Yahoo Finance LIV Golf's struggles show TV networks want sports — just not all sports
Last week's bombshell agreement struck between LIV Golf and the PGA Tour raises questions about the future of the upstart league that shook up the professional golf world last year.
Even if the deal gets through antitrust regulators, it's unclear whether LIV will exist beyond this year. According to a report by ESPN, PGA Commissioner Jay Monahan, who will be CEO of the combined entity, will evaluate whether LIV will continue at the end of its season in November.
In an interview at last week's RBC Canadian Open, Monahan confirmed there will be a "comprehensive empirical evaluation," adding, "The PGA and LIV haven't concluded the definitive agreement. ...But what is in place is a commitment to make a good-faith effort to look at team golf and the role [LIV] can play going forward."
In the latest turn in this saga, news broke Tuesday that Monahan would be stepping away from day-to-day operations to "[recuperate] from a medical situation," the PGA said in a statement.
Chief operating officer Ron Price and president Tyler Dennis will lead the day-to-day operations in his absence, according to the Tour.
'We absolutely need a broadcast deal'
So how did we get here — and what went wrong with LIV? Or is it all going to plan?
Backed by the Saudi Public Investment Fund (PIF), LIV took the golf world by storm in 2022, pouring big money into attracting big-name players, pitching fans on its new format featuring loud music at the tee boxes and a team-orientated play style. Multiple contracts for players were reportedly worth more than $100 million.
But it was unclear how LIV Golf would make money without major broadcast deals — a key source of revenue for sports leagues and one of the biggest issues facing the new upstart.
Last year, LIV appeared eager to secure a US TV deal, with former LIV Golf President and COO Atul Khosla telling Yahoo Finance in August, "At the end of the day, we absolutely need a broadcast deal."
Assuming LIV continues to exist beyond this year, there could be an opportunity for LIV to leverage the Tour's existing network relationships to attract a bigger audience. The PGA Tour already has an existing deal with CBS (PARA), NBC (CMCSA), and ESPN (DIS) reportedly lasting through 2030.
But the most important question hanging over this new PGA-LIV entity is whether the former brand will exist at all.
"I still hate LIV," PGA Tour member and third-ranked golfer in the world Rory McIlroy told ESPN this week. "I hope it goes away, and I would fully expect that it does. I think that's where the distinction here is. This is the PGA Tour, the DP World Tour, and the PIF — very different from LIV."
The PIF appears to have won its toehold in men's professional golf with this new arrangement — the LIV brand could be collateral damage.
LIV eventually struck a multiyear broadcast and streaming rights contract with The CW, controlled by Nextstar Media, in early 2023 after struggling to land a sizable TV deal.
According to The Wall Street Journal, Apple (APPL) and Amazon (AMZN) — which have been aggressive in pursuing various sports partnerships — passed on a deal last year.
Major networks including ESPN, CBS, NBC, and Fox also reportedly passed. Prior to the CW agreement, LIV had been live streaming tournaments on YouTube (GOOGL) and Facebook (META).
The CW broadcast deal was reportedly structured in an unusual way. The Saudi-backed league would not receive a rights fee from the network for at least the first two years. Instead, LIV Golf would only share in the advertising revenue. The contract was said to last for at least three years, according to reports.
But it was an odd pairing, as The CW mostly caters to a younger, female-driven audience with shows like "Riverdale," "The Flash," and "Super Girl."
"People who watch golf have very set media habits," Anthony Palomba, professor of business administration at UVA's Darden School of Business, told Yahoo Finance. He questioned the appeal of The CW as a network partner for LIV, along with golf viewers overall given its base.
LIV Golf's viewership on The CW fell 24% week-over-week between the league's February season-opener in Mexico and its follow-up event in Tucson. LIV, which declined to comment to Yahoo Finance, stopped reporting audience numbers following those events.
Sportswashing concerns linger
Last year, much of the controversy surrounding LIV focused on criticism the Saudis were continuing their 'sportswashing' campaign through golf.
Specifically, the PGA Tour's efforts to fend off LIV's arrival last year focused on Saudi Arabia's ties to the 9/11 terrorist attacks, which were invoked by Monahan and other Tour loyalists throughout 2022.
"I recognize that people are going to call me a hypocrite," Monahan said during the RBC Canadian Open interview, referencing comments he made last year regarding the Saudi's 9/11 ties. At that time, he said PGA members would never have to apologize for being part of the PGA Tour.
Flash forward a year later and Monahan now says circumstances have changed: "I looked at where we were at that point in time, and it was the right point in time to have a conversation."
"Saudi operatives played a role in the 9/11 terrorist attacks, and now it is bankrolling all of professional golf," the coalition 9/11 Families United said in a press release following the news of the merger, adding the organization was "shocked and deeply offended."
Moving forward, Palomba warned broadcast networks must avoid alienating viewers in the wake of the controversies.
"Consumers who are upset, insulted, or angry surrounding social and political movements will voice their opinions through their wallets and where they invest their attention," he said. "Networks continue to hemorrhage consumers, and so it is critical for them to maintain themselves in the graces of their existing audience members and advertising partners."
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com
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