This whole LIV scene reminds me of the Underpants Gnomes of South Park.
The Gnomes had a business plan. Step 1 was to collect underpants. Step 3 was profit.
Step 2? They weren’t sure yet. Rest assured that meetings would be called and committees would be formed to uncover an answer.
LIV has collected golfers and headlines. Hey, Step 1 is already done!
They want to be profitable. A real golf league and a functioning business now that Saudi Public Investment Fund is no longer bankrolling them. That’s Step 3.
Step 2remains a question mark—but they have a concept of a plan.
LIV is trying to fundraise $250 million
According to a report by Dan Primack in Axios, LIV Golf is seeking to raise $250 million from new investors in order to save the league.
The league, which has lost several billion dollars since launching in 2022, claims it can reach profitability in just 20 months should it get the $250 million.
If that doesn’t come to fruition and LIV only raises, let’s say $170 million, the league will apparently be reliant on “rising team values and a new media rights deal” in order to reach profitability.
Now, let’s just break this down by common sense.
LIV has had four years with unlimited funds. Sure, you wouldn’t expect any “startup” to be profitable in the short term but the league never showed any reasonable signs of growth that would make you believe it could be profitable despite a bottomless wallet.
And before the Saudis left, LIV CEO Scott O’Neil said the league was five to 10 years away from profitability. That was with endless cash. Now they are 20 months away from profitability on a shoestring budget?
TV ratings? Never above 500,000 for any round in the U.S.
A media rights deal? The revenue from the Fox Sports partnership is described as “nominal” so it’s not exactly the $700-million deal the PGA Tour has.
Corporate sponsorship? A drop in the bucket from a few brands like Rolex but it’s very limited.
I mean, what part of this endeavor has been even remotely successful from a business standpoint? The Australian and South African events were well attended but the corporate money for golf tournaments is in the U.S. The DP World Tour would be way more stable and lucrative if that wasn’t the case.
Even in the event of LIV being able to fundraise $250 million—and it’s certainly possible someone out there is desperate or naive enough to throw around money like that—I’m highly skeptical it will be profitable at any point.
They will need to pay more than $250 million just to get Bryson DeChambeau back. Love him or hate him, he is the biggest draw for LIV.
How does this make any business sense?
And the franchise values? I’ll concede that a few of the superstar-led teams have something of a fledgling brand because of the players associated with them—such as DeChambeau with the Crushers—but who the hell cares about the Cleeks or Southern Guard? I think the D-III college down the road from me has a better chance at forming a meaningful brand.
What are the odds LIV stays alive?
There are some stubborn people in the LIV stable and billionaires investing in sports is definitely hot right now.
But one thing needs to be made clear here: LIV’s survival will rely entirely on its ability to secure a new media rights deal once its modest one with Fox Sports ends (the exact terms of the deal were not disclosed but LIV is currently in the second year of that partnership).
You can raise money and the league can maybe stay alive into 2027 but there will be no money to play for unless that rights deal is meaningful. Media rights are the financial lifeblood of every sports league.
It’s fair to say corporate sponsors might become more interested now that LIV isn’t associated with Saudi Arabia. There could be an opportunity there.
At the same time, it seems inevitable that purses will be declining sharply from the $30 million they are playing for now. The top talent won’t stand for that.
Can LIV survive? I highly doubt it. The math is not mathing.
What do you think? Let me know in the comments below.
Top Photo Caption: Lucas Herbert gets sprayed with champagne after winning LIV Virginia. (GETTY IMAGES/Tasos Katopodis)
