In his playing time, Greg Norman always stood out on the golf course.
Nicknamed “the shark”, the Australian spent 331 weeks as the game’s number one ranked player in the 1980s and 1990s. With his trademark straw hat and aggressive playing style, Norman was a distinctive figure in an otherwise stuffy and conservative sport.
Now, with the backing of funding from Saudi Arabia, he plans to shake up the old game again. Last month, Norman was named chief executive of LIV Golf Investments, a new company majority-owned by the Public Investment Fund, the $450 billion Saudi state wealth fund.
The company’s self-proclaimed goal is to revolutionize the sport, entice the world’s best golfers to a range of new tournaments and challenge existing power structures.
Just as the Indian Premier League and shorter T20 format have boosted cricket with the creation of a new tournament generating billions of dollars in media and sponsorship revenue, LIV and its backers believe golf is ripe for the disruptive forces of new ideas and money. .
“The commercial side of golf is growing, the broadcast side of golf is growing, but golf has been in the same box for years. [more than 50] years,” says Norman. “Competition is the best thing in the world for everyone.”
Norman’s appointment was announced alongside LIV’s $200 million commitment to invest in the Asian Tour, the organization that hosts golf tournaments on his continent. The sheer size of the investment sent shockwaves throughout the game as the Asian Tour previously felt it was the “younger brother” of its bigger rivals, according to Cho Minn Thant, Asian Tour commissioner and chief executive.
It represents a powerful new competitor to the sport’s existing giants, the US PGA Tour, the world’s leading and richest circuit, and the European Tour.
LIV’s investment comes at an opportune time for golf. After years of declining participation in key markets such as the US, UK and Japan, the pandemic has sparked renewed interest in an offside that can be played while socially distancing.
In view of the IPL cricket tournament – which is built around a series of completely new team franchises – Norman says LIV is considering a plan to introduce more team formats in a sport based largely on individual competitions.
While it is believed that some prominent players are considering taking part in such a competition, rumors of a possible Saudi Golf League have been met with hostility by some in the sport. Irish star Rory Mcllroy criticized the prospect of a breakaway competition as a ‘money robbery’.
LIV represents the latest in a series of sports investments by Saudi Arabia, part of its efforts to diversify the oil-rich kingdom away from fossil fuels. PIF led the acquisition of Newcastle United, the English Premier League football club, for £305 million, while the inaugural Saudi Arabian Grand Prix in Jeddah in December will help determine the winner of this year’s Formula 1 motor racing world championships . Elite boxers, soccer players and golfers have all competed in the country in recent years.
Critics say Saudi Arabia is following a roadmap adopted by its Middle Eastern neighbors, the United Arab Emirates and Qatar, to use the world’s favorite games to “sport” its reputation, distracting it from reputation. of the country on human rights, the assassination of journalist Jamal Khashoggi by Saudi agents in 2018, and his military operations in Yemen.
Grant Liberty, the human rights group, estimates that Saudi Arabia has invested $1.5 billion in sports in recent years, all “to wash away the stench of murder and brutality that hangs over the MBS regime”.
Norman insists his involvement with LIV is rooted in a desire to grow the sport. “No, I haven’t been used to sports washing because I’ve been to Saudi Arabia and I’ve seen the changes that have taken place,” he says. “Every country has done terrible things in the past”. . . just look at America with racism for example, it’s just so embedded here, it’s just ugly.”
Whatever the motivations, the Saudi-backed company has begun a battle to shape the game’s future, pitting a blazer-wearing golf organization against well-funded rebels. As a sign of the fierce competition emerging, players on the US-based PGA Tour have been warned that they could face lifelong bans if they participate in breakaway matches.
“You have some very strong-willed people who are very interested in protecting what they believe to be the position, and the… [Saudi-backed] disruptors,” said Chip Brewer, chief executive of Callaway, the golf course and equipment company. “I don’t think it’s even cold. I think it’s just hot war.”
The Old Course at St Andrews is the world’s oldest golf course and is widely regarded as the “home of golf”. The first written record of the game in Scotland is a document from 1457 in which James II, the King of Scotland, banned the sport because it was a diversion from archery.
The Royal and Ancient Golf Club of St Andrews, the governing body of golf outside the US and Mexico, still plays an important role in the sport. The R&A writes rules and organizes the Open Championship, which began in 1860 and is the oldest major championship in the game.
Martin Slumbers, chief executive of the R&A, says the game can grow within the existing structure. “I don’t believe we need a disruptive event,” he says.
He distinguishes between LIV proposals for breakaway golf competitions and initiatives such as the sponsorship of the Ladies European Tour by oil company Saudi Aramco, the women’s golf group of which Slumbers is a board member. “I think there is a difference between wanting to invest and support within the current structure and wanting to be a disruptor,” he says.
The other power base of global golf is in the US, which hosts the Augusta Masters, US Open and PGA Championship – the other three of Golf’s four ‘great’ championships. The first US Open took place in 1895 and the sport grew in popularity throughout the 20th century, especially after World War II.
The US PGA Tour was founded in 1968 and has grown to become the sport’s preeminent tour. Structured as a tax-exempt US charitable trust, annual revenue grew from $3.9 million in 1974 to $229 million in 1993, and forecasts revenue of $1.5 billion next year.
The PGA Tour is competing hard to maintain its status as a player-favorite destination, increasing prize money and other financial incentives, while also warning players about the implications of play for breakaway competitions. In a memo sent to members on Nov. 22, Jay Monahan, the PGA Tour commissioner, said the tour would increase its annual prize money by 16 percent to $427 million by 2022. In total, the tour expects 55 percent of its annual prize money. revenue back to the players next year.
“The PGA Tour is stronger than ever in our history and the game of golf has unprecedented dynamics,” Monahan said in an emailed statement. “We are positioned to grow faster in the next 10 years than at any other point in our existence.”
Previously, the only real challenger to the PGA was the European Tour, a rival tournament circuit. That dynamic changed fundamentally when the two groups announced a new strategic alliance in November 2020, with the PGA Tour agreeing to invest a 15 percent stake in the European Tour’s media production company for $85 million, providing much-needed post-pandemic capital. .
“They went from competitors to partners overnight,” said Keith Pelley, chief executive of the European Tour, who described the deal as “opportunistic” rather than defensive. “It’s just the beginning.” In an effort to attract and retain top players, Pelley has also signed a historic naming agreement with DP World, a longtime sponsor, allowing it to increase its prize pool to $140 million.
One victim of this has been the Asian tour – which has tapped into the growing popularity of the sport in the region over the past two decades. The growth of the Asian tour was aided by a strategic partnership with the European Tour, which was first signed in 2016 but will expire at the end of the year.
“We were aligned with the European tour the longest,” Thant says. “And it was all about protecting the rest of the world from the PGA Tour. Now it has been turned upside down, where the European Tour and the PGA Tour work together.”
The shifting alliances within the global wave have opened up Saudi-backed efforts. “We felt like standing on our own two feet and partnering with an investor in the Asian region,” Thant says.
Norman first proposed a world golf tour in 1994, but the project received little support at the time. “Nothing really happened” in the way the game has been structured in more than half a century, he says.
That could change with LIV’s investment, which supports a series of 10 lucrative events to be held on the Asian Tour over the next decade and says it is looking at “strategic investments” in the sport.
Bigger plans could soon follow. One idea LIV is exploring is team-based formats. Golf already hosts a small number of successful team events, including the Ryder Cup, which is hosted by the PGA of America and Ryder Cup Europe. The Solheim Cup, the women’s equivalent, is organized by the Ladies European Tour and the US Ladies Professional Golf Association. In both tournaments, teams representing Europe and the US compete against each other.
But the structure of golf means that teams cannot be bought and sold. Unlike football and basketball, golfers are individual contractors. They work for themselves, while the tours organize competitions, collect media rights and monetize the coverage. Despite players’ apparent independence, they usually need permission from their member tour if they want to play on rival circuits.
Norman argues that this model is a missed financial opportunity. “You’re looking at that value generated by other sports, for other players and other franchises,” he says. “Golf has never recognized that or had the opportunity to conquer that market.”
The world’s largest sports teams can be valued in billions of dollars. Manchester United, the English Premier League club, is traded on the New York Stock Exchange for about $2.5 billion. Norman says the Indian Premier League, which launched in 2008, shows how new sports franchises can quickly grow in value when backed by huge broadcast deals and a growing audience. Last month, private equity firm CVC Capital Partners and Indian tycoon Sanjiv Goenka jointly spent $1.7 billion to buy the two new teams that will enter the competition next year.
“It would be stupid of us not to watch that,” Norman says of investing in team competitions. “We see what sport as an asset class has done for franchise values, owners and fans . . . but to get into that direction, you have to change gears a lot.”
Prominent players such as Justin Rose, Bryson DeChambeau and Phil Mickleson have reportedly been approached to participate in the new projects, but few have spoken publicly about their participation.
The risks are high for any player considering taking part in a breakaway competition – they could be banned from leading events in the PGA Tour or European Tour, or the Ryder or Solheim Cups.
“You go back to what happened in Europe with the European Super League in football,” McIlroy said earlier this year, referring to a failed attempt by elite football clubs to create their own league and control revenues.
“People can see it for what it is — money making — and that’s fine if you play golf to make as much money as possible,” he said. “I play this game to cement my place in history and my legacy and to win big championships.”
Executives on rival tours argue that creating teams goes against the very essence of what it is to be a professional golfer. The idea that they are “obliged to someone who owns the team, an employment construct rather than independent contractors” is the main reason why it is so difficult for leagues to convince players to join them, one person said. close to the PGA Tour.
It is not the first time that initiatives have been suggested in the sport. The European Tour has been in talks with the Premier Golf League, a separate group that continues a team project, until it was decided to partner with the PGA Tour. The PGL, which says it has no Saudi funding, still hopes to convince the PGA Tour to partner with it.
Despite fierce opposition, Norman and his supporters believe the windfall in money they can donate to the world’s best players and the excitement of new formats will convince many to break away. This is necessary to attract millions of dedicated golf fans to the events.
Norman says that professional golfers, especially those not based in the US, have always wanted to be able to play around the world and be truly independent.
“We were given a huge amount of restrictions,” he says. “We’ve been fighting for this right for almost four decades now to be able to join the PGA Tour, the European Tour, the Asian Tour, and still have the right to play wherever you want. .”
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