Report: Signing Tiger Woods only part of LIV’s ‘fantastical’ plan to seize ‘mantle of dominance’
“A high-risk high-reward endeavor.”
That’s how a consulting firm hired for analysis by Saudi Arabia’s Public Investment Fund described what is now the kingdom’s golf venture, LIV Golf, in early 2021, according to confidential documents obtained, reviewed and reported by the New York Times.
Per the Times report, the firm, McKinsey & Company, last year laid out potential scenarios for the LIV Golf concept in a plan called, “Project Wedge,” with the greatest possible outcome – Saudi Arabia becoming “the world leader in the hidebound realm of men’s professional golf” – requiring the league to achieve several lofty benchmarks that the Times says “bordered on the fantastical.”
Those targets, the report adds, included signing Tiger Woods and Rory McIlroy among a list of 12 “top” players, landing sponsors and a TV deal for an “unproven product” in a sport with “declining viewership,” and do so “without significant retaliation from the PGA Tour it would be plundering.”
If LIV achieved all the above, the firm projected $1.4 billion in yearly revenue and pre-tax earnings of $320 million, or more, by 2028. This, the firm states, would be considered “seizing the mantle of dominance,” the best-case scenario.
But if LIV instead became stuck “languishing as a startup,” the worst-case result, it could lose $355 million before interest and taxes. The report said the firm defined this outcome as “attracting less than half of the world’s top 12 players, navigating a ‘lack of excitement from fans,’ reeling from limited sponsorships and confronting ‘severe response from golf society.’”
Representatives for the PIF and McKinsey did not provide comment for the Times’ story.
As the Times notes, LIV currently “tilts sharply” toward the latter scenario. Having just completed its inaugural eight-event season – and reportedly needing over $750 million to do so – the league has yet to secure a major sponsor or TV rights deal, all while it is embroiled in litigation with the PGA Tour; both tours have filed lawsuits against the other.
And of those 12 coveted superstars, the Times says LIV has only signed four of them – Phil Mickelson, Dustin Johnson, Sergio Garcia and Henrik Stenson, all of whom have since either been suspended by the PGA Tour or forfeited their longstanding memberships. (Golf’s major championships, though, have so far maintained their traditional exemption criteria.)
Woods, per LIV CEO and commissioner Greg Norman, was offered between $700 and $800 million to sign with the league. But the 15-time major champ turned down the deal and has since been outspoken against LIV while backing the PGA Tour.
“We can’t compete dollar for dollar with [the PIF], just we physically can’t do that,” Woods said earlier this month prior to the Hero World Challenge. “But what we can do is talk about better opportunities for younger players getting onto the tour, what it means to play the tour, how important it is, how important it is to have a legacy, [to] be able to win major championships. … [LIV has] spent probably close to $2 billion this year. Who’s to say they can’t spend $4 or $5 billion next year? We just don’t know. It’s an endless pit of money. But that doesn’t necessarily create legacies either. You want to compare yourself to [Ben] Hogan, you want to compare yourself to [Sam] Snead, you want to compare yourself to [Jack] Nicklaus. You can’t do that over there, but you can on this tour.”
Woods wasn’t the only big name on LIV’s wish list, which, according to other documents in the hundreds of pages obtained by the Times, included non-golfers. Though not part of the McKinsey analysis, one document revealed LIV was looking to put together a board filled with titans of industry, from NBA legend Michael Jordan to former Secretary of State Condoleezza Rice, though neither responded to a Times’ request for comment.
LIV is planning on 14 tournaments and $405 million in total prize money for its 2023 season while Norman continues to forecast future signings and ultimately a TV deal for his tour.