It’s official: Jon Rahm, the reigning Masters champion, is the newest member of the LIV Golf League.
More interestingly, though, the news comes against a backdrop of ongoing negotiations between the PGA Tour, and LIV’s financial backer, the Public Investment Fund of Saudi Arabia. Earlier this year, the pair announced a framework agreement along with the DP World Tour that would see the two form a joint entity together in an effort to unify golf, though by all reports negotiations seemed to have stalled.
Does the Rahm news make a deal more likely? Or less? That’s what we asked Golf Digest‘s Shane Ryan and Luke Kerr-Dineen…
Shane Ryan: Luke, I have about a million thoughts on Jon Rahm going to LIV, but today you and I are tasked with hyper-focusing on what might be the most important part: does this make a deal with the PGA Tour more or less likely?
Based on how fast things move, and how chaotic it all seems – the biggest lesson we’ve learned is that nobody really has a plan beyond throwing money at things and reacting (usually poorly) to people throwing money at things – I’m almost convinced that whatever I predict is going to be wrong, but hear me out:
This whole Rahm deal makes it inevitable that the PGA Tour will go through with the PIF merger, albeit possibly on less favourable terms than before. My reasoning is that the framework agreement, which calls for a more formal arrangement to be finalised by December 31, made it abundantly clear that the tour will do what’s necessary to survive, and that it doesn’t really seem to have the stomach for a protracted fight. If they thought some angel investor was going to swoop down and save them, the wealth flex from LIV puts an end to that, and now if they want to continue existing in anything like their current form, they need to take the cash.
From LIV’s side, it might be tempting to think that they’ve reached the point of saying, “Hey, why not just declare war and outspend them?” But I think there’s still value in merging and essentially controlling the operation, and they just gave themselves a leg up.
Am I right?
Luke Kerr-Dineen: Quite boringly, I agree.
The fact is the PGA Tour started this PIF negotiation in a weak position; the tour overstated its strength in an attempt to get its members back on board after the shocking June 6 announcement that left many of them feeling betrayed. It’s simply naive to think somebody else would be willing to write all the cheques and outsource all the control, as was posited when this was announced earlier this year. Now, with the deadline looming, that reality is coming to bear.
I don’t have any inside knowledge on this, but if I had to guess, the tour didn’t like the outlines of the deal that was unfolding, which stalled the negotiations. Who knows whether they were actually willing to walk away because of it, and then, the Rahm-to-LIV thunderbolt hits.
It’ll be an incredibly bitter pill for the tour to swallow, but this is what exerting leverage in a negotiation looks. It’s a not-so-gentle-reminder of the power dynamics at play. And yet, the reason I think a deal will get done is because even still, it’s in the tour’s best interests to get one. The PGA Tour is in a weaker position now than it was a year ago. Rahm’s exit makes it weaker still – and you know it won’t stop there.
It’s an unenviable hand that keeps getting weaker, with no matching ability to punch back. Compromising its way over the finish line and moving on is the only path I can see forward.
Plus, when you’ve spent this much money, like LIV has on Rahm, you also have to reckon with the fact of what you bought, and what it’s actually going to deliver. I can’t be the only one who thinks signing Rahm isn’t actually that big a deal from a TV ratings standpoint – I’ve always liked Rahm, but how many people out there are going, “I need to be able to watch Jon Rahm every week.”