The deal to merge the PGA Tour and LIV Golf, the rival league financed by billions of dollars from Saudi Arabia’s sovereign wealth fund, was seen as a victory for Saudi Arabia on multiple levels.
The merger marked the greatest success to date of Saudi Arabia’s ambition to become a player in global sports. From the outset, its billion-dollar play for control of golf seemed like nothing less than an attempt to seize control of an entire sport.
Now, by merging with the PGA Tour, the oil-rich kingdom has gained a foothold that guarantees it outsize influence in the game’s future. Yasir Al-Rumayyan, the governor of the Saudi state entity bankrolling LIV, the Public Investment Fund, will become chairman of the new golf organization. The sovereign wealth fund will have right of first refusal on new investments in the merged tour, according to the statement announcing the merger.
The rival tours had clashed for months in litigation that will now draw to a close, so the deal will protect Mr. Al-Rumayyan, a golf aficionado, from the prospect of being deposed and scrutinized in American courtrooms. He also serves as chairman of Aramco, the Saudi state oil company, which has been a major sponsor of Formula 1 racing.
The deal could also lend legitimacy to the kingdom’s entry as a major player in global sports in the form of a serious partner and not just a well-funded disrupter.
Critics have accused Saudi Arabia of using its spending power in sports to distract from its poor human rights record, but Saudi officials have repeatedly rejected these allegations.
At the same time, this deal could serve as a blueprint for future moves as the kingdom grows its ambitions to further expand its influence and reach in sports and entertainment.
By establishing a start-up golf tour that rose rapidly to become enough of a threat for the PGA Tour and bring them to the negotiation table, Saudi Arabia could see potential to do the same in other arenas. Under the terms of the deal, the Public Investment Fund holds veto power on bringing any new investors, giving themselves insurance from any possible dilution of their power in the new arrangement.
The sovereign wealth fund has already managed to achieve a quick return for their investment in Newcastle United as the English soccer club qualified for the UEFA Champions League merely 18 months after it was purchased.
The announcement of the merger with the PGA Tour comes less than one year since LIV’s first event in June 2022.
In addition to soccer and golf, Saudi Arabia is eyeing investments in cricket, tennis and e-sports via Savvy Games Group, which is backed by the sovereign wealth fund. The group plans to invest $37.8 billion to make Saudi Arabia a global hub for gaming.
The kingdom has also served as host to major sports events including Formula 1 races, major boxing matches and WWE as part of plans to diversify its economy away from heavy reliance on oil.
