The Saudi PIF has decided to cut off funding to LIV Golf after five years and over $5bn of investment – the big question now is can LIV still survive?
Just how much funding is needed will be a key question as it’s clear the losses the PIF was burning through can’t be tolerated in a regular business model.
Yes, LIV has seen increases in turnover and sponsorship deals of late, but costs have to be slashed dramatically – and that will need to come from prize money, signing bonuses, concerts and other big build-outs.
LIV is sure the future lies with the team franchise model and investors ploughing money into them – but as an example, how much are the Crushers worth without Bryson DeChambeau?
So while ‘will’ LIV survive is a slightly different question to ‘can’ it survive, the answer to both of those is the same – it totally depends on the players.
LIV needs to slash costs to survive
(Image credit: Getty Images)
Whoever comes in to back LIV Golf, the costs just can’t keep on at current levels. Any start-up needs cash, and with this one trying to change the face of global golf it was going to take a lot.
And let’s face it, the PIF has the deepest pockets on the planet, so why not splash the cash and hand out juicy singing bonuses for Phil Mickelson, Dustin Johnson, Bryson DeChambeau and most recently Jon Rahm?
That’s not to mention all the other signing fees that may not stretch into nine figures but will all add up.
And crucially here, just what’s left on those contracts that still needs to be paid up in the coming years? That’s an expense new investors could do without.
There’s also running costs at some of these tournaments, with big names headlining post-round concerts and big stadium hole build outs, could costs be cut here?
But the crucial one is the prize money – splashing out $30m for every tournament ($20m for individuals and $10m for the team event) didn’t seem that sustainable even with Saudi investment.
Without it, it looks near impossible. It’s…
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