$1billion in pay sweeteners. $780m costs. ZERO income
As Greg Norman faces being sidelined, the true scale of LIV golf spending revealed
THE LIV Golf tour faces challenging tests to its ambitious business model in the coming years, while its figurehead, Greg Norman, appears at risk of being sidelined.
Backed by Saudi Arabia’s Public Investment Fund, the LIV project has already paid out more than $2billion (£1.64bn) in nine months since its first event at the Centurion Club outside London last June.
That cash has been spent either on staging events last year ($784m, or £644m) or paying massive ‘signing-on’ fees to golfers to join LIV. Somewhere north of a billion dollars has already been committed to signing up Phil Mickelson ($200m), Dustin Johnson ($125m) and Cameron Smith ($100m), among others, before they hit a ball.
The mantra of LIV’s executives has been they want to ‘grow the game’, and shake up the commercial side and expand revenues. The reality so far is a few dozen golfers becoming massively enriched. Johnson’s LIV prize money alone (aside from his sign-on fee) has been $36,675,767. He will add more today as the second LIV event of 2023 concludes in Tucson, Arizona.
To put that in context, from nine completed LIV events, Johnson has earned enough prize money to lift him into the top 25 PGA Tour all-time winnings list. More context: Johnson has made $10m more in LIV prize cash than Ernie Els did in winnings on the European Tour ... in 25 years.
LIV earned nothing from TV last year as the start-up had no broadcasting partners, made close to nothing from commercial partners, and was selling discounted tickets to fans. Court records disclosed in an ongoing legal battle in the USA between LIV and the PGA Tour quote LIV lawyers as saying LIV revenues were ‘virtually zero’.
Against this, 68-year-old legend Norman at least got LIV up and running, persuading big names to join, albeit igniting civil war in global golf in the process. But a source with knowledge of PIF’s thinking has told the MoS that Norman’s sometimes ‘abrasive’ nature has been noted.
There is speculation that he may move ‘upstairs’ as LIV appoint a new CEO. One source said: ‘Some at PIF have not been impressed [by] how combative he can be. They’d prefer someone with a more conciliatory tone; a peacemaker.’
One of Norman’s gaffes was when he was asked about the murder and dismemberment of journalist Jamal Khashoggi in 2018 in a plot US intelligence agencies say was ordered by Saudi’s Crown Prince Mohammed bin Salman. ‘Look, we’ve all made mistakes,’ he said.
Another blooper occurred when he was photographed apparently stalking a US journalist being kicked out of a LIV press conference. Norman told the writer he was unaware of the ejection, but the picture showed he wasn’t telling the truth.
Last month, after PGA Tour stalwart Rory McIlroy said Norman should step down as LIV’s CEO to ease tensions between the two sides, Norman responded with a slightly menacing: ‘Watch what you say’.
McIlroy had said there needs to be ‘an adult in the room’ to ‘mend fences’ between LIV and the PGA Tour. The upper echelons of PIF want a rapprochement with the PGA, and Norman is taking a lower-profile role before a yet to be appointed ‘peacemaker’ steps in.
LIV are privately bullish about their business model, which will cost some $1bn a year to pay $405m a year in prizes for 14 events, and stage and film those events.
They have various TV deals but are not earning hugely from them. Instead LIV still pay, and crucially control, all the TV output. This is important because directors can ensure the cameras capture sponsors’ names on hats, sleeves and chests.
The LIV hierarchy accept that massive investment over multiple years will be needed before what they forecast as substantial revenues in perhaps 10-15 years. Privately executives speak about having the resources and time to persist.
One key income stream in years to come will be the sale of the LIV’s 12 teams (or franchises) of four players to high net worth individuals or corporations. Each team by that point will, according to internal forecasts, be making tens of millions in prize money each year, and even more from sponsors and endorsements. ‘Franchise fees’ will be split, with 75 per cent going to LIV and 25 per cent to each team’s leader.
If all this sounds extraordinary, then so does Johnson earning approaching $40m from LIV for 36 days’ work in the past nine months. And that happened.
dmg media (UK)