The $3bn reasons for a shock peace in golf
Saudi Arabia’s Public Investment Fund has made frequent appearances in DD for its role in some of the wildest moments in business and finance over the past few years. Who can forget Elon Musk’s “funding secured” tweet in 2018 or the spectacular misfired bets on SoftBank’s Vision Fund?
While Masayoshi Son’s portfolio didn’t pan out, Saudi Arabia has made serious progress in commandeering the world’s most popular sports.
The latest example came on Tuesday when PIF-backed LIV Golf and the PGA Tour said they would merge and become partners, ending a yearlong battle between the two golf leagues that was mired in litigation and mudslinging.
Saudi-backed LIV emerged on the golf scene last year spending hundreds of millions of dollars to lure top golfers such as Brooks Koepka, Phil Mickelson and Dustin Johnson to join its breakaway league. It has threatened the PGA’s dominance of golf and put top industry figures on the defensive.
But PGA commissioner Jay Monahan and Yasir al-Rumayyan, head of Saudi Arabia’s sovereign wealth fund, recently began to privately hash out a resolution between their organisations over rounds of golf and meals in Venice, they told DD.
Crucial to the truce is an increasingly common asset wielded by Saudi Arabia in the sports world: cash.
PIF is set to pump billions of dollars into the combined PGA and LIV, which has yet to be given a new name.
The infusion, which some people involved said could amount to about $3bn, underscores how Saudi Arabia has muscled into global sports using oil-funded state finances.
Another breakthrough for Saudi Arabia came last month when Newcastle United, the English Premier League football team it acquired in 2021, qualified for the lucrative Champions League competition.
Its ambition in sports does not stop there. The Saudi government earlier this week transferred majority holdings in four Saudi football teams to the PIF, a manoeuvre many speculate is aimed at creating a powerhouse domestic league with the resources to lure top footballers like Karim Benzema and Lionel Messi.
Some top Wall Street figures helped to broker the once unthinkable truce in golf.
Investment banker Michael Klein and British business figure Amanda Staveley represented Saudi Arabia, while Jimmy Dunne, a founder and managing partner of Sandler O’Neill + Partners, and Ed Herlihy, co-chair of Wachtell, Lipton, Rosen & Katz, advised the PGA.
“As we were competing over the last couple of years . . . I think it’s fair to say that we couldn’t have imagined we’d have gotten to this point,” Monahan told the Financial Times.
But the fact that Saudi Arabia has prevailed underscores the merit of its bet that money will ultimately win in the world of sports.