February 26, 2023

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Good morning and welcome to Front Office Sports’ Sunday feature. A.J. Perez [[link removed]] and Doug Greenberg [[link removed]] here to evaluate the never-ending storm that is LIV Golf as it kicks off Year 2.

The breakaway league has 14 events this season, the first of which concludes today at Mexico’s El Camaleón Mayakoba Golf Course. It has a new multiyear TV deal with The CW, reigning Open Champion Cameron Smith for a full year, and its calling cards: controversy and a massive antitrust suit.

Now that LIV Golf is no longer an existential threat to the PGA Tour, it appears the upstart league is facing its own identity crisis.

Leagues The Cracks in LIV Golf Are Starting to Show [[link removed]]

Matthew Harris/LIV Golf

When you go to a LIV Golf event, your senses are assaulted by music blaring on the course and at post-round concerts. The galleries are rowdy, the players wear shorts, and CEO Greg Norman throws beers [[link removed]] to spectators.

LIV tapped into Saudi Arabia’s virtually unlimited Public Investment Fund money to lure PGA Tour talent and front the prize money for its eight-event inaugural season.

The controversy it caused and the villains it embraced were real enough to deliver a storytelling “gift” to Netflix’s “Full Swing” docuseries, the show’s executive producer Chad Mumm told Front Office Sports.

It’s disruptive and everything it purports to be — but that might not be enough to build a sustainable golf product, or escape myriad legal and moral issues.

Ahead of LIV’s second season, the PGA Tour appears stronger than ever. The mutiny was only staged by a few players, and LIV’s shining moment between Years 1 and 2 was a U.S. television deal with the CW Network [[link removed]] — which has never regularly broadcast a major professional sports event and will show five of LIV’s 14 tournaments on a tape delay.

The PGA Tour is offering its biggest purses ever, while LIV’s stars continue to deny that money is the sole motivator behind their defection. All of this is happening alongside what can only be called a legal quagmire — a giant antitrust case that has no signs of ending.

Poking The Bear

A year ago, Phil Mickelson explained why he was considering joining the Saudi-backed venture.

“They’re scary motherf–kers to get involved with,” he told biographer Alan Shipnuck [[link removed]]. “Knowing all of this, why would I even consider it? Because this is a once-in-a-lifetime opportunity to reshape how the PGA Tour operates. The Saudi money has finally given us that leverage [[link removed]].”

Mickelson — who was also drawn to LIV by his reported [[link removed]] guaranteed $200 million contract — was right, but it may have backfired for the upstart league. Since the threat of LIV Golf became a reality, the PGA Tour has responded with more innovation, star-studded events for the fans and, of course, more cash for the players.

Tour ambassadors Rory McIlroy and Tiger Woods led a players-only meeting in August that produced a new way for the top players to compete together more often and for better compensation.

In August, McIlroy and Woods announced the creation of TMRW Sports Group [[link removed]] and its signature product TGL — a virtual golf league that will bring together the Tour’s best players 15 times a year starting in 2024.

The 2022-23 PGA Tour season now has elevated events [[link removed]]: a set of 13 tournaments with average $20 million purses.

The results and drama have been tangible just in the 2022-23 PGA Tour season’s opening few months, before LIV even commenced its second season.

2022 Masters champion Scottie Scheffler repeated at the WM Phoenix Open to reclaim the World No. 1 ranking; the following week, 2021 U.S. Open champ Jon Rahm took it back with a win at the Genesis Invitational.

TPC Scottsdale [[link removed]] was as electric as ever, attracting 3.7 million [[link removed]] viewers on Super Bowl Sunday, while the Genesis, amplified by Woods’ return, boasted its second-most-watched [[link removed]] second round ever.

Across both of these elevated events, the world’s best not only competed, but were in the mix: OWGR Top 10 players claimed nine of the total top-10 finishes.

And the real existential threat — the exodus of talent from the PGA Tour to LIV — has become, in reality, a moot point: This offseason, Thomas Pieters (35) and Mito Pereira (50) were the only players inside the World Top 50 to make the jump.

Problems Pile Up

When it was first filed in August, the antitrust lawsuit against the PGA Tour was led by several of LIV Golf‘s bigger names, including Mickelson, Bryson DeChambeau, and Matt Jones.

The legal setbacks for the case began days later when District Judge Beth Labson Freeman denied a temporary restraining order [[link removed]] sought by three LIV golfers that would have allowed them to play in the PGA Tour’s FedEx Cup Playoffs last season.

As most of the golfers dropped out of the lawsuit in the coming weeks, LIV Golf became the primary plaintiff. The courtroom losses, however, continue to pile up, putting LIV’s major financial backer — Saudi Arabia’s PIF and the fund’s officials — in a bind.

A federal magistrate judge ruled earlier this month [[link removed]] that PIF and fund governor Yasir Al-Rumayyan are subject to discovery — a decision that LIV will ask Judge Freeman to review. Freeman allowed the PGA Tour to amend its counterclaim on Wednesday, and a day later, PIF and Al-Rumayyan were added as countersuit defendants.

A couple more unfavorable rulings won’t doom LIV Golf’s case, but Saudi Crown Prince Mohammed bin Salman — who has ultimate control over the PIF, and, as a result LIV — could realize the case is endangering PIF’s other investments.

PIF and bin Salman have been successful in recent years avoiding the reach of federal courtrooms, most recently in Elon Musk’s attempts to get PIF to comply with a subpoena as part of a lawsuit brought by Tesla investors. In that case and others, PIF successfully argued — in the same U.S. District Court in Northern California where LIV’s case resides — that Musk’s subpoenas were outside the court’s jurisdiction.

There have been other high-profile cases where Saudi Arabia has been able to wield its sovereign immunity in U.S. courts.

In September 2021, U.S. Director of National Intelligence Avril Haines intervened in a federal civil case [[link removed]] where a state-owned Saudi company sued a former Saudi counterterrorism official, who fled the country in 2017.

As the Saudi Crown Prince, federal officials insisted bin Salman had legal immunity in a case brought by the fiancee of slain journalist Jamal Khashoggi, and the judge dismissed the case [[link removed]] in December. Khashoggi’s 2018 murder was ordered by bin Salman, a U.S. intelligence report concluded [[link removed]].

Coexistence

There have been some backchannel discussions — including among agents for players — to figure out how the PGA Tour and LIV Golf could co-exist, sources with knowledge of those conversations told FOS.

A settlement of the case would certainly benefit the PGA Tour, which could stand to lose millions if LIV Golf’s case results in a massive jury verdict.

There are dangers to a drawn-out legal battle beyond potentially exposing Saudi Arabia’s other business interests.

LIV Golf attorney John Quinn said in a Friday hearing that a consultant for the PGA Tour detailed in documents obtained in discovery that “PIF won’t be in it for the long run if they don’t see an opportunity for a return” on its investment. “A startup only has a certain window of opportunity,” Quinn said. “There is still a need for some urgency here.”

Jodi S. Balsam, a Brooklyn Law School professor and former NFL attorney, doubts LIV Golf will be ultimately successful with the case no matter how long it drags on.

“There’s no avenue toward an adjudicated outcome that the Saudis will welcome,” Balsam said. “I would sit the PGA Tour down and say, ‘OK, we’re gonna withdraw all our claims and you don’t have to pay a dime, but we need to save face.’”

She added that LIV Golf would likely look for the PGA Tour to relax its rules to allow LIV golfers to compete in tour events.

“What would the Tour get from LIV Golf?” Balsam asked rhetorically. “The lawsuit would go away and all golfers would gain some flexibility to participate in both circuits, but that may not be enough for the loyal PGA Tour members to accept the lavishly compensated LIV Golfers back into the fold.”

Hope For LIV?

Earlier this week, the PGA of America gave clearance [[link removed]] for LIV players to compete at the 2023 PGA Championship — meaning that LIV golfers are now eligible to compete at all four majors this year.

For the PGA of America, Augusta National, the USGA, and the R&A, the reasoning is obvious: The four majors are currently the only tournaments featuring the top players from both the PGA Tour and LIV Golf, creating a Super Bowl or World Series type of atmosphere at each one.

And one of its players winning a major is the league’s best hope for legitimacy.

But what happens to the players if the house of cards falls and the PIF pulls out of LIV entirely? Would Tour commissioner Jay Monahan let the LIV players return, or has too much bad blood spilled for things to ever return to normal?

In so many ways, LIV Golf’s second season will be crucial to the future of professional golf — even if it’s a failure.

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