When Kingdoms Combine
Rory McIlroy played decisive role in PGA Tour and Saudi Arabia's deal to reunite elite golf.
Eleven months ago, we covered the economics of professional golf, which had been turned upside down with Saudi Arabia’s funding of LIV Golf, a competitor to the PGA Tour.
With commissioner Greg Norman at the helm, LIV had just lured top players like Brooks Koepka, Dustin Johnson, Phil Mickelson, and Bryson DeChambeau to the new league via hundred-million dollar guaranteed deals and three-fold larger tournament purses. LIV was also about to land Australian Cam Smith, who would edge out Rory McIlroy at the 150th Open Championship at St. Andrews with an historic back-nine blitz.
On that very day, we asked, “Can Rory McIlroy overcome the Saudis and DOJ to unite golf's future?”
On Tuesday, PGA Tour commissioner Jay Monahan and Yasir Al-Rumayyan, governor of the $620-billion Saudi Public Investment Fund, said the rival leagues, locked in ferocious litigation, would drop the lawsuits and merge. In fact, that’s not quite right. It looks like LIV may actually just fade away.
The golf world was stunned. Not least, the PGA Tour players who had remained loyal to the American tour and declined giant, life-changing offers from LIV. Will the players who jumped to LIV for unimaginable sums, they asked, be allowed to return with no penalty?
Under the agreement, the PGA Tour will continue to operate its elite tournaments, mostly in the U.S., under its non-profit umbrella. But Monahan and Al-Rumayyan said they would also create a new for-profit entity and pool the tours’ commercial assets. Monahan will be CEO, Al-Rumayyan will be chairman, and the PGA Tour will appoint a majority of the board.
Players who left for LIV will be allowed to reapply for membership on the PGA Tour and the smaller European DP World Tour. The economics of their returns, however, are unknown. Will LIV players who pocketed tens or hundreds of millions for one and a half seasons be required to pay back some portion to rejoin the PGA Tour? Details so far are scarce.
LIV Golf may be able to claim a near-term publicity victory. In substance, however, LIV Golf events, which in one short year never gained mass appeal – in fact, they were nearly invisible – may vanish.
Anti-Saudi commentators are furious, but the PGA Tour may now enjoy a multi-billion-dollar boost.
McIlroy’s Decisive Influence
In the end, McIlroy was the key figure in uniting professional golf. He thrust himself into the public spotlight as defender of the Tour and its traditions. The hundreds of calls and meetings weighed on his golf. He played well over the last year but would likely have won more had he not so immersed himself in golf politics.
Moreover: if McIlroy had gone to LIV, or if merely two or three more elite players – some combination of John Rahm, Scottie Scheffler, Jordan Spieth, Justin Thomas, Tony Finau, Cam Young – had decamped for LIV, the equation could have been reversed. LIV may have had the upper hand, and any reunification would have taken place on LIV’s terms. The PGA Tour may have collapsed and ceased to exist.
Instead, McIlroy’s leadership, which helped keep these top players in the PGA Tour fold, was probably the razor thin marginal factor favoring the PGA Tour.
When LIV’s events failed to generate widespread interest, and when the initial outflow of top players failed to convince a second wave of PGA Tour players to follow, LIV’s momentum stalled.
Saudi Arabia could have continued funding LIV, and multiple lawsuits, indefinitely. But LIV was never Saudi’s primary objective. Its goal is to be a major player in global golf. When the PGA Tour stemmed the outflow of players by doubling and tripling the purses of many of its own tournaments, it mostly matched LIV’s main attraction.
But for how long could the marginal PGA Tour sponsor dish out the extra tens of millions required by the new, far larger purses? Unlike the Saudis, most PGA Tour sponsors demand some quasi-quantifiable near-term economic return for their investments. Yes, the PGA Tour appeared to have the upper hand in the substance of litigation, but it still dreaded annual $20-million legal bills for years to come. The table was set to end the fracture. LIV had served the Saudi’s purpose. It cracked the fortress of professional golf and forced a seat at the head table. Saudi Arabia achieved its goal.
But so, maybe, did the PGA Tour. If the basic outline holds, the PGA Tour retains its governing role and its long, uninterrupted history. Elite professional golf is reunited. Jack Nicklaus, Tiger Woods, and Rory McIlroy will, by their moral authority, run the show, instead of Greg Norman. All the best players will once again compete in the same tournaments. And, not least, several billion dollars of PIF capital will buttress the game for years to come.
Against unlimited Saudi money, this may have been the best the PGA Tour could hope for. Had McIlroy, Rahm, Spieth, Scheffler, or Thomas not chosen long-term value over short-term cash, the equation would have flipped. Railing against dirty Saudi money may feel good. But even Jimmy Dunne, the American patriot, Augusta National member, and supreme golf booster who lost most of his Wall Street firm on 9/11, supports the deal. Because he understands it’s far better than the alternative.
A dozen factors could change as the details are finalized. But the short yearlong fracture of professional golf is a blip compared to almost any nightmarish alternate history. If not for Rory McIlroy, it all could have looked very different.