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- Phil Mickelson, Dustin Johnson and Cam Smith reportedly earn more than US$500m combined in guaranteed deals
- Team format pitched as key to profitability by LIV Golf, with plan to sell teams as franchises
The first season of the Saudi Arabia-backed LIV Golf breakaway tour cost around US$784 million in total, according to Sports Illustrated (SI).
The likes of Phil Mickelson, Dustin Johnson and Cameron Smith are said to be earning a combined total of over US$500 million in guaranteed contracts. In addition to the US$225 million prize pot, all expenses have been paid, including the players’ caddies, further inflating expenditure during LIV Golf’s debut campaign.
The controversial LIV Golf series is financially backed by the Saudi state Public Investment Fund (PIF), which has more than US$600 billion in assets under management. PIF governor Yasir Al-Rumayyan, who is very involved with the tour, reports directly to Mohammed Bin Salman, the crown prince of Saudi Arabia.
Currently consisting of eight events, the increase to staging 14 tournaments next year will come at a greater cost, while LIV Golf also continues to dangle big-money offers in front of big name players to join the rebel series.
According to SI, the cost of running next year’s series will top US$1 billion. With revenue limited due to a lack of major broadcast deals or other significant commercial partnerships, the PIF will foot the whole bill. This could even include buying airtime show events in the US, with LIV Golf reportedly talking to Fox about such a deal.
LIV Golf has pointed to the use of a team format as its way to profitability, with the plan being to sell off the teams as franchises. Some of the current 12 team captains gained equity stakes in their teams, with the players to share in revenue and profits.
The size of the franchise fees has not been disclosed by LIV Golf nor what commercial opportunities will be made available to buyers. Currently, teams earn a small amount of the prize purse on offer, with just US$5 million of the US$25 million pots going to the teams. The winning team makes just US$3 million, splitting the money amongst their players.
Golfer Kevin Na, the captain of the Iron Heads, described the format as “successful” and is excited about the prospect of recruiting commercial partners. Speaking to SI, he said: “I think it’s created a lot of buzz around the golf world.
“Even the players as well; we feel very excited about who’s going to be on our team, who’s going to be our sponsor. We’re constantly talking about who to recruit.”
