Saudi Arabia-backed LIV Golf Tees Off Its U.S. Sponsorship Drive—and Ticks Off PGA

LIV Golf enticed golf greats including Phil Mickelson and Dustin Johnson with guaranteed nine-figure deals. Attracting advertisers might be a little tougher. The newly formed tour debuts in the U.S. this weekend with an event at the Pumpkin Ridge Golf Club in North Plains, Oregon—just outside of Portland. LIV Golf promises eight events consisting of 48 players on 12 teams. There are only three rounds of play, totalling 54 holes (hence the Roman numeral LIV in the name) and no cuts after each round. Each day begins with an afternoon shotgun start, with teams beginning play simultaneously on different holes. The games are surrounded by live music, a food festival, swing simulators, mini-golf, fireworks, Navy Seal parachute jumpers, esports, virtual reality exhibits and chipping/putting greens. Meanwhile, club seats range from $250 per day to $10,300 for a three-day all-access pass. It’s part of LIV Golf’s plan to begin golf’s “era of free agency” and change the way fans experience the game. What Topgolf Is Looking for From Mediahub, Its New Media Agency of Record “We are launching a unique golf experience that emphasizes energy, innovation and fun for everyone,” said Greg Norman, commissioner and CEO of LIV Golf, in a statement previewing the Oregon event. “LIV Golf is committed to growing the sport through new opportunities for fans of all ages, and that starts with delivering a world-class event for our patrons at Pumpkin Ridge.” Play it where it lies For brands considering a partnership with LIV Golf, it isn’t that simple. If it were, Mickelson wouldn’t have traded a reported $200 million for his sponsorships with KPMG, Workday, Heineken and Callaway. It’s worth noting that the latter brand dropped him after he joined the league. Johnson’s reported $125 million wouldn’t have cost him (and fellow golfer Graeme McDowell) a relationship with Royal Bank of Canada. From UPS dropping Lee Westwood to Rocket Mortgage saying goodbye to Bryson DeChambeau, brands have stepped away from LIV Golf and its players even as the league woos them. As a nascent league facing both competitive pressure and ethical scrutiny, LIV Golf still has to convince companies that there’s enough prestige and visibility associated with its own brand to make it worth the risk. “We are essentially a start-up and utilizing this year as a beta test for everything from the format to the fan experience to the branding,” said Jane MacNellie, LIV Golf’s vp and head of communications. “From a sponsorship perspective, our events this year are being used as showcases so they can see the opportunities and ultimately partner in 2023 and beyond.” Prestige and information are the keys Tim Derdenger was a scholarship golfer at George Washington University. That’s before he became an associate professor of marketing and strategy at Carnegie Mellon University’s Tepper School of Business. He’s someone who’s looked at marketing through the lens of the golf industry. Derdenger noted that endorsements typically involve two major components: Prestige and information. He referenced Michael Jordan as an illustration of the “prestige effect.” An example is when Gatorade used the “I want to be like Mike” slogan to inspire consumers to associate themselves with Jordan and the products he endorsed. The “informational aspect” has one of the world’s top players, Derdenger’s example was Tiger Woods at his peak, using a brand’s products during play—thus informing the value of those products. This Esports Agent Credits Video Games—Not Coaching—for His Career Reputation as an even par However, when Woods was embroiled in an infidelity scandal in 2009, sponsors including Accenture, AT&T, Gatorade, General Motors, Gillette and TAG Heuer distanced themselves from him. Nike stood by Woods, who was amidst a 280-week run as the world’s top player at the time. To Nike, Derdenger said, the information fans received from Woods’ use of Nike equipment on the course outweighed his diminished prestige. “Nike Golf had to ask themselves ‘Does Tiger Woods’ negative reputation and scandal hurt me? The answer is yes. But that's not the actual question that they were asking themselves,” Derdenger said. “The actual question is, ‘Am I better or worse off if I drop Tiger Woods completely? Does the scandal completely erode away all of his endorsements? My paper with my colleagues said the answer to that was no.” By bringing in players including Mickelson, Johnson, DeChambeau, Brooks Kopeka and Patrick Reed, Derdenger said LIV Golf is informing fans and potential sponsors that there will be high-quality golf played at its events—albeit in a new format. Dr. Deborah Gray, who’s spent 20 years at Central Michigan University teaching marketing strategy and branding with a focus on the golf industry, said LIV Golf’s choice of players set the tone early. “New-to-market brands often encounter hurdles as they establish their position in the marketplace,” Gray said. “LIV is establishing its market presence by aligning with golfers who fans recognize and this helps give the LIV brand credibility and reach.” The Saudis and sports-washing However, Derdenger and Gray didn’t touch upon LIV Golf’s issues of prestige. LIV Golf receives the glut of its funding from Saudi Arabia’s $600 billion Public Investment Fund (PIF). The fund has purchased a stake in English Premier League soccer club Newcastle United and has sponsored Formula 1 races and teams. It’s all part of Saudi Arabia’s Vision 3030 plan to diversify its business interests and improve its image overseas. That plan is led by Mohammad bin Salman, who’s been accused by the Turkish government and several global intelligence agencies of ordering the murder and dismemberment of Saudi Washington Post journalist Jamal Khashoggi at Istanbul’s Saudi consulate in 2018. He’s denied any involvement—though Mickelson seemingly disagrees—but it’s just one of several items tarnishing the kingdom’s reputation abroad. https://twitter.com/firepitstories/status/1494317430180622338?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1494317430180622338%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.barstoolsports.com%2Fblog%2F3406576%2Fphil-mickelson-on-the-saudi-golf-league-theyre-scary-motherfuckers-to-get-involved-with Saudi Arabia’s treatment of women, LGBTQ+ citizens, prisoners and dissidents (who it often executes in large numbers) and neighboring countries hasn’t gone unnoticed in LIV Golf’s host city of North Plains or the surrounding area. North Plains mayor Teri Linehan and 10 other mayors in surrounding Washington County sent a letter to Pumpkin Ridge’s Texas-based owners, Escalante Golf, voicing their opposition to LIV Golf’s event. “We refuse to support these abuses by complicitly allowing the Saudi-backed organization to play in our backyard,” the letter read. “Human rights outbid all the rest.” The kingdom’s involvement has also led to a drumbeat of accusations of “sports-washing” in the press. Other outrages have mushroomed against the league as well. Some Pumpkin Ridge members, who’ve reportedly had their fees increased to fund course upgrades for the event, have quit the club over LIV Golf’s arrival. From comments fields to letters to the editor to op-eds to please from relatives of Sept. 11 victims, there’s been vocal opposition to LIV Golf’s Portland event and its backers. Yet even they may not be its biggest detractors, or threats. https://twitter.com/joesimonssays/status/1541434427657445376 Golf wars Before LIV Golf’s first event in early June, the PGA Tour announced that it was suspending the golfers who’d gone over to LIV—several of whom had already resigned their PGA Tour membership. PGA Tour stars Rory McIlroy and Justin Thomas criticized the LIV Tour, with McIlroy aiming grievances at LIV CEO Norman himself. Rocket Mortgage, RBC and KPMG all cited relationships with the PGA Tour has when ending their sponsorships of LIV Golf athletes. While LIV’s golfers are guaranteed a paycheck, potential sponsors aren’t assured they’ll get the one thing they know the PGA Tour has: Viewers. In 2018, Discovery Communications paid $2 billion for the Tour’s international media rights. In 2020, the PGA Tour announced a nine-year deal with NBC, CBS and ESPN+ worth roughly $700 million a year. While golf ratings are down from Woods’ peak years, they’ve gradually increased throughout the pandemic. LIV Golf currently only broadcasts its matches through Facebook and YouTube streams, leaving potential sponsors with questions about audience engagement. “What [brands[ are revealing by dropping these athletes is that there's potentially a better option out there for them,” Derdenger said. “The sponsors are thinking ‘Well do I stay with this player and now the number of eyeballs that I have on him are going to be smaller—though I'm paying him X amount of dollars, but I'm only getting a fraction of the eyeballs—or am I better off dropping them and finding someone else on the PGA Tour where there are more eyeballs?” That may further limit LIV Golf’s pool of marketing partners, but could also open opportunities in sectors currently underserved by golf. Gray noted that LIV is creating an entirely new business model, which suggests that it might abandon the traditional golf sponsorship model as well. “I would not be surprised if LIV’s future sponsors are companies and brands that are not traditionally associated with golf,” Gray said. “So far the LIV brand and business model appears to be pretty edgy and nonconventional and so it will likely need to attract edgy, nonconventional or perhaps even unorthodox sponsorships.” How the Pandemic Redefined Golf and Golfing