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Saudi Arabia's golf takeover casts shadow over sports world
Major sports leagues are vulnerable to the kingdom’s limitless resources and boundless ambition.
On Tuesday, June 6, the U.S.-based Professional Golf Association (PGA) announced plans to merge with its Saudi-funded rival LIV Golf in an attempt to “unify the game of golf.”
“The parties have signed an agreement that combines PIF’s golf-related commercial businesses and rights (including LIV Golf) with the commercial businesses and rights of the PGA Tour and DP World Tour into a new, collectively owned, for-profit entity,” the statement read.
The shocking announcement effectively put an end to the bitter battle for control of men’s professional golf. And while PGA Tour commissioner Jay Monahan positioned the merger as “transformational partnership,” it was effectively a hostile takeover that placed the popular sport in Saudi Arabia’s hands.
It also served as a cautionary tale for other major sports leagues, many of whom are vulnerable to the kingdom’s limitless resources and boundless ambition.
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LIV Golf, which is financed by Saudi Arabia’s Public Investment Fund (PIF), officially launched in June 2022 and immediately began disrupting the men’s game by poaching some of the biggest names in the sport, including Phil Mickelson, former world number one Dustin Johnson and reigning PGA Championship winner Brooks Koepka.
The emergence of LIV Golf created a distinct schism within men’s golf. In July 2022, four-time major winner Rory McIlroy candidly told CBS that “if LIV went away tomorrow, I’d be super happy.” Tiger Woods was also critical of the breakaway organization and reportedly turned down a breathtaking sum of money to play in the league.
The two rival tours were also involved in a series of legal disputes, including an anti-trust lawsuit against the PGA Tour that was scheduled to be heard in 2024. Naturally, the newfound merger will put an end to all pending litigation.
The new entity will also benefit from “capital investment” from the PIF, which is chaired by Saudi Crown Prince Mohammed bin Salman. The newly created PGA/LIV entity will also be chaired by Yasir Al-Rumayyan, one of MBS’s closest associates.
Al-Rumayyan is one of the most influential businesspeople in Saudi Arabia. He currently serves as the governor of the PIF, the chairman of Saudi’s state-owned oil giant Aramco, and the chairman of Newcastle United, the English Premier League team owned by a consortium that includes the PIF. His involvement in the new PGA/LIV venture suggests that the kingdom is now in control of the sport.
Commissioner Monahan, who previously claimed that the PGA Tour and LIV Golf “won’t come together and they can’t co-exist,” told the Financial Times that he began to trust Al-Rumayyan “10 minutes after sitting down with him in Venice."
Under the terms of the agreement, the PGA Tour will hold a majority voting interest in the combined entity and Monohan will serve as chief executive. However, the PIF will have the exclusive rights to further invest in the new entity, including a right of first refusal on any capital that may be invested.
Though the full details of the agreement are yet top be revealed, it is evidently clear that Saudi Arabia managed to bring about the capitulation of a major U.S. sports organization in the span of a year by spending billions of dollars on a rival organization and subsequent litigation. Given the prospect of a lengthy battle against an enemy with endless resources, it is unsurprising that the PGA seemingly surrendered to a lucrative merger.
“We are pleased to move forward, in step with LIV and PIF’s world-class investing experience, and I applaud PIF Governor Yasir Al-Rumayyan for his vision and collaborative and forward-thinking approach that is not just a solution to the rift in our game, but also a commitment to taking it to new heights,” Monohan added in his statement. “This will engender a new era in global golf, for the better.”
Saudi Arabia’s sports ambitions are unlikely to stop at golf. The kingdom’s sovereign wealth fund has already purchased a controlling stake in Newcastle United and is currently in the process of seducing some of the world’s best football players to join Cristiano Ronaldo in its national league. According to The New York Times, the effort could be worth more than $1 billion in wages for 20 foreign players.
The kingdom also reportedly considered an attempt to add the Formula 1 to its portfolio of sports assets, valuing the motor racing organization at more than $20 billion. Stakes in other major U.S. sports entities and teams could be in the kingdom’s sights, including Major League Baseball (MLB), Major League Soccer (MLS), and the National Basketball Association (NBA).
In an apparent sign of changing tides, some of Saudi Arabia’s most vocal critics appears to have come to terms with the kingdom’s growing influence in their sports.
McIlroy—one of the PGA’s most outspoken loyalists—spoke to the media on Wednesday ahead of the Canadian Open, where admitted he resigned to the fact that Saudi Arabia is going to be involved in golf.
“Whether you like or not, the PIF are going to keep spending money in golf,” said the four-time major winner. “At least the PGA Tour now controls how that money is spent. If you’re thinking about one of the biggest sovereign wealth funds in the world, would you rather have them as a partner or an enemy?
Saudi Arabia's rise as a dominant force in the world of sports is a direct consequence of leagues forging unsavory alliances and cozying up to authoritarian regimes. Unless sports organizations face consequences for their relentless pursuit of profit, the kingdom will continue to cast a long shadow over the industry.
As McIlroy astutely pointed out during his press conference: “Money talks.”
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