Opinion: The billion-dollar Saudi-U.S. golf deal achieved nothing and may cost everything

Scott Stinson is a writer based in suburban Toronto and author of the Unobstructed Views newsletter.

At his media conference on the eve of last year’s RBC Canadian Open, defending champion Rory McIlroy seemed a bit stricken, as though he had just been informed of the death of a pet, or the scuttling of his favourite yacht.

News had broken that morning of the stunning peace deal between the PGA Tour and LIV Golf, the rival league bankrolled by Saudi Arabia’s sovereign wealth fund, which had been embroiled in a bitter arms race with the U.S.-based Tour for two years.

Mr. McIlroy, who had been among the PGA Tour’s most ardent defenders, admitted that he had been caught by surprise by a quasi-merger that had been struck in secret that would see LIV’s Saudi backers take a position in the Tour. Like the whole of the golf world at that moment, he was curious to see where the paper-thin agreement between the rival leagues would go. “I still hate LIV,” Mr. McIlroy offered. “Like, I hate LIV,” he said again, it case it was unclear.

A year later, where has men’s professional golf gone after that framework agreement was struck? Precisely nowhere. Possibly backwards. And, as both sides in the PGA-LIV divide argue over how to divide the billions of dollars that have poured into the sport in recent years, their failure to figure out how to get more of the world’s best players in the same events again threatens to do long-term damage to the industry that has made them incredibly wealthy.

A recounting of what has happened in the 12 months since the PGA and LIV ceased hostilities is mostly a recounting of what hasn’t happened. A December deadline to formalize their partnership with a new for-profit entity passed without a deal and was extended seemingly indefinitely. Both tours carried on with separate schedules for 2024, and with the pro golf season already half over, are likely to do so in 2025 as well.

Months of quiet were punctured with news in December that suggested the two entities were in an arms race again.

First came the announcement that LIV Golf had poached two-time major champion Jon Rahm from the PGA Tour with a reported US$300-million contract, and the Tour followed in January with an announcement that a group of American sports owners such as John Henry (Boston Red Sox) and Arthur Blank (Atlanta Falcons) had invested US$1.5-billion in a newly created entity, PGA Tour Enterprises, with the potential to double that amount in the future.

Left unclear is whether the Saudis will have any involvement with the new PGA Tour Enterprises and how it would co-exist with LIV Golf in the future. There have been reports that some players on the PGA Tour’s policy board no longer think they need to partner with LIV and sell equity to the Saudis, and indeed Jimmy Dunne, one of the Wall Street power brokers behind last year’s PGA-LIV agreement, resigned his position from the policy board two weeks ago, citing “no meaningful progress” on a formal transaction.

Mr. McIlroy called Dunne’s departure “a huge loss,” and said he had little confidence now in a deal being completed.

Reports have said the players who control the policy board are split on how to allocate equity in the new for-profit entity to be formed by LIV’s backers and the PGA Tour. Some want the bulk to go to the high-profile golfers who resisted LIV’s lucrative offers, others say the wealth should also flow to lesser players who are necessary for the Tour to function. Also unresolved is whether players who jumped to LIV for big paydays would be able to receive the spoils of the new entity if they returned in some form. One imagines the occasional sniping between the sides hasn’t made that decision any easier.

The off-course drama, meanwhile, hasn’t increased the interest in the action on course. Television ratings for The Masters were off 20 per cent this year, and ratings for some PGA Tour events have dropped by as much as a third from a year ago. The ratings for this month’s PGA Championship, buoyed by a tight battle between Xander Schauffle and LIV defector Bryson DeChambeau, were still lower than every year from 2018 to 2022. The ratings for LIV’s own events are paltry, usually a tenth of those of a PGA tournament, and down on the charts among niche events such as bowling and college softball.

The practical effect of the ongoing bifurcation can be seen at this week’s RBC Canadian Open, where the 156-player field will include just 12 of the top 50 in the world rankings, and 34 of the top 100.

Mr. McIlroy will be one of them. At least this time he just has to worry about playing golf.