Holder of a Master’s degree from the Sorbonne, specializing in issues relating to Latin America, Mathieu Sauvajot first wrote articles dealing with the geopolitics and economy of this continent, before turning to the field of sport. He now works with the Observatoire du Sport Business.
For two years now, the world of golf has been in turmoil. For those not following, LIV Golf, backed by Saudi Arabia’s Public Investment Fund, emerged as a PGA Tour contender in 2022 and offered huge signing bonuses to attract top players. world, including $200 million for Phil Mickelson and $125 million for Dustin Johnson to name a few. Significantly higher bonuses than those promised under the PGA Tour have also been paid, both for events and for golfers.
The PGA Tour’s response was swift, with the organization increasing tournament payouts to prevent players from flying to LIV Golf. His total purse for the 2022-23 season having been pegged north of $560 million, an increase of 33% over the previous year, or 25% after adjusting for inflation. By comparison, in the previous eight years, the Circuit’s purse had grown only 19% in 2023 dollars.
However, the showdown ultimately tipped in favor of Saudi Arabia. Despite the financial efforts and the pure and simple exclusion of renegade golfers, nothing helped, big names gave in to the sirens of LIV Golf, the financial gap being far too great.
For example, among the ten golfers who won the most prize money last year, three of them, namely Dustin Johnson, Cameron Smith and Branden Grace, played for LIV Golf, knowing that this ci has only held eight tournaments, compared to 48 for the PGA. In addition, the impact of the Player Impact Program (PIP) on the rankings, aimed at rewarding players stimulating engagement and publicity of the circuit, should not be overlooked either. For example, Dustin Johnson ranked second among all golfers in earnings last year, with $35.6 million from LIV Golf events and his season champion bonus, but Rory McIlroy edged it out with $44.8 million in total, including $12 million from PIP. Suffice to say that PGA Tour understood that it would be complicated to fight in the long term.
The PGA Tour, LIV Golf and the DP World Tour, Europe’s leading golf circuit, have finally reached an agreement to merge their business interests into a single global golf entity, which will logically lead to an unprecedented restructuring, but not without consequences. On the one hand, the PGA Tour will be able to consolidate its power insofar as it will appoint the majority of the members of a new board of directors, responsible for overseeing the commercial operations, activities and investments of the new entity. On the other hand, PGA Tour and DP World Tour will now depend on Saudi money invested heavily in LIV Golf.
However, the question of ethics arises. What about players, fans and sponsors who openly criticized LIV Golf for its ties to the Saudi state? What will happen to excluded players? For now, the suspense is complete and some observers remain perplexed, even if after all, the world of golf is not an isolated case, others have given in before them. Football is probably the most obvious example, between the organization of the Italian Supercup within the Saudi nation, the arrival of big names in football from the side of the Saudi Pro League such as Cristiano Ronaldo and Karim Benzema , or even the recent decision by the State to acquire a substantial part of the clubs of Al Ittihad, Al Ahli, Al Nassr, and Al Hilal via its investment fund, the examples are legion. Formula 1 too, had agreed in 2021 to organize a Grand Prix on the Jeddah circuit to the chagrin of many NGOs, and boxing could well follow, like the “super tournament” project.
The resistance of golf, like the others, will therefore have been only temporary, the agreement on a merger having the appearance of a failed confession for the PGA Tour, condemned to bow to Saudi means, all the more that the announcement of the creation of a new entity will have continuous downstream effects on all of golf, and not just in the professional ranks. Within an hour of the merger announcement, golf companies Acushnet (NYSE:GOLF) and Topgolf Callaway (NYSE:MODG) jumped at least 5% although no details are yet available. filtered as to the name of this new entity and its impact on the calendar as well as on the players.
However, one thing is certain, by becoming a major player in the world of golf, Saudi Arabia has both managed to catch up a little further behind its Middle Eastern rivals, the Emirates and Qatar. It remains to be seen whether the image of the country emerges enhanced or damaged from this standoff against a backdrop of petrodollars…
