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Disrupting golf: the Saudi-backed plan to shake up the sport

In his taking part in days, Greg Norman at all times stood out on the golf course.

Nicknamed “the Shark”, the Australian spent 331 weeks as the sport’s primary ranked participant in the Nineteen Eighties and 90s. With his signature straw hat and aggressive fashion of play, Norman was a particular determine in an in any other case stuffy and conservative sport.

Now, with the backing of funding from Saudi Arabia, he intends to shake up the historic sport once more. Last month, Norman was named the chief government of LIV Golf Investments, a brand new firm majority-owned by Public Investment Fund, the $450bn Saudi sovereign wealth fund.

The firm’s self-proclaimed purpose is to revolutionise the sport, luring the world’s greatest golfers to a string of latest tournaments and difficult its current energy buildings.

Just as the Indian Premier League and shorter T20 format have energised cricket with the creation of a brand new match that generates billions of {dollars} in media and sponsorship revenues, LIV and its backers consider that golf is ripe for the disruptive forces of latest concepts and cash.

“The commercial side of golf is growing, the broadcasting side of golf is growing, but golf has been stuck in the same box for [more than 50] years,” says Norman. “Competition is the best thing in the world for everybody.”

Norman’s appointment was introduced alongside the LIV’s $200m dedication to put money into the Asian Tour, the physique that runs golf tournaments in its continent. The sheer measurement of the funding despatched shockwaves all through the sport, on condition that the Asian Tour beforehand felt prefer it was the “younger brother” to its larger rivals, in accordance to Cho Minn Thant, commissioner and chief government of the Asian Tour

It units up a strong new competitor to the sport’s current giants, the US’s PGA Tour, the world’s main and richest circuit, and the European Tour.

Greg Norman of Australia drives off at the fourth tee at Shinnecock Hills Golf Club
Greg Norman says skilled golfers have at all times wished to have the option to play throughout the world and to be genuinely unbiased © Mark Phillips/AFP by way of Getty Images

LIV’s funding comes at an opportune time for golf. After years of declining participation in key markets like the US, UK and Japan, the pandemic has spurred a newfound curiosity in an open air sport that may be performed whereas socially distanced.

With one eye on the IPL cricket match — which has been constructed round a collection of fully new workforce franchises — Norman says that LIV is contemplating a plan to introduce extra workforce codecs right into a sport that’s largely based mostly on particular person competitions.

Although some main gamers are believed to be contemplating becoming a member of such a contest, rumours a few potential Saudi Golf League have been met with hostility by some in the sport. Irish star Rory Mcllroy criticised the prospect of a breakaway league as a “money grab”.

LIV represents the newest of a collection of sports activities investments by Saudi Arabia, a part of its efforts to diversify the oil-rich kingdom away from fossil fuels. PIF led the £305m acquisition of Newcastle United, the English Premier League soccer membership, whereas the inaugural Saudi Grand Prix in Jeddah this December will assist to decide the winner of this yr’s Formula One automobile racing world championships. Elite boxers, footballers, and golfers, have all competed in the nation in recent times.

Yasir al-Rumayyan, chairman of Newcastle United and governor of Saudi Arabia’s Public Investment Fund, in the crowd at St James’ Park in Newcastle
Yasir al-Rumayyan, chairman of Newcastle United and governor of Saudi Arabia’s Public Investment Fund, attends a match at St James’ Park in Newcastle © Jon Super/AP

Critics say Saudi Arabia is following a playbook adopted by its Middle Eastern neighbours, the United Arab Emirates and Qatar, of utilizing the world’s favorite video games to “sportswash” its fame, distracting from the nation’s document on human rights, the killing of journalist Jamal Khashoggi by Saudi brokers in 2018, and its army operations in Yemen.

Grant Liberty, the human rights organisation, estimates that Saudi has invested $1.5bn on sport in recent times, all “to wash away the stench of murder and brutality that hangs over the MBS regime”.

Norman insists that his involvement with LIV is rooted in a want to develop the sport. “No, I have not been used for sportswashing because I’ve been to Saudi Arabia, and I’ve seen the changes that have taken place,” he says. “Every country has done horrendous things in the past . . . just look at America with racism, for example, it’s just so embedded here, it’s just ugly.”

Whatever the motivations, the Saudi-backed enterprise has launched a battle to form the way forward for the sport that pits a blazer-wearing golf institution towards well-funded rebels. In one signal of the sharp competitors that’s rising, gamers in the US-based PGA Tour have been warned that they may obtain lifetime bans in the event that they be part of breakaway competitions.

“You’ve got some very strong-willed people who are very interested in protecting what they believe is the position, and the [Saudi-backed] disruptors,” says Chip Brewer, chief government of Callaway, the golf course and tools firm. “I don’t think it’s even cold, I think it’s just a hot war.”

Shifting allegiances

The Old Course at St Andrews is the world’s oldest golf course, extensively thought of to be the “home of golf”. The first written document of the sport in Scotland is a doc from 1457 by which James II, King of Scots, banned the sport as a result of it was a distraction from archery.

The Royal and Ancient Golf Club of St Andrews, golf’s governing physique outdoors the US and Mexico, nonetheless has a major function in the sport. The R&A writes guidelines and organises the Open Championship, which started in 1860 and is the oldest Major championship in the sport.

Reporters attend a press conference to announce the Saudi Arabian Grand Prix as part of the 2021 F1 calendar in Jeddah in 2020
Reporters attend a press convention to announce the Saudi Arabian Grand Prix as a part of the 2021 F1 calendar in Jeddah in 2020 © Amer Hilabi/AFP by way of Getty Images

Martin Slumbers, chief government of the R&A, argues that the sport can develop inside the current construction. “I do not believe we need a disruptive event,” he says.

He distinguishes between LIV proposals for breakaway golf leagues and initiatives corresponding to oil firm Saudi Aramco’s sponsorship of the Ladies European Tour, the girls’s golf group of which Slumbers is a board member. “I think there is a difference between wanting to invest and support within the current structure and wanting to be a disruptor,” he says.

The different energy base inside world golf is in the US, which hosts the Augusta Masters, the US Open, and the PGA Championship — the different three of Golf’s 4 “major” championships. The first US Open came about in 1895 and the sport grew in reputation all through the twentieth century, notably after the second world struggle.

The US PGA Tour was created in 1968 and has grown into the sport’s pre-eminent tour. Structured as a tax-exempt charity in the US, its annual revenues grew from $3.9m in 1974 to $229m in 1993, and it’s forecasting revenues of $1.5bn for subsequent yr.

The PGA Tour is competing exhausting to protect its standing as the most popular vacation spot for gamers, rising prize cash and different monetary incentives, whereas additionally warning gamers about the penalties of taking part in for breakaway competitions. In a memo despatched to members on November 22, Jay Monahan, commissioner of the PGA Tour, stated the tour would improve annual prize cash by 16 per cent to $427m in 2022. In complete, the tour expects to direct 55 per cent of its revenues subsequent yr again to gamers.

“The PGA Tour is stronger than at any time in our history and the game of golf has unprecedented momentum,” Monahan stated in an emailed assertion. “We are positioned to grow faster in the next 10 years than at any other point in our existence.”

Previously, the PGA’s solely actual challenger was the European Tour, a rival match circuit. That dynamic essentially modified when the two teams introduced a brand new strategic alliance in November 2020, with the PGA Tour agreeing to make investments a 15 per cent stake in the European Tour’s media manufacturing firm for $85m, offering some a lot wanted post-pandemic capital.

Irish golfer Rory Mcllroy has criticised the prospect of a breakaway league as a ‘money grab’
Irish golfer Rory Mcllroy has criticised the prospect of a breakaway league as a ‘money grab’ © Yoshi Iwamoto/AFP by way of Getty Images

“Overnight, they went from competitors to partners,” says Keith Pelley, chief government of the European Tour, who described the deal as “opportunistic” reasonably than defensive. “It’s just the beginning.” In a transfer designed to appeal to and retain prime gamers, Pelley has additionally signed a landmark naming rights cope with DP World, a longtime sponsor, that can enable it to improve its prize fund to $140m.

One casualty of this has been the Asian tour — which for the final twenty years has tapped the sport’s rising reputation in the area. The progress in the Asian tour had been helped by a strategic partnership with the European Tour, which was first signed in 2016 however which is able to lapse at the finish of the yr.

“For the longest time we were aligned with the European tour,” says Thant. “And it was all about protecting the rest of the world from the PGA Tour. Now it’s been turned on its head, where the European Tour and the PGA Tour are working together.”

The shifting alliances inside world golf have given the Saudi-backed efforts a gap. “We felt like standing on our own two feet, working with an investor in the Asian region,” says Thant.

A workforce sport?

Norman first proposed a breakaway World Golf Tour in 1994, however the challenge acquired little backing at the time. “Nothing has really happened” in the manner the sport has been structured in additional than half a century, he says.

That might change with LIV’s funding, which is backing a collection of 10 profitable occasions to be held on the Asian Tour over the coming decade and says it’s “making strategic investments” throughout the sport.

Bigger plans might quickly observe. One concept that LIV is exploring is team-based codecs. Golf already operates a small variety of profitable team-based occasions, together with the Ryder Cup, which is run by the PGA of America and Ryder Cup Europe. The Solheim Cup, the girls’s equal, is organised by the Ladies European Tour and the US Ladies Professional Golf Association. In each tournaments, groups representing Europe and the US compete towards one another.

But the construction of golf means groups can’t be purchased and offered. Unlike in soccer and basketball, golfers are particular person contractors. They work for themselves, whereas the excursions run competitions, combination media rights and monetise the protection. Despite the obvious independence of gamers, they sometimes require permission from their member tour if they’re to play on rival circuits.

Norman argues that this mannequin is a missed monetary alternative. “You look at that value that’s been generated through other sports, for other players and other franchises,” he says. “Golf has never recognised that or had the ability to capture that market.”

The world’s largest sports activities groups could be valued in the billions of {dollars}. Manchester United, the English Premier League facet, trades on the New York Stock Exchange at round $2.5bn. Norman says the Indian Premier League, which was launched in 2008, exhibits how new sports activities franchises can shortly develop in worth when backed by enormous broadcast offers and surging audiences. Last month, personal fairness agency CVC Capital Partners and Indian tycoon Sanjiv Goenka spent a mixed $1.7bn to purchase the two new groups that can be part of the competitors subsequent yr.

Saudi women spectate at the Saudi Ladies International golf tournament at the King Abdullah Economic City, north of Jeddah
Saudi girls spectate at the Saudi Ladies International golf match at the King Abdullah Economic City, north of Jeddah © Amer Hilabi/AFP by way of Getty Images

“It would be stupid of us not to be taking a look at that,” says Norman of investing in workforce competitions. “We see what sport as an asset class has done for franchise values, owners and fans . . . but to go down that course you have to change gears big time.”

Prominent gamers corresponding to Justin Rose, Bryson DeChambeau and Phil Mickleson have reportedly been approached to take part in the new initiatives, however few have spoken publicly about whether or not they would be part of.

The dangers are excessive for any participant contemplating becoming a member of a breakaway competitors — they may discover themselves excluded from main occasions in the PGA Tour or European Tour, or the Ryder or Solheim Cups.

“You go back to what happened in Europe with the European Super League in football,” stated McIlroy earlier this yr, referring to a failed try by elite soccer golf equipment to create their very own competitors and management the revenues.

“People can see it for what it is — a money grab — which is fine if what you’re playing golf for is to make as much money as possible,” he stated. “I’m playing this game to try to cement my place in history and my legacy and to win major championships.”

Keith Pelley, CEO of the PGA European Tour, and Yasir al-Rumayyan at the Saudi International in King Abdullah Economic City, Saudi Arabia
Keith Pelley, CEO of the PGA European Tour, and Yasir al-Rumayyan at the Saudi International in King Abdullah Economic City, Saudi Arabia © Andrew Redington/WME IMG by way of Getty Images

Executives on rival excursions argue that creating groups goes towards the essence of what it’s to be knowledgeable golfer. The notion that they’d be “beholden to someone who owns the team, an employment construct rather than independent contractors” is the foremost cause it’s so exhausting for leagues to persuade gamers to be part of them, stated one particular person shut to the PGA Tour.

It’s not the first time initiatives have been urged in the sport. The European Tour held talks with the Premier Golf League, a separate group pushing a team-format challenge, till deciding to accomplice with the PGA Tour. The PGL, which says it doesn’t have Saudi funding, nonetheless hopes to persuade the PGA Tour to work with it.

Despite the heated opposition, Norman and his backers consider the windfall of money they’ll bestow on the world’s greatest gamers and the pleasure of latest codecs will persuade many to break free. That is what will probably be required to get tens of millions of devoted golf followers to watch its occasions.

Norman says skilled golfers, notably these not based mostly in the US, have at all times wished to have the option to play throughout the world and to be genuinely unbiased.

“We had a huge amount of restrictions put on us,” he says. “Nearly four decades now we’ve been fighting for this right to be able to go be a member of the PGA Tour, the European Tour, the Asian Tour, and still have the right to go and play wherever else you want to go play.”

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