Stars who have made the mega-money switch to LIV Golf have been warned the Saudi-backed series will not survive 'more than a couple of years' by an economy expert.
LIV Golf burst onto the scene last year and has more than made its imprint on professional golf by rocking the status quo. Under the guidance of former world No. 1 Greg Norman, the breakaway circuit has lured in some of the sport's biggest names from the PGA Tour.
The pull is no doubt the financial incentive, with the backing of the Saudi Arabian Public Investment Fund gifting players mega-money signing on fees, as well as the chance to compete for lucrative prize pots.
Whilst the Saudi chiefs have thrown plenty of cash at the golfing project, it seems not much has come back in, with LIV's legal team recently reporting the tour had brought in 'virtually zero revenue' in its maiden season. This is not the only worrying claim though.
Economist and author Steve Levitt made a worrying prediction for the breakaway league after welcoming LIV CEO Norman onto his podcast, ' People I (Mostly) Admire '. Having his say on the Saudi-backed circuit's model, he worryingly predicted: "On the question of LIV Golf’s economic viability, well, there I’m a little more skeptical.
"I just don’t see the franchise model working, at least in its current form. In that case, I don’t think LIV will survive more than a couple years. But I’m also the one who said Amazon would never make a profit and that electric vehicles, they’d never be viable, and that Bitcoin, when its price reached 10, it was definitely a bubble.
"Even after the crash in 2022, the price of Bitcoin is 2,000 times higher today than when I confidently declared it a bubble. So my opinion is probably worth, well, nothing.” Unsurprisingly Norman had a staunch defence, comparing the franchise model LIV has implemented to the success of the NFL.
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"So we have 12 principal players. Those 12 principal players own 25 percent of that franchise. The league owns 75 percent of it. Now that principal player is responsible for his own P&L [profit and loss] over his team. No different than any NFL team, right? They’re responsible for their own P&L — profit and loss. So he has to bring in individuals to help him manage his team.
"They could come from the agents or agencies that represented them over a period of time, or they could be outside, third-party individuals, or he could go source these individuals to come in to work on that. So they’re going to bring in sponsorship to the team. I can tell you the excitement of my principal players of the league has been elevated exponentially because now they see long-term value of understanding how to build out this franchise value.”
