(Bloomberg) — Donald Trump stepped up to the tee at the first hole at the Trump National Doral, drove his ball down the fairway and gazed back at the crowd behind him. “Can Biden do that?” Trump asked. “I don’t think so!”
As his round continued, Trump fans shouted words of encouragement at the former president. “Keep up the fight for America!” one said. “We love you 45!” another said. “47!” someone else yelled, causing the crowd to cheer.
The following day, Oct. 28, Trump and his fellow amateurs stepped aside, ceding the course to the professionals of LIV Golf, the controversial new league, which was there for the final event of its tumultuous first season.
The mood at the outset was jubilant—part carnival, part sporting event, part Trump rally. A woman on stilts, dressed as a flamingo, showered fans with bubbles. Nearby, Eric Trump, the former president’s son, signed autographs. “Make some noise Miami!” an announcer bellowed.
For the LIV Golf executives in attendance, there was a lot to celebrate and fret over as they wrapped up the season. In less than a year, they had poached some of the world’s best golfers from the PGA Tour while plunging the once-polite world of golf into a nasty civil war.
So far, the league has proven to be much more adept at generating noise than at making money. Despite many efforts, LIV Golf is still not on US television. Instead, it streams tournaments on YouTube, where the audience is much smaller and less desirable to advertisers. Forbes estimates LIV will generate less than $75 million in revenue this year. The PGA Tour is expected to generate about $1.5 billion, according to a spokesperson. Some sports industry experts don’t expect LIV Golf to ever be profitable.
“I don’t see how you get remotely close to a business number where you’re not going to lose your shirt,” said Michael Payne, a former strategic adviser to Bernie Ecclestone, who built Formula One into an empire.
The executives and players of LIV Golf are aware of such skepticism but say the future is bright. During a pre-tournament press conference at Doral, Phil Mickelson said it was “pretty remarkable” how far LIV Golf had come in less than a year, an oft-repeated mantra of the league’s insiders.
Since its inception in June, LIV Golf’s 48 players, including stars like Mickelson and Dustin Johnson, have competed as individuals—and also, notably, as teams with names like Fireballs, Smash and Crushers.
Currently, Saudi Arabia’s sovereign wealth fund, which holds more than $600 billion in assets, has made a reported $2 billion investment in LIV Golf. But the long-term strategy is for each team to become its own self-sustaining business, generating revenue from tournament purses, merchandise and sponsors.
LIV Golf plans to expand the team concept. Next season, LIV golfers are expected to wear team uniforms with a sponsor’s logo on their hats, shirts and bags. Each squad could eventually build its own golf course to host “home games.” Bryson DeChambeau, captain of the Crushers, envisions his team running golf academies, selling subscriptions and even hawking NFTs.
“We have opportunities to do things that have not been done in the game of golf before,” he said.
To pull this off, LIV Golf has created a new model for commercializing the sport. On the PGA Tour, many tournaments are run by individual promoters, like charitable groups, with their own set of sponsors. Golfers choose which tournaments to compete in, don’t appear on TV unless they are near the lead and go home after two days if they play poorly.
LIV Golf, by contrast, runs all its events, has signed players to massive multiyear contracts requiring them to play in each one, and has created a format with no 36-hole cut, meaning no one goes home after two rounds. Almost everyone appears on each broadcast because LIV controls the production.
LIV Golf executives say the team concept was inspired by Formula One racing. At the end of each tournament, the winning LIV Golf team sprays champagne on a podium. Currently, LIV Golf is looking to create a docuseries similar to Netflix’s popular Formula 1: Drive to Survive series.
Seeing the rising valuations of franchises in other sports, LIV Golf hopes to eventually find wealthy investors to buy each team. LIV Golf Chief Operating Officer Atul Khosla says he has already fielded interest from suitors but the league isn’t ready to sell yet.
“There are people who buy sports teams,” he said. “They just haven’t been able to buy a golf team.”
Skeptics about the league’s future aren’t hard to find. Some critics say the rules are confusing and that fans will never embrace team golf beyond the Ryder Cup and Presidents Cup, in which American golfers play against their international peers.
“If I’m having trouble understanding the team format, then the average TV viewer will have a difficult time as well,” said Ted Bishop, a former president of the PGA of America.
So far, LIV has struggled to find sponsors. Brand managers may be reluctant to be associated with a league backed by the Saudi Arabian regime, which has been accused of slaying Washington Post columnist Jamal Khashoggi. Families of the victims of the Sept. 11 attacks have held protests outside LIV Golf tournaments, saying they want the Saudi government held accountable for supporting terrorists.
Bob Dorfman, a creative director at Pinnacle Advertising in San Francisco, predicted that mainstream sponsors will stay away until LIV Golf secures a US television deal. “Getting a few hundred thousand viewers on YouTube just doesn’t register with major sponsors,” Dorfman said.
One early, enthusiastic backer is Trump, an avid golfer. This year, LIV Golf held two tournaments at Trump-owned courses. According to golf journalist Alan Shipnuck, Trump’s course in Bedminster, New Jersey, was paid $2.8 million to $4.5 million to host a single LIV event. LIV Golf Chief Executive Officer Greg Norman is a longtime friend of Trump’s. Trump’s son-in-law, Jared Kushner, received a $2 billion investment from the Saudi Arabian fund that finances LIV Golf. At one point, Kushner called an executive at the owner of CBS and attempted to convince the network to put LIV Golf on TV, according to the Sports Business Journal.
Those who know Trump say his embrace of LIV Golf is motivated not just by a paycheck but also by payback. In 2012, Trump bought Doral out of bankruptcy and spent $250 million renovating it. The course had hosted a PGA Tour event every year since 1962. But in 2016, after Trump generated outrage over his comments about women, Mexicans and Muslims, the PGA Tour moved the tournament to Mexico City. Trump was furious, claiming the PGA Tour had put “profit ahead of thousands of American jobs.”
Last year, days after Trump’s supporters stormed the US Capitol, the PGA of America announced it would be moving the 2022 PGA Championship away from Trump’s course in Bedminster.
“The reason why he’s doing it is there’s money involved and to stick a thumb in the eye of the PGA,” said Michael Cohen, Trump’s former lawyer. “He’s had issues with them forever. He wanted a PGA tournament desperately and the only way he got it was he bought one with Doral. Then they stopped using it.”
“Trump National Doral is one of the finest golf courses anywhere in the country, and it was our honor to have hosted the very first LIV Golf Team Championship last weekend in Miami,” a Trump Golf spokesperson said in response.
Back at Doral in late October, LIV Golf had offered ground passes for $49, though tickets were selling on the secondary market for as little as $6. Some fans said they attended not only to see golf but to catch a glimpse of the former president.
“It’s this rebel bad boy club, and we’re rebel bad boy fans,” said Keith Byington, 60, of Fort Myers, Florida, who showed up to the tournament wearing camouflage “Make America Great Again” headwear. “If you see my Trump hat you understand that.”
After three days of competition, 4 Aces, led by Dustin Johnson, won LIV Golf’s final event of the year, splitting a $16 million prize. In an interview during the broadcast, Norman said the team-focused event had “completely explained to the world what the LIV model is all about” and predicted next year would be “explosive.”
©2022 Bloomberg L.P.