How LIV Golf is making owner-operators – and multi-millionaires – out of Cameron Smith, Marc Leishman and others.
[Feature image by Getty images: Charles Laberge]
The best 100 golfers in the world represent the top golden house bricks of a pyramid with a base the size of Queensland. To the amateur mug punter, a professional ‘tour’ player’s skills are other-worldly, they appear ridiculously good and commensurately rich, many of them earning – prime your best Dr Evil impersonation – more than one million dollars for playing golf every day.
Yet most professional golfers, even tour players, are not wealthy. Not empire-wealthy. Not Rinehart or Packer-wealthy. Most of the world’s top players, while comfortably (even filthy) rich, are employees, contractors, worker bees for two mighty hives: the PGA Tour and the DP World (formerly European) Tour.
LIV Golf (you may have heard of it) wants to disrupt that dynamic. LIV Golf wants to make players owner-operators. Stakeholders. People with equity. Clout. Wealth. LIV Golf wants to make Cameron Smith and Marc Leishman part-owners of a billion-dollar baby.
That they called it Punch GC is unfortunate but repairable.
While names like ‘Majesticks’, ‘Crushers’ and ‘Hy Flyers’ seem naff to we of a certain (middle) age – and the concept and competition is so fresh as to be meaningless – LIV Golf’s bet is that the light’s on for the kids and the Randwick race-track party crowd.
And just as they’re watching short-form slugfests between the Daredevils and Knight Riders before a big night out in Kolkata, LIV Golf reckons that 20-somethings the world over are equally fond of watching a few hours of sport before dancing about to The Kid Laroi in Adelaide and Snoop Dogg in Miami – and all in the cool, branded merch of an adopted tribe.
Fanciful tosh? Perhaps. Rebel Sport is not, as we speak, full of kids in the stiff-billed hats of Cleeks GC. Yet LIV Golf’s backers have deep pockets. The Saudi Public Investment Fund is trending upwards of a trillion dollars (suck on that, Dr Evil) and LIV Golf has thus raised more seed money than any company in start-up history.
And they’re playing a long game. Their first season they called a ‘beta year’. They’ve given away ‘product’ on YouTube, using the season as a pilot for attracting a TV deal for 2023. They want to expose the product to as many consumers as possible. To paraphrase Tony Montana (Al Pacino) in “Scarface”: when you get the eyeballs, then you get the money. When you get the money, then you get the players.
Cricket lessons
Atul Khosla is the chief operating officer and president of LIV Golf Investments. If Greg Norman is LIV Golf’s hawk-eyed, thrusting, groin-forward face-man, Khosla is the sub-plotter in the back room: considered, calculating, meticulous. The accountant. The silent assassin. The stone killer.
He’s not a stone killer. He’s a nice, well-mannered, intelligent, 44-year-old fellow with an MBA who was head-hunted by LIV Golf from the Tampa Bay Buccaneers. And he appears a tidy complement and foil to the swashbuckling Shark.
For where Norman may bristle at barbs tossed at the audacious, rebel golf start-up ‘league’, Khosla will offer ‘respect’ for the critique and the position of good that it’s undoubtedly emanating from. And then, in considered, moderate tones he’ll calmly explain why he believes – and you may also believe, it’s completely up to you – that LIV Golf is a concept whose time has come.
“The way we’ve tried to look at it, first and foremost, is from the lens of the fan,” Khosla tells Australian Golf Digest. “You ask a question, Why are we here? What are we trying to achieve? We didn’t wake up saying, ‘Let’s have a disruptive rebel league.’ That’s not the ‘why’. The ‘why’ is that golf has a fan base that’s 65-plus, male, white, Caucasian, ageing year after year.
“That’s not where the future of golf needs to be. So how do we engage a 40-year-old? How do we engage a 30-year-old? What needs to happen with the product to engage that audience?”
LIV Golf’s answer is a league of golf teams. As Norman told The Financial Times: “You look at that value that’s been generated through other sports, for other players and other franchises. Golf has never recognised that or had the ability to capture that market.”
Well, duh, Sharky, cynics may scoff, that’s because golf is an individual sport.
Yet the partnership between Norman – the blond bomber, the uber-man, the bronzed son of Queensland – and Khosla, a cricket fan who doesn’t play golf and who grew up in Mumbai and a Middle Eastern Sultanate, has at its heart this tenet: just because it hasn’t been done doesn’t mean it can’t be.
And this: it worked in cricket.
Khosla is a cricket fan. Born in Mumbai, he lived in Oman from age 9 before being educated at the University of Wisconsin. His hero was, and remains, Sachin Tendulkar. He’ll tell you that Test cricket is the ‘purest’ form of the game though outside the ‘big’ Test series – Australia vs India, the Ashes – its appeal is waning.
And as Test cricket’s gone down, T20, spearheaded by the juggernaut Indian Premier League, has gone up to the point that each of the 12 IPL franchises is valued by Forbes at an average of $1.6 billion each. And based on that, Khosla says, “selling a golf team for a couple of hundred million dollars, it’s not unrealistic.”
The value of teams within a league is unquestioned in professional sport – basketball, baseball, football, cricket. Forbes values the LA Dodgers at $6.4 billion, Manchester United at $7.2 billion. The Mumbai Indians, bottom of the IPL in 2022, are the top-ranked team and worth $2.1 billion, according to Forbes.
Fair enough? There’s a lot of cricket fans, right? How is a four-man team of golf nerds in loud shirts and high pants valuable? It depends how many people consume them on television. Which is LIV Golf’s big ‘if’.
Skin in the game
Can it work? It has for other disruptors: IPL, World Series Cricket, Super League. LIV Golf isn’t a fly-by-night operation, it’s not been created on a whim. They’ve spent years war-gaming it. They’ve done the numbers.
Yet according to Matt Manning, chief executive of sport and entertainment marketing agency MKTG Australia, “there’s one big problem – they don’t have a natural home.
“When you talk about the Delhi Daredevils or Mumbai Indians, or any team in Major League Soccer, women’s basketball, anything, they represent cities and have a following based on a geographical location. I don’t know how easy it is to franchise a sports team without a geographical base.”
Manning does concede that the lack of a geographical base doesn’t appear to harm the popularity of eSports teams, the top 10 of which, according to Forbes, are worth an average $500 million each. He also points to the Aussie ‘Punch GC’ team and says, “perhaps the ‘hook’ is for countries.”
Khosla, of course, will tell you that Smith and Leishman can be owner-operators of a massive golden goose.
“Let’s take a team, let’s take Punch GC. Cam’s come on board, he’s captain and he has equity in his team, he owns a percentage of it. We [LIV Golf], the league, own another percentage,” he says.
“So, Cam is going to bring four players onto his team, three others and maybe one reserve. And those players – eventually, it won’t happen overnight, it’s going to take 12-18 months – will ‘fold into’ what we call the commercial rights.”
The idea is that the player relinquishes personal sponsorships that occupy real estate on their collar, arm, golf bag, and fold into the team’s commercial rights. Then they would take a salary from the team, which essentially covers the loss. Players would then get about in the same hat and offer the same space on the left sleeve, right chest, shorts, bag. And then Smith and Leishman – or more likely smart-money types in their employ – would head out to sell the team to sponsors. To commercialise the team collectively.
A team would also derive income from merchandise sales, the prize purse of any given tournament and the percentage they receive, win, lose or draw, from LIV Golf, to wit “the league”, much like an NRL or AFL club receives funding from their governing body.
The plan then, could be, after three, six, eight years building the value of the brand – reaping income from merch, prizemoney, stipends from the league – that individuals in the team could sell a percentage of the team to whomever might buy in.
And if you’re a professional golfer, mid-40s – well, any age – the lure of the mother-of-all-super-nest-egg-golden-handshakes is enticing – particularly for far less work and far more pay than you’d earn on the PGA Tour.
A franchise’s value is also derived from the age-old ‘supply-and-demand’. There is a finite number of teams, capped at 12. As IPL has shown, billionaires love to wee for distance – owning a LIV Golf franchise could be the new mega-yacht or golden penis tower. Norman reckons they’re lining up to buy in.
TV eyeballs = Wealth
All value, of course, depends on the eyeballs LIV can glean via the still-omnipotent power of television. Streaming and internet is all very well. And they say YouTube is how we’ll all consume content on ever-smarter televisions in the future. But the ‘TV deal’ remains money, baby. That’s where you make bank. That’s how you make wealth. Norman is typically bullish, telling ESPN: “The interest coming across our plate right now is enormous. We’re talking to four different networks… offers are being put on the table.”
According to Front Office Sports, there could be as many as six bidders with Fox the leading contender while it’s believed major networks NBC, ESPN and CBS won’t bid because of their connections to the PGA Tour.
“Eventually we have to [be on television] for the commercials to work,” Khosla says. “That’s the bread and butter for any league. And that’s the conversation we’re having now.
“[Last] year [was] a beta start for us. We wanted to put the product out everywhere so that people could understand it and how we’re packaging it up.”
The LIV Golf branding and ‘look’ is distinctive. The ‘Studio 54’, ‘disco’ font, the melange of lime-green and tropical-aquamarine in the colour scheme, the baubles and mirror (golf) ball themes. On course, the team banners are everywhere. The leaderboard lists the hole a player’s currently on (not what he’s finished) and how many there are left. TV broadcasts show most if not all players. There are very few replays. They sell that as a plus: “Don’t blink.”
Like T20 cricket, LIV Golf sells less as more. It’s over in three days, not four. The play-action is packed into a 270-minute broadcast rather than six hours. It’s a different look and feel to the usual PGA Tour and DP World Tour coverage.
According to another executive from sports media agency MKTG Australia, while there is no shortage of golf on television courtesy of the PGA Tour and DP World Tour, “most of it is fairly mundane”.
“There are events pretty much every week of the year. It’s rinse and repeat, week in and week out. Audience numbers and eyeballs only really peak around the Major championships, Ryder Cup, Presidents Cup and maybe a handful of events such as the Players – because audiences are drawn to watching the best players play against each other.
“I would suggest LIV Golf has the money to buy the space [on television] and may need to initially in order to further broaden their reach and understanding of what they’re trying to achieve.
“If they continue to sign more high-ranked and high-profile players, this pendulum will swing pretty quicky, in my opinion.”
Year two of LIV
The known portion of the 2023 LIV Golf schedule looks this way:
February 24-26: LIV Golf Mayakoba – El Camaleon Golf Course, Mexico
April 21-23: LIV Golf Adelaide – Grange Golf Club, Australia
April 28-30: LIV Golf Singapore – Sentosa Golf Club, Singapore
June 30–July 2: LIV Golf Valderrama – Real Club Valderrama, Spain
The Mexico stop looks set to be the season-opener with other yet-to-be-confirmed sites (at the time of print) including Arizona, Florida, Oklahoma, Washington DC, Boston, West Virginia, New Jersey, Chicago and Miami in the US, plus London internationally.
Sources tell Australian Golf Digest the Greenbrier’s Old White course is expected to be the West Virginia site, held in early August. West Virginia governor Jim Justice, owner of the Greenbrier, acknowledged hosting the breakaway circuit to local newspapers last year after LIV officials were seen on the grounds.
