The LIV Golf petrodollar route: How the multimillion-dollar Saudi league that signed Niemann for US$100m is funded

To date, the new tour that will receive Chile works almost exclusively with money from the state of the Middle Eastern country, which, through its Public Investment Fund, plans to allocate 2,400 million dollars on the circuit over the next four years. Today, they hardly receive any money for transmission, nor do they benefit from large sponsorships that finance the project.

One of the most striking things about LIV Golf, the new home of Joaquín Niemann, who signed for US$100 million, is how the tour has the ability to attract the best players in the world with multi-million dollar contracts, otherwise it is present in the programming of the North American television giants, it has no sponsorship from any well-known multinational and it is less than a year old. This answer is simple, but at the same time it also provides many nuances that make it in the midst of controversy today.

And it is that the capital of LIV Golf is financially supported by the Saudi Arabian Public Investment Fund a sovereign program of the Middle Eastern country which has $620 billion (assets) and that he wants to spend $2,400 to fuel the tour over the next four years. Impressive figures, unheard of in the world of sport.

A situation that has generated different reactions from fans and experts. There’s the group that believes it’s a simple act of “sportwashing” the term by which the intention to whitewash the image of a country or an institution through sport is known, mainly focused on nations that have problems with the respect of human rights.

There are also those who believe that regardless of the origin of the country that provides economic support, the creation of a super league that pays attention to an institution that has earned the right to have hegemony in the world of golf because of its decades of work, even if it camouflages a project, like it or not, with monopolistic connotations.

Finally, there is the group that believes that the relationship is no problem in a commercial world where the free market dominates and players should have the right to be able to play wherever they want, without having to see their participation at the top level. complicated events. . Among this group there must be Joaquín Niemann and the dozens of golfers who crossed the pond and decided to give the opportunity to a circuit that offers more flexible schedules, better prices and a renewed version of the way to play .

But for all of this to work, it takes money and the best players. What brings the Saudi Public Investment Fund back into the ring is that it is very difficult to understand LIV without understanding the impact petrodollars have on him. Without the millions, the super league would not exist. That’s a fact.

For example, one of the most important sources of revenue for sporting events today is television, especially at the North American level. NBA, NFL and PGA resume schedules every year prime numbers communications giants after multimillion-dollar transmission rights deals. In fact, according to Forbes estimates, Niemann’s former tour made around $700 million a year from media contracts.

The LIV? In the United States (and much of the world) it is broadcast only on youtube . Something that will even be difficult to change in the short term, since currently the main networks of the country of the 50 states (with the exception of FOX) already have exclusive agreements with the PGA.

A stark demonstration of how little exposure the tour has is the comparison between the people who saw the first date of LIV versus the viewers that the RBC Canadian Open, a PGA event, had and did. the same weekend. . While the super league averaged 95,000 viewers on its opening day, the close of the tournament won by Rory McIlroy was seen by three million people.

If, for example, the question of sponsorships is analysed, these are also rare. At the first event this year, held at the Centurion Club in London, there were just three and all local: Ballygowan Water, 6 O’Clock Gin and London Essence Co.

And it is that having the monetary support of one of the richest countries in the world allows many freedoms to the LIV. Not performing to the normal standards of a sporting event is something that helps them, but one that they also want to stop using.

He’s always been in the plans to bring big brands to the tour, but the battle situation with the PGA hasn’t helped that. The Chairman of the Petrodollar Tour himself admitted a few months ago:It definitely affected our ability to go to market with all the sponsors there. ”. A situation that annoys them, but that does not take away their sleep. They know that this is a long-term project and that it will take time before it can penetrate all spheres of the market and the planet. In their favor, they are looking to appeal to a younger audience, that they already have big stars signed to multi-year contracts, and that they clearly have all (or almost) the money in the world. The equation only suggests that the LIV Golf is here to stay.

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Source: Latercera

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