Chapter 1: What led to Saudi Arabia's decision to withdraw funding from LIV Golf?
Now we turn to these reports this morning that Saudi Arabia is going to pull funding from the Live Golf Tour, throwing the breakaway competition's future into massive doubt. I'm joined by travel journalist and presenter of Golf Weekly, Fionn Davenport. Hello, Fionn.
Hi, Clare.
The rumours were around for a couple of weeks. The people who were in charge of Live Golf said absolutely no truth to it. What's happening today?
Well, it's the least surprising bit of news given that from the outset, the model for Live Golf was just unsustainable and was really just existed because the PIF, which is the fund that gave over $5 billion to create this league in the first place, was never going to make a profit because It was paying its top stars hundreds and hundreds of millions just as a signing on bonus. Huge purses.
And it had relatively few viewers. You know, it didn't have a TV audience until this year. And even then, the TV audience is fairly insubstantial. So, yeah, as I said, it's the least surprising bit of news and probably the I mean, I obviously don't know what's going on at the heart of PIF, but they've decided that they're going to pivot and focus their monies and attentions elsewhere.
So in terms of tournaments then, they postponed a June event in New Orleans. Have they anything left on the agenda after that?
Well, the reports are they're going to fund the tour until the end of the season. So there are two events still on the schedule at Trump-owned courses. So perhaps there's political reasons why they don't want to cancel those. The reason they're giving for suspending or postponing the event in Louisiana is because it clashes with the World Cup, which, as you know, is taking place in the U.S.
and Mexico and Canada this year. So already with very small audiences, perhaps they don't want to risk losing what little audience they have. But beyond this season, it's unlikely that Lib will exist, certainly in its current format.
Well, it vindicates Rory McIlroy's stance, doesn't it? And we were chatting about this when the rumours first started a few weeks ago. And we heard that the guys at the top who went in there for the money and made millions off it will be grand. But it's the people who went in at the lower levels that might really struggle after this, the players.
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Chapter 2: How did the rumors about LIV Golf's funding affect the players?
They won't struggle getting pathway back into the PGA Tour, although publicly there might be a lot of rumbling and a lot of browbeating about like they must pay their dues. But realistically, the PGA Tour wants these guys back. It's the guys at the lower level who who will struggle to find golf, although the TB World Tour will hoover up those middle-tranch players.
However, Claire, I have no sympathy for any of them because they've all made a lot of money out of the last four years playing on live. So financially, they're all relatively secure. It's about where they're going to play their golf in the future that perhaps is still open to question.
I mean, the hope and expectation amongst those behind Liv was that people wanted a kind of a shake up of golf. You know, they wanted music as people were playing and teeing off and so on. They wanted the dress code change. Turns out that people didn't really want that at all.
Perhaps not. I mean, I think golf is like, I'm a big golf fan, so I perhaps don't see it, but it's similar to what happened in cricket where the five-day test series and then you have, you know, limited overs and then you have the IPL in India. It's about making the product more palatable to a wider audience. That's what Liv were trying to do.
Shake it up, make golf, you know, it's golf, but louder was the motto that first year. You're right. I mean, the audience just hasn't come along. But then again, the audience has been dwindling for the regular PGA Tour as well. So golf in general is suffering from a lack of audience.
And it's worth pointing out that the impact of LIV deciding to, or PIF pulling its funding from LIV, is going to have a massive impact on the PGA Tour and the DP World Tour. and not just in the fact that, like, the players are going to want to play again, is that the existence of Live forced the PGA Tour to raise purses.
So, for instance, to put on a typical event nowadays, it's $40 million for a sponsor. That's $20 million in prize funds for the signature event, and then $20 million in ancillary costs in, you know, putting on the event itself. That's just unsustainable as a model.
It's also kind of disgusting, isn't it?
It's absolutely disgusting because, and as Paul McGinley has been quoted as saying, is that the only winners here are the players. The players that went to live and the players that stayed on the PGA Tour because they've all gotten richer. And ultimately, the ones that suffered the most were the corporate sponsors, the golf events, And Joe Public.
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Chapter 3: What challenges does LIV Golf face in sustaining its business model?
And Claire, we saw last week the outrage that met the announcement of the $499 for day tickets for the Ryder Cup. That is a direct consequence of the growth in purses and the need to pay players more money because the DP World Tour...
who set the prices for the Ryder Cup, they need, they need to earn money from the Ryder Cup in order to keep paying these inflated purses, even on the DP World Tour. And so as a result, it's the Joe public that suffers.
And the Ryder Cup tickets now that went on sale for €4.99 last week are being resold for around, this morning we heard, €1,700 plus for the day.
I mean, And we saw, like, even in the midst of the outrage and the shock that met the announcement of the ticket prices, 60,000 people were on the online purchasing agent trying to buy tickets. So despite the fact that for the likes of, you know, the ordinary golfing public, This is prohibitively expensive.
And also, I might add, I don't think the Ryder Cup is a particularly good spectator sport. It's much better to watch on television. But that notwithstanding, the resale market is still going to be very active, as it was in Bethpage, and indeed it was in Rome four years ago.
Now, Liv have told the captains and the staff that they are looking for investors, but something that cost £5 billion since its inception is unlikely to find anyone to row in behind it now, is it?
That's absolutely the case. I mean, as I said, this is that, like, as a business model, it's unsustainable. So if I was a corporate business, why would I want to invest my money in a business model that just isn't sustainable? Live golf isn't sustainable. But equally, the PGA Tour isn't sustainable. And Brian Rolap, who's the CEO of the PGA Tour, has a huge job on his hands
on his hands to try and sort out how do we make this viable from a business perspective. I'll give you one example. Scotty Scheffler, who's the number one player in the world, earned more money last year than the highest paid NFL quarterback given that NFL, that American football, is by far the most popular game in America. Something's not right with the maths.
All right. Well, now that the competitor's gone, maybe they can bring the fees down. Fionn, thanks so much for being with us. Fionn Davenport, they're a travel journalist and presenter of Golf Weekly. The Clare Byrne Show. With Aviva Insurance. Weekday mornings at 9.
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Chapter 4: How will the funding withdrawal impact the future of LIV Golf events?
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