LIV Golf has got one thing right, and the PGA Tour may have to copy it

There must be days when Jay Monahan can sympathize with Winston Churchill’s cynical remark that the best argument against democracy is a five-minute conversation with the average voter. As commissioner of a “member-led” organization, Monahan is committed to the political reality that the lower ranks of the PGA Tour—many of whom cannot be identifiable on a list by fans—have power equal to their supreme power, upon whom the success of his product depends.

These are some egregiously tight handcuffs when you fight a group fueled by personal animosity and funded by Saudi oil money, with no clear accountability for either. Which raises the question as to whether the PGA Tour’s business model may one day be a holy cow that Monahan and his board of directors are forced to slaughter.

The negatives associated with LIV Golf are almost as plentiful as the social media bots it employs to “what about” critics and rally those whose receptivity to automated arguments is painfully evident in the body politic. There’s the sporty wash on behalf of a hateful regime, questionable competitive benchmarks, ludicrous rifle starts, shallow fields and the ever-changing team make-up. But LIV may also have gotten one thing true that its rivals face an uphill battle to copy: hiring their talents.

It has always been a self-congratulatory gospel of golf pros that they only eat what they kill, and that they don’t get paid if they don’t perform. This is not true in most major sports, where guaranteed contracts are the norm. LIV has brought this concept to golf, but it’s expected to heap on it. Contracts do not guarantee athletes a place in the game and do not protect them from falling off the bench at the big moments, but LIV contract recipients will remain in the tournaments regardless of their poor performance. They are required to continue to publicly contaminate themselves with burdensome scorecards.

a report: PGA Tour prompted a law firm to lobby against LIV Golf on Capitol Hill

In normal business endeavors, hiring talent makes sense. Athletes trade freedom in their schedules for financial security, and teams or federations have the ability to control their products and protect assets. The response to LIV by the PGA and DP World has been to put lipstick on an antique that might not be fit for purpose. The increases in prize money and rewards that have been announced come with a big caveat: they are performance based, and money has to be earned. The only guarantees are tee time and opportunity, and enough bad performances will jeopardize both.

LIV is widely derided for the amounts it has spent on contracts (avoid thinking about some of the people who have fallen for the PIF when the crown prince considers the cost of financing Greg Norman’s complaints), but the problem is cash is less than it is blessed with. In the context of sports contracts, paying $100 million to Rory McIlroy or Jordan Spieth over three years makes more sense than paying a fraction of that to Lee Westwood or Henrik Stenson. The relevance is important, and so far all the players involved are still aligned with the PGA Tour.

Ensuring it stays that way means future talent pools, and the success of the LIV model so far means the PGA Tour may need to consider offering guarantees as well. As with every sport, contracts will be expanded to their niche. Most of the guarantees for players will be nominal, just enough to cover expenses, with the possibility of new deals for fast-growing talent. Stars who lead the product will be rewarded in proportion to their contribution. Members sacrifice some control over their schedules, and tours gain the ability to offer elite fields to major sponsors and broadcast partners.

I asked one of the big players if he would give up his status as a hugely popular independent contractor for a guaranteed contract. He quickly replied “yes,” saying that LIV was exploiting a weakness in the current model.

“Fans don’t know where the stars of the PGA Tour will play week after week, and sponsors don’t know what to buy, and neither do NBC/CBS. [Full disclosure: I am a contributor to Golf Channel, which is owned by NBC Sports.] If you can create a 12-14 “big” event where the stars have to sign up for most of them, say 10 of 12 or 12 of 14, plus majors and a couple more, that would sound more attractive to sponsors, TV, and fans. The era of maximum playing opportunities must go and the era of the best against the best often begins.”

PGA Tour insiders likely shrug off concerns about fans or partners not knowing who’s playing any given week because that’s never been reflected in commercial terms, such as broadcast rights, sponsorship deals or prize money, all of which have grown through recessions and tough times. But these times require fresh thinking, even if the obstacles are many and obvious.

Start with the round’s reluctance to blow up a business model that, however stressed, hasn’t failed. Nor will it be easy to sell content to highly competent players. Funding any new structure could mean forgoing tax-exempt status and soliciting private equity that required a return on its investment (a seemingly odd business necessity beside Norman’s extravagance). Finally, there is a fact that looms large in every discussion about LIV: In just about every other sport, contract-awarding tournaments control the biggest events, but not golf.

At the Open Championship, R&A CEO Martin Slumbers made it clear that the first two LIV events – Limited Fields, Limited Talent, No Cuts – did not live up to the competition worthy of a place in the Open. His view is not a minority position among those who run the major leagues. But warranties need not be anticompetitive nor dilute the product. Performance should continue to count for a lot – not least access to Specializations – no matter what contract a player has

Whether the PGA Tour feels the need to sign players will likely be determined in part by changes the majors are making to their eligibility criteria, and whether that hinders LIV’s prospects. This should not be the critical consideration. The member-led mantra that has ruled the Tour for half a century is commendable as a philosophical stance, but not appropriate to the commercial realities of the modern sports business world. Just because Greg Norman wants to destroy the PGA Tour, doesn’t mean there aren’t aspects of it that should be dismantled on merit.

existing

What could the PGA Tour do differently? LIV Golf rivals what could be

Leave a Reply

%d bloggers like this: