“I’m a little more skeptical” - LIV golf warned of their exhaustive business model
The controversial LIV Golf series has been making waves in the golf world ever since its inception. Several big names have defected from the PGA Tour to join the Saudi-backed league.
The series splurged money on its players, who were offered exorbitant signing amounts. The cash prizes were the biggest ever seen in the history of the sport. It introduced an experimental format with shortgun starts and the golfers were allowed to wear shorts in tournaments.
In no time, LIV Golf presented itself as a bitter rival to the PGA Tour.
The golfers who signed on to the breakaway series cited a less hectic schedule as one of the key points of influence. However, it cannot be denied that the money is also a flattering aspect.
However, some concerning news is afloat regarding the future of the series. It is no secret that the tour doesn't have a proper sponsor as of yet and the event is funded by the Public Investment Fund of Saudi Arabia.
While the Saudi government has poured money into the golf project, it appears that not much has come back. The league's legal team recently reported that the tour generated "virtually zero revenue" in its first season.
However, this is not the only troubling claim.
After welcoming LIV Golf CEO and Commissioner Greg Norman onto his podcast, "People I (Mostly) Admire," economist and author Steve Levitt made a concerning prediction for the breakaway league.
Speaking on the Saudi-backed circuit's design, he made the following concerning prediction:
"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."
However, Levitt did admit that he had been wrong about Amazon, electric vehicles and Bitcoin. So, his prediction isn't exactly written in stone.
"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.
"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."
Of course Greg Norman had his own defense to make.
"No different than any NFL team, right?" - Greg Norman compares LIV Golf franchise model to NFL
It was a no-brainer that Greg Norman would defend LIV Golf. And so he did. He compared the franchise model of the controversial series with the success of the NFL.
He said:
"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."
He further added.
"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."
Norman also believes that his principal players could see the long-term value of understanding "how to build out this franchise value":
"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."
It will be interesting to see who out of Steve Levitt and Greg Norman is eventually proven right in the future.