The Sponsorship Impact of the PGA-LIV Merger

By: Ben Klein

The PGA Tour has made the decision to join forces with its rival, LIV Golf, in a merger that aims to establish a powerful and dominant entity in the world of golf. If the merger is approved, the newly formed company, which is yet to be named, is expected to dominate the sport of golf.

LIV Golf is a professional golf league that officially launched in June 2022, backed by the Saudi Arabia Public Investment Fund, under the control of Saudi Crown Prince, Mohammed Bin Salman. The league aimed to revolutionize the sport of golf but faced controversy upon its debut. According to Golf Monthly, “Many people believe LIV Golf to be sportswashing to cover up Saudi Arabia’s appalling human rights record”.

LIV Golf has successfully attracted several high-profile players away from the PGA Tour by offering enormous contracts. According to the New York Post, Phil Mickelson's deal is reported to be worth around $200 million, while Dustin Johnson's contract is estimated at approximately $125 million. Similarly, Cam Smith, Brooks Koepka, and Bryson DeChambeau's deals were also valued at around $100 million each. In addition, LIV Golf provides substantial payouts to tournament winners, surpassing what the PGA Tour can offer. The lucrative financial incentives are one of the major selling points of LIV Golf.

Many golfers who stayed loyal to the PGA even after being offered millions of dollars are now in shock by the recent merger news and had found out about this news on Twitter. According to Sporting News, World No. 2, Jon Rahm was caught by surprise as well. "It's not easy as a player to wake up and see this bombshell," Rahm said. Many players feel betrayed and humiliated by the news and want PGA Commissioner Jay Monahan to resign. .

When LIV Golf launched, brands faced uncertainty about the players who were leaving PGA and committing to LIV. Players like Dustin Johnson and Sergio Garcia had cut ties with Adidas and Phil Mickelson was dropped by KPMG after his controversial remarks. With the merger between LIV Golf and the PGA Tour, the pivotal question arises, how will sponsors perceive this?

According to Chicago Business, “AT&T Inc., FedEx Corp., Deere & Co., Citigroup Inc. and other corporations have shelled out millions of dollars over the years to sponsor PGA Tour events. It isn’t clear what effect the tie-up…would have on existing agreements.” When asked about this merger, these companies declined to comment.

The impact of this merger on players, sponsorships, and broadcast rights is a central concern, and it will be interesting to observe how these aspects unfold and evolve in the future.