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.
LIV Golf chairman Yasir Al-Rumayyan has more leverage in negotiations with the PGA Tour after signing Jon Rahm to the nascent golf league. [Photo: Richard Heathcote]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.
SR:Â Maybe to stir things up I should call you a name, or something.
But no, I agree right back at you, and for the tour, short of shrugging their shoulders and saying, “you guys win, have professional golf!” (unlikely), a deal is the only way forward.
I guess the question now is what appeal the tour holds for LIV, and what demands they’ll make before a merger. As far as the appeal, I still think the PGA Tour is a pretty strong brand with a nice TV contract for the next few years and a legitimate cultural foothold in the US (something LIV lacks, and sorely needs). If you’re going to pay obscene amounts for players who are clearly not worth that much in terms of direct ROI, you’ll probably be happy to pay for a property like the PGA Tour that does have some in-real-life cachet.
Photo: Icon Sportswire
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.”
In other words, LIV has successfully sucker punched the tour, but it hasn’t solved any of its problems. To make money from golf, and to make it do what you want it to do, you need the game to be united. I’m not saying they’ll get rid of the LIV format, but I am saying they’ll be very eager to heal this rift with a merger so they can start building something attractive… changing the mode from destructive to constructive.
The way we’re talking, we’re treating the tour as though it has lost all initiative in this thing. Do they have any potential moves left, or is it all fait accompli from this point forward?
LKD:Â Yeah, listen, the PGA Tour can’t/won’t win the pay players arms race, but it does have some leverage.
The tour does have a certain amount of baked-in market share that isn’t going away no matter what. Institutional legitimacy, historical cachet and a conveyer belt of players. The tour may not have the current Jon Rahm, but they’ll almost certainly have the next one. And the one after that. The no-deal path forward here is just a mess in which nobody outside the hardest core golfers understands, which is why it’s in everyone’s best interest to make a deal. And it’s why they’re negotiating one.
I think the path forward the tour was hoping for (and maybe expecting) was a return to its status as the singular, dominant force in golf. That was the vibe after this framework agreement was announcement among tour supporters: That LIV was going away, LIV players would be punished, that tour loyalists would be rewarded, all of which never really made sense to me.
What they’ll get, assuming a deal happens, is something more stitched together. LIV exists as a series of tournaments that runs throughout the seasons, with the tour receding those weeks, then filling the gaps in-between. I don’t know if it’ll be that exactly, but it’ll be something like it.
Bleh.
Honestly Shane, this whole thing leaves me feeling kind of gross though. Which is why I’d like your thoughts on something else: Pro golf may be an annoying mess, but pro golf isn’t all of golf. There’s a whole recreational side of the game which is thriving. That’s cause for optimism, right?
Right?!
SR:Â Yes!
Golf remains a beautiful game that has only grown more special to me this past year, and this isn’t going to spoil anything about that. A 250-metre drive down the middle is going to feel just as sweet, and the meat pies after the ninth hole will taste just as good. “Golf” isn’t some league of multi-millionaires, it’s a way of life! Now please, you’re the expert, tell me what the hell I can do about my short game…
