How Saudi Arabia Took on Pro Golf — and Won

From The New York Times, I'm Sabrina Tavernisi, and this is The Daily.

This morning, fierce reaction after the PGA Tour's announcement that it's merging with its Saudi-funded rival, Live Golf. The news of this partnership, a shock to players, media and fans hammered out.

In a stunning reversal last week, golf's premier circuit, the PGA Tour, announced it was partnering with its upstart rival, a controversial league backed by Saudi Arabia.

A country that has never won an Olympic gold medal, Saudi Arabia has suddenly emerged as a major player in global sport. Whether it's gobbling up golf rights or signing yet another global soccer star, many roads now seem to lead to Riyadh. They've invested very heavily in golf, Formula One, WWE, they've had boxing there.

Now, Saudi Arabia, along with its long record of human rights abuses, has a powerful new seat at the table of international sports, a major success in a years-long effort to win influence. Today, my colleague Alan Blinder explains what was behind this surprising turn, what it means for Saudi Arabia, and for the business of sports.

So, Alan, I have to tell you that a group of producers at the Daily were very interested and became, in fact, quite obsessed with the question of Saudi backed golf. This live golf league. And I told them, no, thank you. I do not want to do a podcast about that. And they persisted.

So until last year, there was an absolutely unquestionably preeminent group in golf. It's called the PGA Tour. It was where the biggest stars played. They had played there for eons. If you wanted to make it big in pro golf, make money, be a star, you went to the PGA Tour, play a lot of tournaments in the U.S.

And why does it matter, Alan? Like, why does it matter that these two merged?

It matters a great deal, because Saudi Arabia has spent years trying to establish prestige on the global stage, to be a big player around the world, not just in sports, but culturally, economically, and the like. And look, Saudi Arabia is a country that is oil rich. Its economy is built around oil and natural resources. It's got a human rights record that has been slammed all around the world for almost time immemorial.

With good reason. They were responsible for the killing of Jamal Khashoggi, the Washington Post columnist.

Yeah, I mean, there's a long history of human rights abuses that have colored a lot of perceptions of Saudi Arabia. But this merger, I mean, this was essentially unimaginable a year ago. And here we are now, with the Saudis poised to have enormous sway over one of the world's biggest sports for years and years to come.

Okay, so Saudi Arabia getting a seat at the table in a big way. How did this deal come together?

Where did it all start?

Well, a few years ago, the Saudis have the Sovereign Wealth Fund. It's one of the world's largest. They wanted to diversify their economy. They wanted to be about more than oil. So they decided to get into sports as one of their investments, and golf is one of them.

Ignores them?

Yeah, that did not sit well, in Riyadh, it turns out.

And why? Why did the PGA Tour close the door in their face?

Well, they didn't need them. They thought, we control the game's highest, most elite levels. We've got a gazillion dollars already, it seemed. We don't need your help. Everything is fine as it is.

And why are the players so receptive?

For decades and decades, there have been arguments in golf about the economic structure, how people get paid, how they make money, how the wealth is spread around. And the PGA Tour had been pretty content not to really mess with what was working for them. But that didn't mean the players were happy with it. And there was a lot of discontent bubbling up among the players. There was a lot of nerves, a lot of anger, a lot of frustration.

And what was that anger and frustration about?

So the traditional way of winning money through professional golf, you play these golf tournaments, and really, you only make money if you do well. You don't get a baseline salary just for being a member of the PGA Tour historically. And you don't even just get a salary for showing up or a payment for showing up. You have to perform well enough to play the full tournament.

Wow. So it's not like baseball or football where you have a contract and you get money just by being part of a team. Yeah.

It is essentially pay for performance in professional golf. Now there are guys who, would, you know, they make money through some sponsorship deals, equipment deals, that kind of thing. But the PGA Tour money, the money that comes from actually playing the sport, was contingent on how well you played. So that meant only a handful of players were making the truly big bucks. There are people who are early career golfers, people who are never going to rise to Tiger Woods level stardom, who, they don't make much money, some of them even lose money on playing golf.

So into this steps the Saudis. And what do they do with this discontent? How do they use it?

Well, they decided to start their own league, which becomes Live Golf, as we know it now. And they know that, in order to take on the establishment, take on the PGA Tour, this entrenched monopoly, they've got to get players. There is no way around that. So they think big because they're the Saudis and they have the money to do this. They think big about people like Tiger Woods and Phil Mickelson, and Rory McIlroy and Brooks Koepka.

Okay. So do they get any of these guys?

Well, the rumors start coming fast and furious all over professional golf. Who might be willing to join Live? Who might be willing to leave the PGA Tour? And then, in February of 2022, it really burst out into the open when Phil Mickelson, who is, by all accounts, one of the finest golfers ever to play the game, won the Masters Tournament, won the PGA Championship, won the British Open. He's quoted in a new book that was coming out at the time, essentially saying that it didn't matter what the Saudis' baggage was.

So he's kind of saying, this is a very bad regime, but I hate the PGA more.

Yeah, that's right. And in fact, he really goes on this extended rant about the PGA Tour. He's got essentially a greatest hits list of grievances that he's been nursing for a long time. And he talks about how they're manipulative, they're coercive, they strong-arm people. He says, Jay Monaghan, the commissioner, you know, is a decent guy, but he won't do what's right for the players in the end.

So Saudi dictators helping golfers get leverage over PGA dictators, that's effectively what.

Yeah, that pretty much sums it up.

Saudi Golf League, Phil Mickelson, holy cow. He's facing some backlash, losing a big sponsor over his comments he made supporting a Saudi backed golf tour.

Sponsors are furious. People are condemning Mickelson, left and right. Several PGA stars, including Rory McIlroy, blasted Mickelson's comments. I thought they were naive, selfish, egotistical, ignorant. You know, watching Pat Perez there react and Justin Thomas, it's almost like they're sort of laughing at Phil, as if he sort of lost his mind.

So he is like being shamed in the doghouse.

It is golf's version of being canceled. Huh.

We'll be right back.

Hey, everyone. It's Esten Herndon, political reporter for The New York Times. When I became a journalist, I made a promise to my readers, like the way that doctors take an oath to their patients. I committed to bringing the truth to light, no matter which party, business, organization, or person I'm reporting on. I have to be persistent, I have to do research, and I have to push back when someone tries to hide or spin the facts.

So, Alan, you just told us that everybody's watching this upstart golf league that's going up against the mighty PGA. I mean, this is kind of an audacious challenge, right? So what actually happens?

Well, Live decides to host its first big tournament at a course just outside of London. And from really the very earliest stages, it's very clear just how different Live is going to be from the PGA Tour and the establishment tours.

Oh, huh. And it's shorter.

It's shorter. I mean, it's a day less of golf.

Right. What a relief. I mean, it's a day less of golf, but it's a day less of golf, but it's a day less of OK, what else?

Golf is such a grind that you feel like you're all out there by yourself and sometimes you're not playing well. It can really weigh on you and major champions. usually, the focus of the golf tournament is solely on the individual competition. in terms of live golf. You have 12 different teams live in its format, including the team competition as well.

Live. It's golf, but louder.

Golf, but louder.

Okay, so really different from the buttoned-up masters and their khakis. Who's playing? Like, who came to play at the tournament?

Well, Phil Mickelson resurfaced.

I love this game of golf. I've seen the good that it's done. And I see the opportunity for Live Golf to do a lot of good for the game throughout the world. And I'm excited to be a part of this opportunity.

Oh, wow. So he signed?

Yeah, Phil Mickelson signs.

I understand that many people have very strong opinions and may disagree with my decision.

And it's a big deal, because this is the guy who took all the heat and he decided, I'm going to play and go forward anyways.

At this time, this is an opportunity that gives me a chance to have the most balance in my life going forward. And I think this is going to do a lot of good for the game.

So he's in the field. Some other major tournament winners. For something that was in its infancy, they drew a pretty good crop of players out there.

Okay, so they've pulled off their first event. They've established themselves.

What happens next?

The thing that they desperately needed was a lot of attention. I mean, they were getting attention for their funding sources. They were getting attention for the politics surrounding it. But they were not really getting a lot of attention for golf. They didn't have a TV deal at the time.

Oh, wow.

So they also need places to play. And a lot of the really great courses in the US were very close to the PGA Tour. They wanted nothing to do with live golf. So you start looking at the list of courses in the country that can suit championship-level golfers, and there aren't many. But you know who had a lot of them?

Make golf great again. Why former US president and potential presidential hopeful Donald Trump backs the Saudi-funded Live Golf Series.

Two Live events will be hosted at Trump Golf Courses, starting with one next weekend at his Bedminster, New Jersey course.

So in July,

Hi, everybody.

Hello, Mr. President. Hi, everybody.

the Live Roadshow rolls into Trump's place in New Jersey.

There it is!

And that, you know, if you don't have a TV deal, then you've at least got a former president wandering around your events. Can you help me appreciate your decision to host this event?

Well, I've known these people for a long time in Saudi Arabia, and what they're doing for golf is so great. What they're doing for the players is so great. The salaries are going to go way up.

And you know what? The cameras came, the reporters came. It's not too often you see former presidents basically endorsing sports leagues.

And you have really the best players in the world, many of the best players in the world, and soon you'll probably have all of them.

Okay, so throughout all of this,

what's PGA doing?

Oh, they're absolutely seething. They are furious at the thought that players would ever consider going to this new upstart league. But they also know there's not all that much they can really do about it. Really, all the PGA realizes it can do is threaten players. They can say, if you cross the Rubicon, if you go play for Live, you can't play PGA Tour events going forward.

But can they even do that?

Well, this was always going to end up in a courtroom, and that is exactly where it went. A handful of Live players sued the PGA Tour. They said that the tour was trampling on their rights, all sorts of questions about whether the PGA Tour was abusing monopoly power, and more court filings than I would care to mention.

Okay, so the players sue, which on some level makes sense, right? It's like, why do you, PGA, get to be the final word on golf? You've controlled the game, but the truth is, you're this stodgy, old, unchanging thing that isn't really paying us very much. And so we're going to check out this upstart.

Yeah, and look, golfers had the idea that they should be free to pick where they play, when they play there, and they thought they should be able to move back and forth between these tours. pretty much at will. The PGA Tour wanted absolutely none of that.

Right.

So the PGA Tour, they're desperate to keep players, because, let's face it, having good players is what gets people to come to tournaments, it's what gets people to watch on TV, it is what makes this whole operation work.

Holy moly, that is money.

Yeah, I mean, look, the arms race of money has come to professional golf and it came with very, very little warning in the grand scheme of things. So the reality is, the PGA Tour, it starts to feel the financial sting of this. It's like they are suddenly shelling out many, many, many millions of dollars more than they had anticipated doing.

Okay, so PGA can't keep up with the Saudis in the money department, so that's not on their side. But do they have anything going for them at all?

Well, they've got a few things. They've got the argument of history, where the PGA Tour, we've been around, you know us, you like us, we should tolerate us. They've got that. And then there's also this element the PGA Tour keeps using of look where the money is coming from for Live Golf. And they really wrap themselves in this cloak of morality and say, you know, our money is pure.

Huh, meaning our red-blooded American money has none of that Saudi stain.

That's exactly the implication. There are family members of 9-11 victims coming out and questioning how could any golfer sleep at night if he takes money from Saudi Arabia. There are some protests.

So publicly, moral outrage, privately, something entirely different.

That's what it came to. It all started when a member of the PGA Tour's board messaged the governor of the Saudi Sovereign Wealth Fund and said, I'd like to set up a call and hopefully a meeting with you. And then they were off to the races. I'm not sure I can convey just how secretive this deal was until it was announced. There were members of the PGA Tour board who did not know about it until right before it was announced.

Given the complexity of what we were dealing with, it's not uncommon that the circle of information is very tight.

And the PGA Tour commissioner, who was central to all these negotiations, he suddenly finds himself on defense.

And I recognize everything that I've said in the past and my prior positions.

He goes and holds this press conference and he says, I know you're gonna think I'm a hypocrite.

And anytime I've said anything, I said it with the information I had at that moment, and I said it based on someone that's trying to compete for the PGA Tour and our players.

They said, I know you're gonna think that I just did this dirty deed.

I accept those criticisms.

But this is what I thought the game needed to survive. I mean, it was very much a business argument.

It put us in a position where, again, we're in control, we have an investor, and ultimately, you know, for the game, we're moving forward constructively. And if you look at the values of the game, I think that's what the situation warranted.

The PGA Tour, for the longest time, they got to claim this was a battle of morality, this was about the integrity of the game. The Saudi element made them a convenient boogeyman, but they ceded.

the rights to golf.

So the Wealth Fund's governor is about to be the chairman of this new company that's been created, and the Saudis essentially hold the purse strings for men's professional golf. You know, at this point, you can't really say it was a complete conquering of golf by the Saudis, because the PGA Tour still has a big and consequential role. But if I had told you a year ago that we would be at this point now, people would have laughed me out of the room. I mean, the Saudis have long wanted to be seen as not a pariah nation. You know, President Biden had condemned them as a pariah.

Upstart with deep pockets disrupts established monopolistic power that took for granted its position for a very long time.

Yeah, I mean just like you would see a start-up in Silicon Valley challenging an entrenched player, we see how it can happen in sports. We see how you can do it with, you know, billions of dollars from a sovereign wealth fund. And if you're a sports executive, you're thinking how do I make sure that I can't be caught asleep at the wheel? Because in a lot of ways, that's what the PGA Tour was.

Alan, thank you.

My pleasure.

Today the PGA Tour will begin their first major tournament since the deal was announced this year's U.S. Open. It follows a sudden announcement by the PGA Tour that its commissioner, Jay Monahan, was quote.

recuperating.

from a medical situation and that he would temporarily step aside. It did not give a timeline for his return.