The Sportswashing Edition
On golf, Saudi Arabia, and business
Jeff Hughes (JH) is a 13 handicap, but with his improved driving in his early-season outings, he expects to get that down to 11 by season's end.
"Everyone needs money. That's why they call it money."
- David Mamet, Heist
Jeff here. About a year ago, news began to circulate among the golf media that the Saudis—through their Public Investment Fund, and with the fiercely unlikeable Greg Norman as their frontman—were preparing to throw an unholy amount of money at some of the current greats of the game in an attempt to launch a rival league to the PGA Tour. The news was met with a mixture of moral outrage (the word "bonesaw" often featuring prominently) and a sort of glib flippancy ("who would ever leave the PGA Tour and its AMAZING pension plan?")
The proposal wasn't taken seriously because there wasn't much reason to take it seriously. You see, this isn't the first time such a coup was floated in the game of golf. Jack Nicklaus and Arnold Palmer stirred these waters in 1983. Norman himself attempted to build a "world tour" in 1994. Both failed. And then Eldrick “Tiger” Woods showed up in 1997, and with him came more money than the game had ever imagined. The PGA Tour tanned themselves in the warm, bright rays of Tiger’s star for 25 years.
But unlike those previous attempts in the game of golf, or other potentially-disrupting sports leagues like the USFL and XFL, LIV Golf appears to have a signature advantage: there is no business model. Why? No one can say for sure, but prevailing wisdom says it’s because the Saudis have (a) significant financial resources and (b) no apparent interest in turning a profit.
LIV is giving out signing bonuses north of $100 million to some of the game’s top players, including Phil Mickelson, Dustin Johnson, and Bryson Dechambeau. They are playing their first event outside London this weekend with a borderline professional field and the largest purse in the sport's history. And they are doing all of this without a broadcast partner and devoid of sponsors!
The PGA Tour's response. If you play their tour, you are banned from ours.
Why is this interesting?
Sportswashing, or using money in sports to improve a regime's reputation, is almost an afterthought at this point. The Saudis have nearly a billion dollars invested in Formula 1, a sport that has seen its popularity skyrocket in the wake of its popular Netflix series. That silence you hear? That's the complaining of Newcastle United supporters, who went from one of the Premier League's worst sides to one of its best in just a matter of months. What changed? The Saudis bought them and spent more money in the January transfer window than any club in Europe. If your expectation is that GOLF will be the sport to finally take the moral high ground, well, then you just don't know very much about golf.
There are still many questions to be answered about this new project. It has a wonky team format no one quite understands. It is struggling to find an avenue to the world ranking points its participants would require to be eligible for the sport’s major championships. They have staffed the worst branding people in corporate history. But none of that will matter if they continue poaching some of the game's best while laying the groundwork for the future by guaranteeing money and starts (almost as valuable as money in golf) to some of the world's top amateurs.
The PGA Tour will likely survive in one form or another. But its days as the preeminent entity in the sport of professional golf seem to be coming to an end unless they can somehow combat the uncombattable: an unlimited reserve of cash and no desire to see a return on it. (JH)
WITI x McKinsey:
An ongoing partnership where we highlight interesting McKinsey research, writing, and data.
Quantum computing just might save the planet. Exponentially more powerful machines could make possible major reductions in emissions, putting the goal of limiting global warming within reach. Don’t miss a new article on how quantum computing could revolutionize the fight against climate change.
Thanks for reading,
Noah (NRB) & Colin (CJN) & Jeff (JH)
Why is this interesting? is a daily email from Noah Brier & Colin Nagy (and friends!) about interesting things. If you’ve enjoyed this edition, please consider forwarding it to a friend. If you’re reading it for the first time, consider subscribing (it’s free!).