LIV Golf, which shook the global golf world on the back of the financial clout of Saudi Arabia's sovereign wealth funds (PIF), is at a crossroads over its survival. With massive subsidies cut off, the sizes of regular events have been reduced one after another, and it has even become embroiled in legal disputes over overdue payments. Even the championship that was scheduled to be held on the 28th was canceled 10 days before its opening.
On the 23rd (local time), the Wall Street Journal (WSJ) and the Financial Times (FT) said the individual event held since the 21st in Chatham Hills, Indiana, would stand in for the LIV Golf season finale this year. LIV Golf had originally planned to hold the team championship in Michigan on the 28th to decide this year's team winner. But a week before the start, it quietly scrapped the team championship finale that was supposed to be staged in grand fashion.
LIV Golf had lured star players with signing bonuses worth hundreds of billions of won and massive prize money. But the situation changed abruptly when Saudi sovereign wealth funds halted funding in April this year. The funds are said to have paid only $200 million, about one-third of the $600 million needed for LIV Golf's operations in the second half of this year. With its funding pipeline dried up, LIV Golf's management set out to find new external investors to survive, but the outlook remains uncertain.
LIV Golf CEO Scott O'Neil, after being told funding would be cut in April, told employees, "The season will proceed at full speed without a hitch." Reality diverged from O'Neil's pledge. The tournament slated for late June in New Orleans, Louisiana, was postponed under the pretext of avoiding heat and ultimately canceled.
The total purse for the Indiana individual event held this weekend was also halved to $10.1 million from $20 million at the previous event. The team event purse was cut 25% to $30 million from the initially allotted $40 million. To make matters worse, the prize money for the event earlier this month at Trump National Golf Club Bedminster was reportedly paid late this week, past the payment deadline.
There are clear deadlines and established practices for paying prize money in professional golf. Major bodies such as the PGA Tour in the United States typically deposit prize money, net of taxes, to winners the very next week after a tournament ends. Contracts that professional players sign with tours clearly set prize payment deadlines (usually within 7–14 days after the tournament). From its launch, LIV Golf flaunted the massive capital of Saudi Arabia's sovereign wealth funds and won over players by wiring large sums much faster than other tours. Experts said the fact that LIV Golf, which had wielded its financial power as its biggest weapon, violated prize payment practices and contractual deadlines is evidence that it is suffering a severe liquidity crisis.
As the financial squeeze intensified, conflicts with partners also surfaced. The WSJ reported on the 23rd that Fresh Tape Media, a small creative agency that produced and delivered content such as videos and podcasts for LIV Golf, recently filed a lawsuit saying it had not been paid $1.2 million (about 1.7 billion won).
LIV Golf has even begun tightening its belt by canceling celebratory concerts that had been prepared to heat up venues. LIV Golf said, "We recognize the disappointment that concert cancellations may cause for fans, local stakeholders, singers and DJs," but did not specify the reason for the cancellations.
For LIV Golf to hold events next year and keep the lights on, new funding is essential. CEO O'Neil is scrambling to raise about $300 million in external investment. But with even Saudi sovereign wealth funds pulling back, it is proving difficult to find investors willing to stake big money.
Even if it manages to secure investment, a bigger hurdle awaits. LIV Golf is considering a new management approach of granting a majority of league equity to its players to sustain operations. That is far from the astronomical piles of cash that players were guaranteed when they first left the PGA Tour for LIV Golf.
Local experts see a very low likelihood that top-tier stars like Jon Rahm or Brooks Koepka, who are set to receive large sums over the next few years, would accept equity in loss-making ventures in lieu of cash. For players who switched in pursuit of financial gain, proposing slice-and-dice equity instead of guaranteed cash is seen as an unappealing alternative. Jon Rahm, the star golfer who represents LIV Golf, said in a past interview with a U.S. sports outlet ahead of his move to LIV Golf, "Getting $400 million doesn't change my life," adding that he loves golf's history and legacy, not money. He later switched after LIV Golf offered an astronomical signing bonus.
O'Neil told the WSJ, "Without players, LIV Golf becomes very difficult," adding, "We are focusing everything on getting this transaction done and getting through this."
The downfall of LIV Golf is expected to have significant ripple effects on the global golf landscape. Former U.S. President Donald Trump had actively backed LIV Golf. In 2022, Trump wrote on Truth Social, "Players who remain loyal to the end to the PGA will pay a very big price when LIV Golf and the PGA merge," adding, "If you don't take the money now, after the merger you will get nothing while envying how wise the players who left earlier were."
Trump pressed ahead with hosting LIV Golf tournaments at his own courses even as families of 9/11 victims lambasted LIV Golf for taking Saudi money and staged protests. But LIV Golf now finds itself in the humiliating position of failing to properly pay prize money even for tournaments held at Trump-owned courses that had served as a staunch backstop.
James Katchadurian, senior managing director at U.S. restructuring specialist CR3 Partners, drew a comparison to ordinary corporations in an interview with Golf Digest, saying, "If this were a normal company, you would be asking, 'Is there a reason for this company to exist?'" and adding, "It's unclear exactly what LIV Golf's business model is and whether it can make money with this model going forward."