’s estimated that the fund has over $620 billion dollars in assets. So when people say the PGA Tour has a real problem, they ain’t kidding.

Since the inception of the LIV Golf Tour they have been spending money like a drunk college kid. They first announced that their inaugural 8 event season would have $225 million dollars worth of prize money up for grabs. For the first 7 events, each tournament will carry a $25 million dollar purse of which $20 million will go to individual prizes and $5 million to be given to the top 3 teams. In each event, the individual winner will be gifted a check for $4 million dollars whereas last place will get a check for $120,000. The 8th and final event of the season will be a team championship with a $50 million dollar purse. In comparison to the PGA TOUR, the first LIV Tour event took place the same week as the RBC Canadian Open. The LIV Tour event had a purse of $25 million while the Canadian Open had a purse of $8.7 million.

They then announced seasons 2023 thru 2025 will have $2 billion dollars worth of prize money up for grabs. You only understand the gravity of these dollar figures once you compare them to the PGA Tour.

If all the money listed above wasn't enough, the head of the Public Investment Fund announced following the first event that if anyone were to shoot a perfect 54 in a LIV Tour event he would award them a check for $54 million dollars. *LIV is the roman numeral for 54

On top of the crazy prize money, LIV Golf also wrote checks to acquire talent which has really turned golf upside down. The official dollar amounts haven’t been disclosed, but below are some of the rumored sums that have leaked through the media.

Phil Mickelson - $200 million

Dustin Johnson - $125 million

Bryson Dechambeau - $100 million

Ian Poulter - $20 - $30 million

The truly crazy part is Tiger Woods made $120 million dollars in career earnings on the PGA Tour with 14 major championships. Dustin Johnson has won two majors in comparison while getting stroked a check for $125 million just to join the LIV Tour and god knows how much he’ll make by actually playing. It's a good time to be a golfer.

THE PGA TOUR

Since the inception of the LIV tour, the media spotlight has for the most part focused on the Saudi money calling it “blood money” and chastising players for making the jump. What has gone unreported through it all is why so many players have a gripe with the PGA Tour. Having been a golf fan my entire life, I too have no idea how the PGA Tour operates. Let’s dig in.

The PGA Tour is classified as a nonprofit and over the years have been able to avoid hundreds of millions in tax payments while paying hefty salaries to its executives. If the PGA Tour is truly a nonprofit, it begs the question why are they so heated about a competing tour while their players are independent contractors and their sole purpose is to raise money for charity. On top of that, it’s reported that only 20% of its revenue goes to charity. In 2019, PGA Tour commissioner was paid after bonuses over $8 million dollars while the highest paid PGA Tour player made just over $9 million dollars. According to insidesources.com, the PGA Tour brought in $1.5 billion dollars of revenue in 2019 and has profited over $250 million in the three years before the Covid pandemic. The question quickly becomes where does all that profit go? According to Monahan, the PGA Tour has roughly $225 million dollars in reserves to which the players question why that money isn’t being redistributed back to its members. The PGA Tour had no plans to make major adjustments to the tour until big names like Brooks Keopka made the jump. The PGA Tour is now in full panic mode and are beginning to dip into those reserves as seen below.

THE FALLOUT

It’s fairly obvious that the PGA Tour was either blindsided by the new tour or they didn’t view it as a real threat. Regardless, golf is in for a facelift. When you look at the reaction from the PGA, it makes you think the PGA Tour is in fact undergoing an existential crisis. BUT like anything people tend to overact. I, Billy Dobson, firmly believe for several reasons that the PGA Tour will emerge a stronger tour as a result.

Having watched the first LIV Golf event I can say that in no way shape or form is the LIV Golf Tour threatening the PGA Tour. First off, the shotgun start is a horrendous idea. I personally like to watch the end of a golf tournament where leaders are stacked on the back nine leading to the crescendo of the event. You’re not going to get a finish like the latest US Open on the LIV Golf Tour. Watching Charl Schwartzel putt out for the win was a bit awkward when the entire field was still playing. It felt more like a top golf event than a professional golf tournament.

People are calling it a mass exodus of talent, but when you actually break it down it's a much different story. It’s more like players riding off into retirement.

Phil Mickelson: Aside from his recent PGA Championship win, Mickelson is almost unwatchable week to week. His need to hit “bombs” makes him look more like a weekend scramble partner than someone people are lining up to watch. Oh and he posted a three round total of 10 over par in the first LIV event. The $200 million spent on a 51 year old might go down as one of the worst contracts ever agreed to.

Brooks Keopka: Pretty boy, Brooks Keopka. You don’t have to be an avid golf fan to realize he’s on the back end of his career. Since Keopka’s last tour win at the Phoenix Open in 2021, he’s faded into oblivion. He’s battled what he calls a “sore knee” which has limited his appearances and his performance. Imagine Tom Brady sitting out because of a “sore knee”. Folks, if the PGA Tour is going to lose stars and I use that term lightly, Keopka would be one of the ones you’d want to lose. This is what retirement looks like.

Dustin Johnson: Here is the one player you could argue is a tough loss for the PGA Tour, but I’d disagree. Johnson’s star power has been diminished over the past two years and fresh off a marriage with a clearly demanding wife I’d be shocked if the LIV Tour doesn’t dump Johnson in the next 2-3 years.

Patrick Reed: I think I speak for most in the golfing world that Patrick Reed and his shark tooth necklace won’t be missed on the PGA Tour.

Bryson Dechambeau: The only thing interesting here is the romance between Bryson and Brooks Keopka.

Ian Poulter: The fact that the LIV Tour paid him roughly $20-30 million begs the question - do the Saudi’s actually watch golf? I wouldn’t tee it up with Ian Poulter if he paid me $10,000 let alone spend my free time watching him shoot a 77 on youtube.

As you can tell, the talent isn’t overwhelming by any stretch of the imagination. All the LIV tour has done thus far is blow a whole ton of money, put on a mediocre event, and pushed the PGA Tour into action. The new proposed tournaments by the PGA Tour and the increased purses will be plenty to retain its top talent. LIV Golf will continue to pluck low hanging fruit from the PGA which will only make the PGA Tour more competitive and more fun to watch. Best case scenario for the LIV Tour is it becomes the newest option sandwiched between the PGA Tour and the Champions Tour. I can’t remember the last time I woke up Sunday morning to watch the likes of Luke Donald, Stewart Cink or Rory Sabatini square off and those types of players will become their bread and butter. I’m not trying to pick sides, but people are attracted to tradition and history. We’ll find out over the next few years how much money the sovereign wealth fund is willing to spend. For the time being: long live the PGA Tour.

LIV GOLF GOING FORWARD

The format of the LIV Tour consists of 12 teams, 48 players, 54 holes, and shotgun starts. As of right now, each team is redrafted before each tournament and team captains are rotated in and out. Players are paid on individual performances as well as team performances. The upcoming schedule for the rest of the season is as follows: