LIV Golf claims it has a lifeline, but mere cash won’t be enough to survive | Opinion
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Who could have imagined that a press briefing by a woefully overmatched executive at a golf club in Bedminster, New Jersey, would prove light on facts, vague on numbers, lacking in transparency, destitute on vision and abundant on bluster, yet still be spun positively by a corps of credulous gombeens?
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LIV Golf’s CEO, Scott O’Neil, announced Wednesday that he’s found a new backer for the league, seemingly defying expectations since he’s been pitching the Three Mile Island of investment opportunities — a business in meltdown, at risk of implosion, thoroughly toxic and with workers desperate to flee.
“It's very good news. We’re very fortunate that a lead investor has signed a term sheet approved by our board, which will carry and fund LIV going forward,” he said.
Term sheets aren’t deals, obviously, and LIV’s board will approve conversations much as a drowning man will eagerly agree to discuss the price of a life vest. The pertinent details went unmentioned, however. Who is the investor? How much is being committed? On what restructuring terms? For what purposes? Over what period of time? With what contingencies relating to LIV’s players? By day’s end, the business press was reporting that the “investment” is a loan. Which may explain O’Neil’s artful phrasing, since a commitment to “carry and fund LIV going forward” could be made by a company buying into the vision or by a back alley loan shark.
“What I can tell you is what I told you,” was the CEO’s response to subsequent inquiries. “We are keeping the details of the deal, the investor, and much of what you might want to know in this second phase out of the media.”
He refused to say how the Saudi Public Investment Fund’s ownership fits in the future, if a bankruptcy filing remains possible, when the investment will be finalized (“I wouldn’t want to put a deadline on it.”), or even whether LIV’s season finale in Michigan will take place.
“We have not made any final formal decisions and hope to in the coming weeks,” he said of an event scheduled to begin in 20 days.
Sourcing funding wasn’t O’Neil’s toughest task. There are always lenders willing to extend credit or vultures happy to assume LIV’s enormous debt and leverage it against other high-performing businesses for tax benefits. But neither of those represents a vote of confidence in the future of the product. That has to come from O’Neil’s players, and it’s increasingly unlikely he’ll get it. Sure, he can keep Bryson DeChambeau on board because he imagines himself the sun in LIV’s solar system, but what of Jon Rahm, Tyrell Hatton, or Joaquin Niemann? They have competitive runway and career ambitions. If presented an opportunity to leave, they’re unlikely to forgo it.
The best-case scenario for those who stay, based on a report in the Financial Times, is the Saudis paying them pennies on the dollars they’re owed in return for a liability release, then taking equity in LIV 2.0 because there’s no cash. And agreeing to smaller purses, a reduced schedule, the possible loss of world ranking points and pathways that narrow by the day. Those who still have game and want to return to the PGA Tour know they’ll need to use 2027 to earn status because none will be gifted entry into the elite upper tier of the Tour’s new structure debuting in ’28. Nor is the DP World Tour guaranteed to be a safety net. The terms on which Wentworth recently accommodated some LIV golfers expire this year. Europe could cease providing releases for those players to compete on LIV going forward, forcing them to choose a lane.
No wonder O’Neil said Dean Burmester was the biggest star at his tournament in South Africa. Parochial fan favorites may be all he has to build a circuit around if his superstars bugger off.
Four years and billions of dollars later, LIV can point to imminent cuts — in staffing, purses and tournaments — but not to an articulated vision for a sustainable business that offers anything beyond the profligate generosity of a sovereign wealth fund. It’s fitting that the league is competing this week at ground zero for grifters, self-dealers and opportunists trying to figure out how to keep the racket going just a little longer.
But investment bankers — unlike voters, Saudi executives, online toadies and professional golfers — aren’t easily suckered.
Eamon Lynch is a columnist for Golfweek and a frequent contributor to Golf Channel.
This article originally appeared on Golfweek: LIV Golf claims it has a lifeline, but mere cash won’t be enough to survive | Opinion