Three years ago, Yasir al-Rumayyan, governor of Saudi Arabia’s sovereign wealth fund and chair of the upstart LIV Golf league, looked set for the biggest job in the sport, as he struck a deal with the US PGA Tour to create a new commercial body under his leadership.
Backed by the kingdom’s $1tn Public Investment Fund, LIV was on the rise, luring big-name stars to its competition set up as a direct challenge to golf’s establishment.
Forced to the negotiating table, the powerful US PGA and its European equivalent agreed al-Rumayyan should chair the company that would control the lucrative commercial operations of all three tours.
The victory turned out to be illusory, as the supposedly transformative deal failed to materialise.
This week, the PIF pulled the plug on its LIV involvement, after spending more than $5bn over four years to hire stars such as Bryson DeChambeau and Jon Rahm, saying it would halt funding beyond this season.
Al-Rumayyan, one of the most powerful figures in Gulf business, is stepping down as LIV chair and ending his involvement in the competition, which is left fighting for its survival.
While LIV has never lacked ambition, the lossmaking league has been unable to build a sustainable business and wean itself off a total reliance on the PIF for regular cash injections.
The seeds were sown in the 2023 deal that al-Rumayyan signed with PGA Tour boss Jay Monahan. This framework ended litigation between the two sides but it failed in its wider goal of reunifying the sport.
Within months, the PGA Tour had agreed to a new commercial arrangement, raising billions of dollars from investors led by Liverpool FC owner John Henry.
“Yasir always believed LIV was going to be huge,” said a person with knowledge of the negotiations that underpinned that agreement. “The reality is there was no exclusivity,” they added, allowing the PGA Tour to strike deals that did not include LIV.
Another issue was that both sides “underestimated the backlash” to their accord, said another person privy to the talks.
Players were furious with the PGA Tour for keeping them in the dark, until an awkward CNBC interview with al-Rumayyan and Monahan confirmed a deal had been reached. But that announcement was premature, the person said, and was made before the reunification plan had been “fully baked”.
Yet it was funding that was the main problem, with LIV eating up cash and failing to build the revenues to support such a cost-heavy business. The players it hired were paid huge sums to ditch the US and European tours, while prize money of $20mn was to be paid out at each of this season’s 13 events.
Bankers at Citi were appointed this year to sell stakes in the teams, a signal of the league’s need to raise capital.
But ultimately, the Saudi investment was unsustainable, particularly at a time when the PIF is resetting its priorities after a decade of heavy spending, a process that began before the Iran war but which has only been complicated by the conflict.
Just a few weeks ago, LIV chief executive Scott O’Neil said in an interview with the FT that it would take another five to 10 years for the league to be profitable.
One sports executive said this was a watershed moment for the Saudis — public confirmation that they could be on the hook for another decade.
After weeks of rumours, including a report in the FT that the PIF was on the verge of cutting its investment, the sovereign wealth fund put an end to the speculation on Thursday.
“The substantial investment required by LIV Golf over a longer term is no longer consistent with the current phase of PIF’s investment strategy,” it said in a statement.
Bradley Klein, a golf historian and course architect, said of the way the PIF crashed into the sport: “They proved that, in the absence of taste and sound judgment, throwing cash around . . . is a formula for failure.”
LIV is now seeking new investment, with huge question marks over whether it can continue beyond this season.
Industry experts were sceptical about its chances of securing the finance it needed. “If you’re saying the guys with all the money in the world don’t want to fund it, why should I?” said a veteran sports dealmaker.
LIV said this week that two new directors, Gene Davis and Jon Zinman, would join its board, as the league pursued new funding options. Observers noted that the pair were longtime figures in US distressed debt investing. Their presence could signal some sort of coming balance-sheet restructuring exercise at LIV, Wall Street financiers told the FT.
There remain some promising elements to LIV’s business. The likes of HSBC and Salesforce are partners, although the league’s sponsors also include PIF-owned companies such as oil group Aramco and flag carrier Riyadh Air.
LIV events in countries such as Australia and South Africa — markets that are not a priority from the US-centric PGA Tour — have drawn tens of thousands of raucous fans, offering hope that a slimmed-down LIV could have a future. The league said on Thursday that it was on course for “a 100 per cent increase in revenue year over year”.
Despite its experience with LIV, the PIF retains an interest in golf. It is planning for the PIF London Championship in August, a key fixture on the Ladies European Tour with a $2mn prize fund.
In football, another sport where the kingdom has invested huge sums, Saudi Arabia is to host the Fifa men’s World Cup in 2034. A person close to the PIF also confirmed that it remained committed to Newcastle United, the English Premier League football club it bought in 2021.
“LIV Golf has substantially grown the game globally through its transformational and positive impact,” the PIF said of its legacy. “It has forever changed the game of golf for the better.”
Klein, the golf historian, saw the Saudi involvement in the ancient game differently. “Even by the lowly standards of upstart sports leagues, LIV set a new mark for the crass, boorish, loud and overly moneyed trashing of standards in search of credibility,” he said.
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