The LIV-PGA Merger, Explained

Controversy Surrounding LIV Golf

Since its inception, LIV Golf has been at the center of controversy because of its Saudi Arabian connection. LIV Golf, which was founded in 2021, is funded by the Public Investment Fund or PIF. The PIF is among the largest sovereign wealth funds in the world with assets amounting to over $600 billion. A sovereign investment fund is a state-owned investment fund. The PIF is owned and managed by the Saudi Arabian government and in particular Crown Prince Mohammed bin Salman.

Many have protested the golf organization. Skeptics of the golf organization have suggested that this is all part of an effort from the Saudi government to better its public image. Human rights groups have questioned the Saudi government's motives and have accused them of sports washing. Most of the backlash comes from the Saudi monarchy being responsible for countless human rights violations.

In light of the controversy surrounding LIV Golf and its Saudi Arabian connection, the recent announcement of the merger with the PGA Tour adds another layer of complexity to the situation. While the merger presents new opportunities and challenges for both organizations, it also raises questions about the influence of the Saudi government on a well-established American institution.

The Merger

Many golfers including Phil Mickelson and Brooks Koepka took deals with LIV Golf because of the massive payouts offered which far surpassed any amount of money that could be made on the PGA Tour. Beyond the money, many of the rules and attitudes displayed at LIV Golf tournaments were appealing to both fans and players. These events in comparison to the PGA Tour are far less strict with music being played and more relaxed dress codes. No golfers are cut from the LIV tournaments whereas the PGA has a tradition of cutting the players with the worst scores after two rounds. There are many reasons that LIV is a more attractive option. However, the relationship between these two organizations has not been healthy until the announcement of this merger. Players who signed with LIV Golf were forced to retire from the PGA and were told they would never compete in the organization again.

On June 6th, the PGA Tour and LIV Golf both announced the creation of a new entity combining the assets of both organizations. The PGA will still retain full control of its tournaments, but all commercial and business rights will fall under a new for-profit entity that has yet to be named. This entity will also own LIV as well as the commercial and business rights of the DP World Tour. Many details still need to be ironed out. For the rest of 2023 tournaments will remain separate.

By the looks of it, those who signed with LIV got their paycheck and are still going to be allowed to compete in PGA tournaments in the future. Many players who stayed loyal to the PGA Tour feel betrayed considering the stance Commissioner Jay Monahan took. Monahan was previously quoted saying "As long as I’m commissioner of the PGA Tour, no player that took LIV money will ever play the PGA Tour again." Well, it seems his tune has changed and his threats were empty.

Potential Problems

Senator Richard Blumenthal, a Democrat from Connecticut, has raised concerns about the deal. The primary one is the Saudi government playing an influential role in a well-rooted American institution. Some other concerns that have been brought up are in regards to antitrust regulations. The PGA Tour was already being called a monopoly before the merger with LIV. Following this deal, the concerns of a monopoly will grow even further. Many see the merger as another move by a monopoly to secure and maintain control of their cornered market by squashing rival organizations before they can fully take off. The decisions regarding antitrust will ultimately come down to the details of the deal and what the American government decides to do in response.