BREAKINGVIEWS-Warring golf leagues could use a backroom deal

By Jennifer Saba

NEW YORK, March 14 (Reuters Breakingviews) - The PGA Tour and Saudi Arabia Public Investment Fund-backed LIV Golf are stuck in a sand trap. The warring professional leagues announced a shock merger plan nearly two years ago. Yet negotiations have yet to make headway. Appealing to President Donald Trump might finally get things moving. It’s bad for competition, but probably good for the sport.

The links-loving-commander-in-chief in February held meetings involving PGA Commissioner Jay Monahan and player Tiger Woods, as well as PIF Governor and LIV head Yasir Al-Rumayyan. The objective was to heal a rupture opened by deep Saudi pocketbooks.

Launched in 2021, LIV sought to shake up the sport, mirroring the Kingdom’s incursion into Formula 1, tennis and soccer. LIV lured away 54 players, with stars Jon Rahm and Brooks Koepka leaping at contracts worth $300 million and $130 million, respectively, according to Fox Sports. A rancorous fight ensued: the PGA Tour suspended LIV players from its roster, drawing lawsuits. LIV backed the players; the PGA Tour countersued. The merger announcement put an end to the court hostilities.

Yet golf’s bifurcation remains, splitting the audience. The PGA Tour’s television ratings on Sundays last year were down 19% from 2023. LIV’s audiences are even smaller. A September championship attracted a paltry 89,000 viewers on the decidedly minor CW network.

Media rights are where the money is, and leagues have a weaker negotiating hand when viewership drops. That makes the popularity contest crucial to recouping almost $5 billion the PIF is on track to invest in LIV, according to USA Today’s Golf Week.

The PGA Tour has support to continue fighting. A group including New York Mets owner Steven Cohen last year acquired a 11.6% stake for $1.5 billion at a post-money valuation of $13 billion. That represents 7 times the PGA Tour’s 2023 revenue of $1.8 billion, in line with the value garnered by some Major League Baseball teams.

Ending the stalemate will be difficult. The PGA Tour’s ratings are starting to stabilize — the final round in Pebble Beach in February was the highest rated event in four years with super star Rory McIlroy taking the trophy. Yet, reintegrating LIV players with those who stayed loyal is one sticking point. The PGA Tour moved to give members equity awards since the competitor came on the scene. PGA Tour participants are paid largely out of tournament winnings; LIV offers fixed contracts.

The President has his own interests. The Trump family’s Doral resort will host a LIV tournament in April, a venue the PGA Tour departed. Trustbusters under President Joe Biden had begun investigating a potential tie-up. A friendlier administration could defuse that threat. After all, combining the PGA Tour and LIV really would nix competition. The problem is that letting two players rack up strokes just buries the business deeper in a bunker.

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CONTEXT NEWS

President Donald Trump initiated a meeting on February 20 with delegates of the PGA Tour and Saudi Arabia Public Investment Fund’s LIV Golf, a rival league, according to the New York Times. The two organizations agreed to a framework to merge in June 2023.

PGA Tour Commissioner Jay Monahan told Golfweek on March 5 that he envisions a role for PIF Governor and LIV Chairman Yasir al-Rumayyan on the non-profit’s board.