LIV Golf is a new golf league that launched in 2022 and has quickly become controversial. The upstart league has lured top players like Phil Mickelson, Dustin Johnson, and Brooks Koepka away from the PGA Tour with massive signing bonuses and guaranteed money. But where is LIV Golf’s funding coming from? Many have speculated that the league is simply a sportswashing project by Saudi Arabia’s Public Investment Fund.
What is LIV Golf?
LIV Golf is a professional golf league founded in 2022. The league is funded by LIV Golf Investments, a company backed by Saudi Arabia’s sovereign wealth fund known as the Public Investment Fund (PIF).
LIV Golf aims to challenge the status quo in professional golf and provide an alternative to the traditional PGA Tour. The league has a different format than typical golf tournaments, with a team component, shorter events, and shotgun starts.
LIV has lured big-name golfers like Phil Mickelson, Dustin Johnson, Brooks Koepka, and Sergio Garcia with massive signing bonuses and contracts worth tens or hundreds of millions of dollars. For example, Dustin Johnson reportedly received $125 million just to sign with LIV Golf.
Who Funds and Owns LIV Golf?
LIV Golf Investments is the entity that funds and operates the LIV Golf league. LIV Golf Investments was incorporated in the UK and is controlled and majority owned by Saudi Arabia’s sovereign wealth fund, known as the Public Investment Fund or PIF.
The Public Investment Fund is one of the largest sovereign wealth funds in the world, with assets estimated at over $600 billion. It invests funds on behalf of the Kingdom of Saudi Arabia to support its economic diversification goals.
Yasir O. Al-Rumayyan, governor of PIF, serves as the chairperson of LIV Golf Investments. Other directors include several top PIF executives and Saudi business leaders. This direct connection to Saudi leadership and financing indicates that LIV Golf is not an independent commercial enterprise, but an extension of Saudi economic policy.
Key Facts about LIV Golf’s Ownership:
- LIV Golf Investments is incorporated in the UK but controlled and majority owned by PIF
- PIF is the sovereign wealth fund of Saudi Arabia, with over $600 billion in assets
- Yasir Al-Rumayyan, head of PIF, is the chairperson of LIV Golf Investments
- Multiple other PIF leaders and Saudi businessmen serve on LIV’s board
- LIV has not disclosed exact details of PIF’s ownership stake or investment amount
Based on this close connection to PIF and Saudi leadership, there is little doubt that the Kingdom effectively controls and owns LIV Golf.
How Much Money Has Saudi Arabia Put Into LIV Golf?
LIV Golf has not transparently disclosed the exact amount of funding provided by PIF. However, based on the massive signing bonuses offered to players and operational expenses, estimates range from several hundred million dollars to up to $2 billion invested by the Saudis so far.
Some key publicly reported funding details:
- LIV reportedly paid Dustin Johnson $125 million and Phil Mickelson $200 million just to sign with the league
- Other players have received signing bonuses from $50-150 million
- LIV player contracts are worth between $100-200 million over 4 years
- LIV has committed over $2 billion in future contracts and bonuses according to some player agents
- Operational costs for events, marketing, broadcast production likely total several hundred million dollars
While the exact number is not verified, it is clear LIV Golf has required an investment of billions of dollars from its Saudi backers to sign top players and launch its operations. This massive pool of money can only come from a sovereign wealth fund like PIF.
Lack of Transparency Around PIF Investment
Unlike typical professional sports leagues, LIV Golf has provided little transparency around the details of its financing and PIF’s stake. Several key unanswered questions include:
- What is PIF’s exact ownership percentage of LIV Golf Investments?
- How much capital has PIF directly invested into the league so far?
- Do any other entities or individuals have ownership stakes?
- What is LIV’s business model and path to profitability?
This lack of financial transparency only reinforces speculation that LIV Golf is more about Saudi sportswashing than a commercially viable league.
Where Does LIV Golf Money Come From?
Given the opaque nature of PIF’s investment, critics have raised concerns about the original source of the funds behind LIV Golf. As Saudi Arabia’s sovereign wealth vehicle, PIF’s assets come from the Kingdom’s oil reserves and other natural resource rights owned by the government.
Key sources of the wealth that fills PIF’s coffers include:
- Profits from Saudi Aramco, the state-owned oil and gas company
- Revenues from Saudi Arabia’s vast oil and gas reserves
- Investment returns earned on existing PIF assets
- Proceeds from Saudi government bonds and privatization programs
- Strategic partnerships and investments from foreign governments and corporations
PIF was originally funded by capital injections from the Saudi central bank. Today, transfers from the government budget and the aforementioned sources provide ongoing funding.
Therefore, the original source of LIV’s backing can be traced to the profits from Saudi oil and other natural resources. This had led to criticism that professional golfers are indirectly being paid by Saudi oil money.
Concerns Over Source of LIV Funding
Critics have argued that the funding fueling LIV Golf is problematic for several reasons:
- It derives from state-owned fossil fuel assets that contribute to climate change
- Saudi Arabia has a poor human rights record and repressive policies
- Women and minority groups face discrimination in Saudi Arabia
- The kingdom has been accused of alleged sports washing with high-profile investments
However, defenders claim LIV Golfers should not be blamed for accepting pay from a controversial source. The players are simply operating as independent contractors maximizing their income in a short career window.
There are reasonable arguments on both sides of this heated debate.
Has Saudi Arabia Admitted to Funding LIV?
Saudi officials and LIV Golf executives initially downplayed the kingdom’s role in the new league. However, in recent months there has been growing acknowledgment of Saudi Arabia’s critical support and ownership.
Greg Norman, LIV Golf’s CEO, admitted in a media interview that “without Saudi Arabia’s PIF, LIV Golf would not exist.” Yasir Al-Rumayyan, head of PIF and LIV Golf’s board chair, has discussed the league as one component of the fund’s broader investment strategy.
Saudi Arabia’s minister of sport stated publicly in June 2022 that the kingdom is supporting LIV financially as part of efforts to become a global hub for sports. Government officials have visited LIV event sites to demonstrate their backing.
While Saudi leaders initially avoided linking PIF to LIV, they have become more open about the connection as the league gained momentum. This increasingly on-the-record support leaves little doubt the new golf league is a strategic priority for Saudi Arabia.
Remaining Uncertainties
Despite growing acknowledgment of Saudi funding, details around LIV Golf’s ownership and financing remain uncertain:
- Exact size of PIF’s ownership stake unclear
- No transparency on PIF’s capital injections into LIV
- Confusion if other investors are involved
- Business model and path to profitability not explained
Both LIV executives and Saudi officials have not provided full clarity on these key questions.
Does the PGA Tour Receive Saudi Funding?
Unlike LIV Golf, the established PGA Tour does not receive direct funding from Saudi Arabia’s PIF or other Saudi entities. However, the kingdom does host popular PGA Tour events each year.
These include the Saudi International tournament on the Asian Tour, which attracts top PGA players. Tiger Woods reportedly received an appearance fee over $3 million for competing in Saudi International in 2019.
The Saudi-funded LIV Golf league has accused the PGA Tour of hypocrisy for allowing its members to play for large appearance fees in Saudi tournaments while criticizing LIV’s Saudi backing.
But the PGA Tour itself has no ongoing financial support from Saudi Arabia. LIV Golf’s multi-billion dollar launch and operations remain dependent on continuous Saudi funding.
Key Differences:
- PGA Tour has no direct Saudi investment or ownership
- Saudi Arabia spends millions on appearance fees to attract PGA stars
- LIV Golf dependent on ongoing Saudi subsidies to operate
- PGA tournaments in Saudi Arabia organized by independent parties
While the PGA Tour has been criticized for allowing events in Saudi Arabia, its financial structure is completely independent from the kingdom.
Does the Fact LIV is Saudi-Funded Matter?
LIV Golf’s Saudi backing has become a flashpoint of controversy. Critics argue it should disqualify the league from consideration given concerns over Saudi human rights, sportswashing, and funding sources.
But others claim LIV should be judged solely on its merits as a golf product. In their view, who provides the capital is irrelevant to fans and players.
There are reasonable arguments on both perspectives:
Arguments Against Saudi Funding:
- Enables Saudi sportswashing attempts to improve image
- Provides platform to gloss over human rights concerns
- Contributes indirectly to climate change through oil funding
- Links players to repressive policies like ban on women’s rights
Arguments Downplaying Saudi Funding:
- Financing sources shouldn’t matter for a sports business
- Free market principles say investors can do as they wish
- Maximizing income is a personal business decision
- Athletes have limited prime earning years
This remains a polarizing issue among golf fans, players, politicians, and pundits. There are plausible cases that LIV’s Saudi backing both does and does not matter when evaluating the upstart league.
Is LIV Golf a Form of Saudi Sportswashing?
Many critics have characterized LIV Golf as an example of “sportswashing” by Saudi Arabia. Sportswashing refers to countries or organizations attempting to improve their global image and reputation by investing in sports and high-profile athletes.
Key evidence that LIV Golf serves a Saudi sportswashing function:
- Saudi Arabia has a history of sportswashing like hosting major boxing and Formula 1 events
- LIV tournaments held in Saudi Arabia at new “signature” courses
- Local Saudi players given spots to drive interest in the kingdom
- No clear path to profitability aside from reputational goals
- Attempts to scrub Saudi human rights record from public discourse
However, LIV Golf argues it is solely a commercial enterprise aimed at providing an alternative for fans and players. The league claims it is unfairly targeted by sportswashing allegations.
Saudi Arabia is clearly invested in using high-profile sports to improve perceptions and reduce focus on its human rights policies. But definitive proof LIV was launched primarily for reputation management remains elusive.
Challenges in Proving Sportswashing Motive
Confirming sportswashing as the main motive is difficult for several reasons:
- Cannot definitively know intentions of Saudi backers
- Non-political goals could co-exist with reputation aims
- Establishing profitability will take time
- Requires perspective to judge if public opinion shifted
Those accusing LIV of sportswashing likely have reasonable basis for suspicion. But in the absence of access to internal Saudi decision-making, proving intent remains challenging.
Conclusion
In conclusion, while not all details have been disclosed publicly, LIV Golf clearly exists and operates only due to the backing of Saudi Arabia’s Public Investment Fund. The close control exerted by PIF and Saudi leaders leaves little doubt the government effectively owns the league.
The exact sportswashing motivations will be debated. However, LIV Golf would not be able to lure top pros like Phil Mickelson away from the PGA Tour without relying on billions of dollars from the Saudi sovereign wealth fund. Given concerns over the kingdom’s human rights record, this heavy reliance on Saudi state funding remains highly controversial.
Going forward, LIV’s success may depend on increased transparency around its finances and ownership structure. Finding a path to commercial viability independent of ongoing Saudi subsidies could also allow LIV Golf to dodge criticisms of being primarily a sportswashing vessel. But for now, the upstart league remains tightly intertwined with and dependent on the Kingdom of Saudi Arabia.
