LIV Golf Now Closed?

[iacas]

14 minutes ago, chspeed said:

I agree. I'd be surprised if the lawyer bills were a significant part of this decision.

Are these numbers public, or is this hypothetical?

It's not public, but… it's been talked about in various circles.

This kind of litigation is not inexpensive.

14 minutes ago, chspeed said:

Still, tens of millions is nothing for a business that has $200-$300M in reserves and is fighting to protect their entity.

No, that's not accurate. It's a ton, and they likely do NOT have even half of $300M in reserves. Sponsors aren't ponying up for the elevated events, so they're adding to those purses, too.

The PGA Tour isn't operating smoothly and with high profits (ignoring the non-profit accounting part).

[Vinsk]

Meanwhile…Channel CW:

[DeadMan]

1 hour ago, iacas said:

This kind of litigation is not inexpensive.

In addition to this, the PGA Tour’s best strategy was to drag it out and make it as embarrassing as possible for LIV and the PIF. Their lawyers were doing a good job of that, but the legal bills on this thing could have run into 9 figures if it got all the way to a final judgment. With a significant potential for the Tour to lose at the end of it all. A lot of antitrust experts thought LIV would get a preliminary injunction when the case started. My reading of the complaint was that LIV itself had a strong case. 

For PIF, they had some adverse rulings and were likely about to be subject to discovery. Ending the case is good for them, too  

Bottom line, the whole legal fees and strategy were a big part of this announcement.  

[Brock]

On 6/7/2023 at 10:11 AM, iacas said:

And I'm saying that they don't just get to do that whenever they want. They can be asked to increase their investment, and get the first right of refusal should the new entity want/need/seek more capital.

Furthermore, that doesn't necessarily increase their ownership stake.

People shouldn’t be naive to think PIF won’t be the one(s) calling the shots. There will be a board to make it look diverse but reality is PIF will continue to steamroll whatever is in front of them. Any capital needed is rounding error to PIF. 

 

[Dr. Manhattan]

3 hours ago, Brock said:

People shouldn’t be naive to think PIF won’t be the one(s) calling the shots. There will be a board to make it look diverse but reality is PIF will continue to steamroll whatever is in front of them. Any capital needed is rounding error to PIF. 

 

 

This is true, but Saudi also has had some financial issues recently. At any moment, they could pull the funding in golf. They've said they expect a return on investment. Golf has a pretty small audience compared to other sports. If we get a few years down the road and Saudi is not happy with the investment return, I would not expect them to continue pumping money into it. This article does a pretty good job describing some of the issues they've had recently: 

The Rest Of the Story: The Overlooked Saudi Sand Trap Behind the Golf Treaty

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The hidden risk to the PGA-LIV combination? Saudi money is not as limitless as it may seem.

 

[DeadMan]

15 hours ago, DeadMan said:

A lot of antitrust experts thought LIV would get a preliminary injunction when the case started

This should say the players instead of LIV. I forgot LIV wasn’t involved until after the preliminary injunction was denied. 

[turtleback]

11 hours ago, Dr. Manhattan said:

 

This is true, but Saudi also has had some financial issues recently. At any moment, they could pull the funding in golf. They've said they expect a return on investment. Golf has a pretty small audience compared to other sports. If we get a few years down the road and Saudi is not happy with the investment return, I would not expect them to continue pumping money into it. This article does a pretty good job describing some of the issues they've had recently: 

The Rest Of the Story: The Overlooked Saudi Sand Trap Behind the Golf Treaty

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The hidden risk to the PGA-LIV combination? Saudi money is not as limitless as it may seem.

 

Small audience, but high profile.

 

And I do not believe any part of this or other sports washing, such as the purchase of soccer teams, has anything to do with investment return.

Edited June 10, 2023 by turtleback

[iacas]

How the PGA Tour-LIV Golf Merger Came Together - The New York Times

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The agreement to remake a global game stunned most of the sporting world after seven weeks of clandestine negotiations.

If you delete your cookies you get one free NYT article per month. 😉

[May Jonahan]

On 6/9/2023 at 10:08 PM, Brock said:

People shouldn’t be naive to think PIF won’t be the one(s) calling the shots. There will be a board to make it look diverse but reality is PIF will continue to steamroll whatever is in front of them. Any capital needed is rounding error to PIF. 

 

PIF is 100% calling a lot of the shots. They just figured it's easier to give Jay the reigns as opposed to having Norman fight everyone

[Vinsk]

1 hour ago, May Jonahan said:

PIF is 100% calling a lot of the shots. They just figured it's easier to give Jay the reigns as opposed to having Norman fight everyone

I’m an idiot regarding the legalities and details of this merger. But what shots will the PIF really call? They had a disgruntled, narcissistic CEO who couldn’t get the ratings of a Good Times rerun. They have people on the PGAT side who have been running golf for years. I don’t see the PIF heads setting rules for tournaments/players at all. Does this make sense?

[phillyk]

36 minutes ago, Vinsk said:

I’m an idiot regarding the legalities and details of this merger. But what shots will the PIF really call? They had a disgruntled, narcissistic CEO who couldn’t get the ratings of a Good Times rerun. They have people on the PGAT side who have been running golf for years. I don’t see the PIF heads setting rules for tournaments/players at all. Does this make sense?

I’m wondering of all that too. I think Jay will do his normal thing and day to day operations. Any “bigger” decisions would need PIF approval. He’s there because he has been doing it a long time and Greg wasn’t cutting it. But PIF is now the real boss of it all. 

It really seems like PGAT did not have enough money to keep doing what they were. They made elevated events with bigger purses without truly having the money to do that. Add in legal fees only made them dig into reserves faster than they would have. They needed money and PIF was clearly there to say they were interested. 

[May Jonahan]

1 hour ago, Vinsk said:

I’m an idiot regarding the legalities and details of this merger. But what shots will the PIF really call? They had a disgruntled, narcissistic CEO who couldn’t get the ratings of a Good Times rerun. They have people on the PGAT side who have been running golf for years. I don’t see the PIF heads setting rules for tournaments/players at all. Does this make sense?

I phrased it wrong, but Jay I think reports directly to Yasir who has the ultimate discretion 

Edited June 11, 2023 by May Jonahan

[iacas]

1 hour ago, May Jonahan said:

I phrased it wrong, but Jay I think reports directly to Yasir who has the ultimate discretion 

The chairman isn't the CEO's boss. The PGA Tour will (supposedly) have control of the board, and it'd take the board (not just the chairman) to vote Jay out.

I'm not a corporate governance person, but I think that's generally true. The chairman has power, but not ultimate power.

[May Jonahan]

17 minutes ago, iacas said:

The chairman isn't the CEO's boss. The PGA Tour will (supposedly) have control of the board, and it'd take the board (not just the chairman) to vote Jay out.

I'm not a corporate governance person, but I think that's generally true. The chairman has power, but not ultimate power.

It's confusing. I could see why the players are so frustrated because outside Jay, Yasir, and Jimmy Dunne no one really knows the details of this deal

[iacas]

6 minutes ago, May Jonahan said:

It's confusing. I could see why the players are so frustrated because outside Jay, Yasir, and Jimmy Dunne no one really knows the details of this deal

And Ed Herlihy.

[Dr. Manhattan]

Tiger has been extremely quiet about this news. His Twitter account seems to be focused on his Putt-Putt business and the new indoor simulator league. 

[DeadMan]

22 hours ago, Vinsk said:

I’m an idiot regarding the legalities and details of this merger. But what shots will the PIF really call? They had a disgruntled, narcissistic CEO who couldn’t get the ratings of a Good Times rerun. They have people on the PGAT side who have been running golf for years. I don’t see the PIF heads setting rules for tournaments/players at all. Does this make sense?

PIF won't be involved in day-to-day operations or running tournaments. But I'm sure they'll be involved in larger strategic decisions. For example, I'm guessing they'll want an event or two in Saudi Arabia. Maybe they will want a feeder tour based in Saudi Arabia. I bet deciding what happens to players who left for LIV is another thing. 

[saevel25]

9 minutes ago, DeadMan said:

I bet deciding what happens to players who left for LIV is another thing. 

It think it is a high probability that the LIV players get left out to dry. They could have just been pawns by the Saudi's to get to this point. It could be, they will be left up to the PGA Tour to decide the outcome.