Almanac Golf: Send Lawyers, Golf and Money – the Shits have Hit the Fans

 

So the US PGA Tour and the Saudi LIV tour have kissed and made up and will now sail happily into a future of wedded corporate bliss.  At least for the lawyers and money men who run both tours, while the fans and players are left to pick over the entrails of media statements and contracts to work out who’s a genius (Cam Smith and Marc Lieshman and Phil and Brooks) and who’s a rube (Adam Scott and Rory and Rahm).

 

I’m one of those nerds who finds professional sport not just entertainment value, but what poker players call a “tell”. It’s a light into the opaque world of geopolitics and global finance that always rules our long term destiny.

 

Retail politicians and media sell us a packaged version of the goodies and baddies narrative we accept because the reality is too complex and awful.

 

We “liked” World War II because it was the last war fought to an end where the goodies won and the baddies lost, but being good guys we rehabilitated the losers and brought them back into the family (think of Germany and Japan as the biblical prodigal sons). It’s our defining narrative even when it jars with the modern reality of Vietnam, Afghanistan and Iraq, where we walked away with messy compromises and no lasting gains.

 

Technology, money and concentrated power have propelled us into a world where the consequences of fighting wars to a “just” end are unimaginable. Think the current destruction of Ukraine’s people, infrastructure and environment. When do you sue for peace, so there is still a prize worth winning?

 

I digress. Back to the cricket (or golf) where the competing US and Saudi leagues had bid up the price of talent (a lot for LIV and a bit for the PGAT) to a point of Mutually Assured Destruction. There are thousands of terrific male pro golfers, but maybe only 30 elite players who shift the needle in terms of fan engagement and viewing numbers. And only a half dozen consequential tournaments – mostly the four Majors – none of which is owned by the PGA Tour or open to takeover by LIV.

 

Sponsors were walking away from the PGA Tour as it dug an ever deeper hole of “designated tournaments” (mandated elite participation) and endless layers of complex feeders – regular tour events, Korn Ferry Tour for emerging players and DP World (old European tour). What sponsors want to pay top dollar for the scraps? The decline of tournament sponsorship revenue portended the decline in future TV contracts as the media world is chopped up by streaming services, piracy and cord cutting. Only premium events and premium players demand premium media contracts. The rest is spakfilla broadcast time to feed the corporate bookies and their gambling addiction monster. Think of the golf feeder tours as Tuesday horse racing.

 

So the suits at the top could see that their “rivers of gold” were drying up at the same as they were locked into expensive litigation in the US courts where the discovery phase was about to reveal no end of dirty washing on both sides. For the PGA tour it was anti-competitive behaviour that threatened its tax privileged Not for Profit status, and long-buried, failed media deals. For the Saudis (and the rest of the oil states) it was the government control of the “independent” corporate structure of LIV that would have disastrous consequences for the bigger game of their takeover of world football (soccer). Ronaldo and Benzema have gone to Saudi (Messi and Busquets possibly following) at the end of their careers where there is the real prospect of national pride stemming from elite national teams at future World Cups. Saudi leader MBS (the most interesting and important emerging world leader – for better or worse) knows his people need circuses to keep them distracted from who controls the bread (oil revenues). 

 

Middle East wealth has incrementally built control of soccer leagues – EPL and UEFA and FIFA – through purchase of the most powerful clubs and players (Manchester City, Newcastle United, Paris St Germain) via a fiction of arms length separation from their government owners. Their ‘trojan horse’ strategy has succeeded to the point where they are so powerfully embedded that the governing bodies “have to live with the consequences of the things they can no longer afford to live without”. Much like western consumers with rising interest rates.  The piper always gets paid in the end. 

 

So now we have the strange bedfellows of a “merged” leadership PGA Tour. It looks an unholy alliance of a Saudi money man at the top, with a US CEO and lawyers and hedge fund financiers ensuring all the troughs are filled. Can Trump’s son-in-law Jared Kushner (Saudi financed) be far from the Art of the Deal?

 

For a “player run” organisation – its leaders like Rory and Rahm and Adam Scott – must be choking on their Wheeties this morning as they struggle to digest the fait accompli their lawyers and money men have delivered them.

 

What options do they have? The LIV players march back in having pocketed US$50-200M for leading the breakaway for a year. PGA Tour prize-money and bonuses have risen but are trifling by comparison. Loyalty sucks – but how do you complain about only getting less of more?

 

The smart play on offer two years ago was to take the Premier Golf League model of a short season big-dollar teams competition – modelled on the “Drive to Survive” F1 structure. Team ownership would have been shared between the players and corporate owners. The current players would have secured equity and control – but they were blinded by up-front dollars (LIV – player managers wanted their 10% in cash) and false appeals to loyalty, tradition and moral values (PGA Tour fed on anti-Saudi human rights rhetoric that was US jingoism now surpassed by it’s long time devotion to dollars). Lebron James only signs NBA contracts in return for team equity ownership that grows over lifetimes. Cash erodes in a high inflation paper currency world.

 

The Saudis and LIV stole the PGL concepts, bastardised them and short changed players with cash rather than ownership and control. Business ethics huh? Straight out of the PWC playbook.

 

Only the now largely retired Tiger Woods would have the status and credibility to lead and organise a breakaway/breakaway Tour, but I fear the US money men who would have backed him as a PGL leader have now decided on sharing spoils with the Saudis.

 

We will only know what male pro golf’s Brave New World looks like when the 2024 Schedule is finally revealed. A lot of rosy promises are being made that cannot be kept. Now largely disaffected already rich young players. Multiple markets and destinations. The exhaustion of competition and travel to mostly meaningless events for the elite. Rory McIlroy walked away from a $3M bonus recently when faced with being contractually obligated to a designated event while feeling exhausted. What price LIV Adelaide?

 

Australian fans got to see the top LIV players at Grange in Adelaide in April – Cam Smith, DJ and five-time Major winner Brooks Koepka – the last time any of the non-Aussies will get an Australian passport stamp. They only travelled as a contractual obligation. There is nothing in Oz for the Saudi money men now.

 

Grange is a middling members course that Talor Gooch tore apart with two 10 under rounds before snoozing to an easy win. It has none of the challenge and appeal to elite players of the Sandbelt’s best – Royal Melbourne and Kingston Heath. We will be back to seeing the world’s best once a decade for one-offs like a President’s Cup (if it survives in the Brave New World – doubtful).

 

If there is a LIV Adelaide in 2024 expect the headliners to be LIV also-rans like Matt Jones, Jed Morgan and Anirban Lahiri. SA Premier Peter Malinauskas had better have his lawyers poring over the fine print of the contract. Don’t think Greg Norman’s signature is worth much now.

 

Australians have an inflated sense of their world importance. Our PMs get a seat at the G4 world table alongside the US, India and Japan because we have 6% of the world’s minerals with only 0.3% of its population. The world needs our resources not our human rights lectures and democratic values. 

 

The Saudis have plenty of resources and dollars – with a captive US golf market they no longer need our golf fans or courses. The US PGA Tour has long demonstrated its contempt for us.

 

The golf world has had a harsh awakening to the world of realpolitik. “Politics as a strife of interests masquerading as a contest of principles”. (Ambrose Bierce – the Devil’s Dictionary).

 

 

 

 

Apologies to the late Warren Zevon, but songwriters tell us complex, uncomfortable truths in succinct engaging ways.

 

 

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