Mint Explainer: How Saudi Arabia wrangled a seat at golf’s high table

Newcastle United director and chief executive of the Saudi Golf Federation Majed Al Sorour, Newcastle United chairman and Saudi Public Investment Fund governor Yasir Al-Rumayyan, and chief executive of LIV Golf Investments Greg Norman at the inaugural LIV Golf Invitational (Photo: Reuters)
Newcastle United director and chief executive of the Saudi Golf Federation Majed Al Sorour, Newcastle United chairman and Saudi Public Investment Fund governor Yasir Al-Rumayyan, and chief executive of LIV Golf Investments Greg Norman at the inaugural LIV Golf Invitational (Photo: Reuters)

Summary

  • Sensing friction between pro golfers and the PGA Tour, one of the world’s largest investors used its ties to former US President Donald Trump to grab the reins of the 550-year-old game

In early June, PGA Tour officials and LIV Golf’s owner, Saudi Arabia’s $650-billion Public Investment Fund (PIF), announced a three-way merger that included the European Tour, bringing an end to a ferocious battle for control over golf. The move is ostensibly about more than just administering a sport. It undeniably gives the kingdom and its crown prince, Mohammed bin Salman, a stepping stone to global legitimacy.

Until the merger, PGA and LIV Golf fought over players, tournaments, golf courses and went to court. The world’s premier golfers faced a tough choice – deal with an autocratic PGA Tour setup or play in a league funded by a regime with an unenviable human rights record and no history or tradition of sports.

Many players and fans saw it as a battle for the soul of the game, fearing radical changes that would make it unrecognisable. Last year, LIV Golf’s first season got underway thanks in part to former US President Donald Trump, who welcomed the breakaway league onto courses that his family owns. For now, it appears Riyadh’s PIF will control the future of the game after reportedly investing $3 billion into the merged entity.

Who controls the sport of golf?

Until recently, the Professional Golfers Association (PGA) Tour, a US-based organisation, was golf’s leading body, acting as the players’ steward and its main seat of administrative power. It derived this power because it attracted the top players. It also administered golf’s four Majors – US Open, PGA Championship, The Masters and The Open Championship – the equivalent of tennis’ Grand Slams. There are other organising bodies in golf, including the European Tour (now called DP World Tour), the Asian Tour, and the Ladies PGA. But none are followed as fervently by fans or pay as well as the men’s PGA Tour.

What threatened the PGA Tour’s hold on golf?

From a player’s perspective the PGA Tour left a lot to be desired, especially regarding money. Under the PGA, prize money skews heavily to the best players. The vast majority of professional golfers don't even get a minimum participating fee for tournaments they qualify to play in.

Many golfers, especially in the lower half of the rankings, thus lose money playing on the tour. This feels unfair when compared to other professional sports. However, the PGA Tour has a transparent qualifying system through which players can earn PGA Tour status via feeder leagues and tournaments.

What is the difference between the PGA Tour and LIV Golf?

LIV’s approach has disrupted many of professional golf’s structural elements and quirks. For starters, LIV pays much more in prize money. It also guarantees every player a minimum payout of $120,000 per event. It has a team format, which makes nearly each shot count for every player, even if they are out of contention in the individual competition. It is played over 54 holes, with a shotgun start, compared to the PGA’s 72 holes.

These moves have caused many top-ranked PGA Tour pros such as Phil Mickelson, Dustin Johnson and Brooks Koepka to switch allegiances signing contracts worth hundreds of millions of dollars.

Culturally, LIV has shunned many of golf’s strict protocols, allowing players to wear shorts and audiences to cheer while players hit the ball (PGA rules require silence during shots). On the whole, it has sought to “supercharge the wonderful sport of golf", giving the 550-year-old game a 21st-century avatar. “It’s golf, but louder," is LIV’s marketing line.

Why did Saudi Arabia’s sovereign wealth fund launch LIV Golf?

Saudi Arabia has a stated mission to diversify beyond its fossil-fuel economy. It aspires to play a bigger role in spheres of Western influence, including sport. It has made big investments in football, gaming and Formula 1.

Golf, being hugely popular in the US, Western Europe and many other countries, thus became a target for the Saudi fund. The strained relationship between some pro golfers and the PGA Tour presented an opening to disrupt one of the oldest sports in the world.

What’s the problem with Saudi Arabia?

Saudi Arabia, like many of its oil-rich Middle Eastern neighbours, has turned to sport to expand its influence and soften its global image. This has become particularly important since 2018, when Saudi Arabia faced severe international backlash for allegedly ordering the killing of journalist Jamal Khashoggi.

The purchase of high-profile sports teams to distract from their poor human-rights record has become something of a fad among the region’s rulers. The phenomenon even has a name – sportswashing. Qatar owns French club Paris Saint Germain while the UAE has taken control of England’s Manchester City. In 2021, the PIF took control of Premier League club Newcastle United. Yasir al-Rumayyan, chairman of Saudi Aramco, also serves as chairman of Newcastle United and sits on the board of the kingdom’s sovereign wealth fund.

How is Donald Trump involved?

LIV Golf’s tournaments weren't being telecast at the start of its first season – they were simply broadcast on YouTube. The league also lacked access to many championship courses across the US because the course administrators chose to side with the PGA. However, LIV Golf found an ally in former US President Donald Trump, who offered his family-owned courses for its events. Trump personally showed up at the tournaments. Cameras and the media’s attention followed. Top players also signed on. Top courses globally have also opened up to hosting more of their tournaments.

The fresh approach also seems to have garnered attention from younger audiences – so much so that a handful of PGA Tour officials and LIV Golf’s owners brokered a merger in Venice and London. The merger includes the European Tour (renamed DP World Tour). To be sure, LIV hasn’t yet disclosed anything comparable in terms of broadcasting and sponsorship deals as the PGA Tour.

Now that they have merged, it remains to be seen how LIV’s philosophy could shape the PGA Tour and golf itself. Incidentally, PGA Tour Commissioner Jay Monahan announced that he would be stepping down indefinitely for medical reasons. PIF’s Yasir al-Rumayyan will be the chief of the new entity.

However, the deal is distasteful to some for precisely the reason that it is attractive to Saudi Arabia. American senator Dick Blumenthal, who heads the US Senate’s permanent subcommittee on investigations, has invited Rumayyan and Monahan to testify before the subcommittee. Blumenthal has called for more transparency and information on the merger, which could affect the fate of a “cherished American institution".

How does Trump stand to benefit from golf’s new power structure?

For years, Trump has dreamed of hosting a few of golf’s biggest tournaments. This was not possible under the previous PGA regime, which distanced itself from the former president, especially after the January 2021 US Capitol Hill riot and his alleged role in it. However, Trump’s proximity to al-Rumayyan and the Saudi royal family could now change all this. Trump-owned courses will benefit if they do host major tournaments, bringing in club memberships, playing fees and more.

Trump welcomed the announcement of the merger with enthusiasm. "They have unlimited money, and they love it. And it's been great publicity for Saudi Arabia. They've been great for golf. The Saudis have been fantastic for golf. And they're going to make it a big part of, inside their country, they're going to do some great courses," he was quoted as saying.

Trump’s ties with Saudi Arabia worried White House insiders on his ability to pursue a balanced Middle East policy while in office. The kingdom hosted his first foreign presidential visit in 2017. Jared Kushner, his son-in-law and former White House Middle East advisor, received $2 billion from a Saudi fund led by its crown prince for a new private equity firm just six months after leaving office in 2021. Kushner was reportedly a key defender of the Saudis in the White House, and is known to be on a first-name basis with crown prince MBS.

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