LIV Golf (Saudi PIF), "Mergers," and More

[Killa]

4 minutes ago, eich41 said:

Do you think it's a coincidence that this has been the main criticism put forth by the PGA Tour and the media and everyone is here has gobbled it up?  Prior to Spring/Summer of 2022, were all of you adamant opponents of Saudi Arabia and their human rights issues?  We're literally all here posting about this right now because the entire argument was proven today to be complete farce as the PGA Tour does a 180 in less than a year. You've all been caught up in an argument produced to protect the moat around the PGA Tour and still don't even realize it.

Exactly. I mean the USA does like a gazillion billion dollars of trade with SA, especially weapons and nobody bats an eye. But everyone is "disgusted" by the money when they pay for golf 🤣

 

[boogielicious]

3 minutes ago, Killa said:

Exactly. I mean the USA does like a gazillion billion dollars of trade with SA, especially weapons and nobody bats an eye. But everyone is "disgusted" by the money when they pay for golf 🤣

 

Of course we don’t like that. If I had my way I would tell SA to pound sand up their patooty. I can only control what the US Government does with my vote. I can only not watch the PGA Tour to voice my disagreement. I wish tomorrow Fusion power existed and the Saudis could then swim in their oil. So don’t act so sanctimonious and think we accept one thing and not another. Some things we have power over and some we do not. GEEEZ.

[eich41]

6 minutes ago, Killa said:

Exactly. I mean the USA does like a gazillion billion dollars of trade with SA, especially weapons and nobody bats an eye. But everyone is "disgusted" by the money when they pay for golf 🤣

 

Literally GC right now "I just don't know why Monahan has done a 180 seemingly overnight?"

 

Hello, because it was NEVER his stance, it was just the only angle he had to attack a rival golf league so he took the stance and mandated the media minions to push it.  It's easy to do a complete 180 when you were really already facing the other direction....

[iacas]

2 hours ago, Pretzel said:

while the PIF collects the profits as the largest financial stakeholder.

I do not think that’s accurate. They’re a sponsor more than an owner, and the PGA tour product and organization itself is valued at quite a high number itself. The PGA tour is essentially investing their sweat equity while the salaries are just putting in money equity.

[ChetlovesMer]

1 hour ago, eich41 said:

You can't have selective virtue.  You can't condemn SA and anyone who associates with SA, then turn a blind eye to the PGA Tour pushing partnerships with China, who certainly has plenty of their own human rights issues.  

I can and do.

I have friends who were murdered in the 9-11 terrorist attacks. 

I believe I'm aloud to condemn you if you murder my friends.

I can draw the line any old place I want. I choose to draw it at murdering my friends. 

[iacas]

2 hours ago, eich41 said:

 DJ wins the US Open and that's a pretty bad look for the PGA Tour who was adamant that it had the vastly superior talent. 

First, that’s a big if. Second, live has four or five really good players and the rest are trash.

Third, one of those good players who just won the PGA thought his career might almost be over, so it’s not weird that other people thought similarly.

1 hour ago, eich41 said:

Meh, you're hoping that we continue to have two watered down versions of professional golf, with only 4 true tournaments a year?  There is no denying that the PGA Tour in 2021 was far more compelling than LIV or PGA Tour in 2022 and beyond. 

I think the PGA Tour in 2023 has been one of the most compelling seasons yet. Hard disagree with you here buddy.

1 hour ago, eich41 said:

I'm fine if that's your stance.  Here is the problem with that.... You can't have selective virtue.

…

So if you're going to go down that road, go all the way down that road.

Uhhhhh, no.

They are not the same thing, and you don’t have to go all the way down that road.

You’re entirely wrong here.

42 minutes ago, eich41 said:

Where do you draw the line?

You don’t get to tell people where they draw their line. The simple fact is that those two things are not equivalent and so there is plenty of space between them to draw a line.

30 minutes ago, eich41 said:

Prior to Spring/Summer of 2022, were all of you adamant opponents of Saudi Arabia and their human rights issues?

I’m not going to speak for everyone else here, but for me, yes.

[Pretzel]

42 minutes ago, iacas said:

I do not think that’s accurate. They’re a sponsor more than an owner, and the PGA tour product and organization itself is valued at quite a high number itself. The PGA tour is essentially investing their sweat equity while the salaries are just putting in money equity.

The PIF can increase their investment stake. Outside organizations and even the PGA/Euro Tours cannot do the same without approval from the PIF due to the first right of refusal. They’re a sponsor, yes, but one that explicitly reserves all rights to expand their financial stake and block other investors in the arrangement as it’s been laid out so far to the public.

 

The PGA and Euro Tours are getting their initial financial stake in the merger by contributing their tours essentially, as you mentioned, because the PIF is the only one putting forth cash upfront in the deal the way it’s been described thus far. The issue for those tours is that the announcement specifically states the PIF reserves rights to both increase their financial stake in the created company AND prevent dilution of their financial stake through the first right of refusal. They’re the only ones with those powers, not the PGA or Euro Tour who could at a minimum have their stake heavily diluted or at worst also be barred from increasing their initial investment later on by the PIF itself. 
 

The parent company will get the revenue from all 3 tours, and the board will distribute it as deemed best for the company between the accounts payable, future year budgets, and profit for financial stakeholders. The only money that the PGA/Euro Tours would have available to expand their financial stake is their portions of the profits that get reinvested into the company and even then the PIF’s portion of reinvested profits offsets that. The PIF, on the other hand, has $600+ billion dollars of additional investments they can draw from to dilute the initial investment of the two Tours.
 

To clarify, I’m not talking about immediate effects of the merger. They could very well start out with equal financial stakes in the merged company, with the PIF essentially paying in cash what the PGA/Euro Tour have valued themselves at to enter as an equal partner (not likely since PGA and Euro Tours themselves are not equally valuable, but I digress). I’m talking about the effects down the road when the PIF exercises their exclusive rights to expand their initial investment or block additional investors from joining as the financial stake each partner has begins to change.  I’d very much like to be wrong about this, but it’s very weird to specifically call out in the announcement that the PIF has exclusive rights to increase their investment AND a first right to refusal for other investors. That’s borderline hostile-takeover merger terms right there.

Edited June 6, 2023 by Pretzel

[snapfade]

Lets all come to the agreement that neither SA nor China will win any humanitarian awards. We still have not addressed the topic of how this will affect beer prices next year, or why Chamblee's twitter remains silent. Heck, this was a Fox News Breaking Alert a little while ago, even the Donald chimed it. Golf is in the news, that got to be good for someone. TopGolf and Acushnet stocks jumped up a bit after the news. 

[Pretzel]

7 minutes ago, snapfade said:

We still have not addressed the topic of how this will affect beer prices next year

 

Saudi Arabia does, however, allow rose water in lieu of champagne at least (if you’re able to stomach the taste of it).

Edited June 6, 2023 by Pretzel

[Elmer]

35 minutes ago, iacas said:

Second, live has four or five really good players and the rest are trash.

iacas knows way more about this than I do.
But I just want to point out that 2 things:

1- the LIV business model was to over pay trash player. No wonder their TV matches were unwatchable and business model unsustainable

2-Imagine being trash and getting paid all that much $? That has to inflate their ego a bit. Even if these players return to the PGA, they are going to slide out of the top 50 an on to the local put-put tour.

[Moxley]

What a day! the PGA finally sees sense and lays down their arms, and at last we can look forward to seeing all the best players play together again. 

Credit to Greg, Phil etc for resolve in and willingness to fight for something better in the face of such opposition.

[ChetlovesMer]

2 minutes ago, Moxley said:

Credit to Greg, Phil etc for resolve in and willingness to fight for something better in the face of such opposition.

Okay, before you go blowing smoke up Phil and Greg's collective asses. 
Remember that Phil has, by his own admission, gambled away roughly $900,000,000.00 USD. (I know I went to Ch!cago PubIic Sch00ls but that's not a type-o.) Phil has stated that he has gambled away roughly 900 million. 

Also, remember that Greg has been pissed at the PGA for decades.... mostly because he's a douchebag. 

Neither gentleman did anything noble here. They just took big fat pay-checks. One because he needs the money, the other because he's a douchebag. 

[iacas]

1 minute ago, ChetlovesMer said:

been pissed at the PGA for

PGA TOUR.

FFS.

[ChetlovesMer]

1 minute ago, iacas said:

PGA TOUR.

FFS.

I humbly stand corrected. 
I actually know the difference. 
My bad. 

[Moxley]

8 minutes ago, ChetlovesMer said:

Okay, before you go blowing smoke up Phil and Greg's collective asses. 
Remember that Phil has, by his own admission, gambled away roughly $900,000,000.00 USD. (I know I went to Ch!cago PubIic Sch00ls but that's not a type-o.) Phil has stated that he has gambled away roughly 900 million. 

Also, remember that Greg has been pissed at the PGA for decades.... mostly because he's a douchebag. 

Neither gentleman did anything noble here. They just took big fat pay-checks. One because he needs the money, the other because he's a douchebag. 

 

Nobody is perfect, and I take your point. However, they are not without merit either, and their work will improve golf for a long time to come.

[iacas]

9 minutes ago, ChetlovesMer said:

I humbly stand corrected. 
I actually know the difference. 
My bad. 

It’s not just you.

I’m more sensitive to it as a PGA member.

[JetFan1983]

 

[GolfSwami]

On 6/14/2022 at 9:00 PM, GolfSwami said:

The PGA Tour is a monopoly that exists in part because of special tax privileges. Monopoly and tax status are both likely to get challenged in all of this.  Competition is what protects workers. Most  are focusing  on the big names but the lower and mid tier players are likely going to see a big benefit.  Golf is very hard to crack into. It is expensive and difficult to get through Q school and most guys don't keep their card once on tour.   This might push the PGA Tour toward more guaranteed money which will give more marginal players a financial cushion. The 125th guy on the money list made right a  million last year, which after taxes, caddie and travel is okay but certainly not great for how tenuous that position is. That person could be on lesser tours pretty quickly. And the 200th player made $156,000 which is pretty subsistence even with sponsors and pro-am money. 

As far as the Saudis, I see this as a moral good.  Trade makes it so people who otherwise might hate each other find ways to coexist because it is in their mutual self interest. Countries that are economically interdependent tend not to attack each other. Saudi Arabia is closed off to much of the world. A benefit with sports and entertainment is there might be some (small) influence on the culture. 

From last last June. The single most astute observation in the history of this site.

 

Edited June 6, 2023 by GolfSwami