Why LIV Golf is unlikely to get a mulligan
After the Saudis pulled their funding, LIV Golf is looking for investors
Four years ago, they were looking for players. Today, after the Saudi Arabia Public Investment Fund withdrew its financial backing, the LIV Golf professional global golf tour is looking for investors.
Northeastern University international business experts said the tour is now likely to fold, and that its failure had more to do with business and oil than drives or putts.
“Looking from a business perspective and also a geopolitical perspective, it was something they tried, and it didn’t work that well,” said Evodio Kaltenecker, associate teaching professor of international business and strategy at Northeastern.
He called the decision to pull funding “a decent move,” noting the Saudis have “many, many options” for investing their oil revenues.
“The golf option [was] not delivering,” he said.
LIV Golf was founded in 2021 with the backing of Saudi Arabia’s Public Investment Fund, a sovereign wealth fund, as a global golf tour. The tour’s name, which is the Roman numeral for 54, references the original tournament format of golfers playing 54 holes, rather than the 78-hole format of tournaments on the rival Professional Golfers’ Association of America (PGA) Tour and the former European Tour, which is now called the DP World Tour and is sponsored by Dubai-based multinational shipping and logistics company, Dubai Ports.
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Kaltenecker said the Saudis wanted several benefits from the tour in alignment with their 2030 Vision, a plan to diversify the country’s economy and society beyond a reliance on oil revenues.
“They wanted to increase tourism arrivals, get more non-oil export growth or non-oil revenues and development of the workforce, and also get global brand equity,” Kaltenecker said. “LIV Golf has not produced good results in those areas.”
As to why that may be the case, many of the tournaments on the tour are outside Saudi Arabia, limiting tourism to the country, Kaltenecker said.
Meanwhile, the tour never got the diversified financial backing necessary to compete with an established tour like the PGA, Kaltenecker said.
LIV Golf also lacked a major broadcaster until the 2025 season, for which it signed a deal with Fox Sports. But the tour retained — and thus presumably continued to pay for — its own announcers and broadcast production. Although no financial terms were disclosed, the deal was reportedly worth far less than deals for broadcast rights for other major sports leagues, according to Sportico, a sports business outlet.
A proposed 2023 merger with the PGA Tour also never materialized.
Finally, the Iran war has now made oil markets volatile. While higher oil prices mean more revenue, Iran’s control of the Strait of Hormuz makes selling oil difficult, Kaltenecker said.
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“It’s maybe not the final, but it’s an important nail in the coffin,” Kaltenecker said of the war. He predicted the tour would finish out the season and then dissolve.
LIV Golf angered many by recruiting major golfers away from the rival PGA by offering large tournament purses and guaranteed contracts. Spanish golfer Jon Rahm signed an estimated $300 million contract to decamp from the PGA, Phil Mickelson got $200 million and Brooks Koepka garnered $100 million, Forbes magazine reported. The PGA subsequently banned the players who joined LIV, but has since offered a pathway to return to the tour.
The Saudis were also accused of “sportswashing,” or using sports to make critics overlook the country’s alleged human rights abuses.
But the PIF’s recent five-year plan made no mention of LIV Golf, and news outlets including The Wall Street Journal, confirmed that the Saudis were pulling their financing of the tour — $5 billion, according to Forbes — after the current season.
The PIF did not respond to a request from Northeastern Global News for comment on that development.
Golf may not have been Saudi Arabia’s game, but Kaltenecker pointed out that Riyadh has other ways to generate tourism and economic growth.
“Saudi Arabia has a stronger card than LIV Golf,” he said. “They have the FIFA World Cup in 2034.”
Soccer is the country’s most popular sport and, with the backing of the PIF, the Saudi Pro League has attracted international superstars like Cristiano Ronaldo.
This week, some LIV Golf players are expected to join tour officials as they seek new investors while play continues, although Northeastern international business experts were not optimistic.
“It won’t be easy to get private investors and top players to participate in a wounded LIV Golf,” said Ravi Ramamurti, university distinguished professor of international business and strategy at Northeastern. “In all likelihood, LIV will die a slow death, or be replaced by something less global and impactful,” he said.
“If the Saudis, who are sitting on piles of cash, cannot sponsor it, why would someone else?” Kaltenecker said.
Ramamurti called the tour’s projected demise “deja vu all over again.”
Ramamurti said that he had previously predicted the venture would fail. That’s because every decade or two, when oil prices are high and Saudi Arabia is flush with petrodollars, the country tries to diversify its economy by embarking on “overly ambitious projects.”
When oil and gas accounted for over 90% of Saudi Arabia’s total exports in 1980, the country upgraded exports from crude oil to higher value-added products such as plastics and fertilizers, Ramamurti said. But in 2000, oil and oil-based products still accounted for over 90% of the country’s total exports, Ramamurti said, and some projects were abandoned when oil prices fell in the mid-1980s.
This leaves Saudi Arabia “as dependent on oil as ever before,” Ramamurti said.
