Picking up the threads from yesterday.
They've been brainstorming the marketing plan and the new logo looks pretty boss:
— Sony Toprano (@HellasVid) June 6, 2023
The Basics - I had started drafting this post yesterday morning, knowing that this morning will feature an interruption from a contractor beginning work. Not sure yesterday's verbiage will survive, but I want to start by reinforcing the key point. Jay Monahan went in front of his troops and admitted to having been less than transparent, but pledging to immediately begin rebuilding that squandered trust, choosing to do so by telling even larger lies. To wit, the big one being that the PGA Tour would be in control. Yeah, that's a good one:
How the governing structure of the proposed PGA Tour-Saudi deal hints at who will have the real power
I suppose, if by "hint" you mean makes blindingly obvious....
The announced framework of the new entity that will combine the PGA, DP World and LIV tours under one banner is short on specifics, but what has been announced—the governing structure,board makeup and future investment protocol—is enough to reveal potential clues about who will have the power.At first read, the PGA Tour has seemingly protected its prized nonprofit status along with its control over between-the-ropes action in its events, and is assured a majority of seats on the board of the umbrella organization to go with PGA Tour commissioner Jay Monahan’s CEO title. But to one entrepreneur and corporate board member who is a veteran of multiple mergers, sales and acquisitions, the language about the Saudi Public Investment Fund’s (PIF) priority financial position makes it pretty clear who would be behind the wheel if this deal goes through.“Does the PGA Tour think it won because it is effectively a monopoly and will now be backed by unlimited money? Maybe,” says Bruce Welty, who has started, led and sold multiple logistics and robotics companies that have a combined market value of more than $2.5 billion. “But money always wins. If the Saudis can block other investments and continue to buy unlimited shares, they basically have pre-emptive rights. They’re business people. It’s hard to imagine a scenario where they would give basically unlimited funds and not put themselves in a position where they can take control of their investment.”
That the deal can only be sold with a big lie tells me all I need to know....
Even if the PGA Tour-Saudi deal language stipulates a particular specific executive board makeup, if those terms aren't durable or permanent, they're ultimately subject to change. "In business, control shifts within a company. When the board makeup changes—like when new members join—the board can make decisions that are completely contradictory to the original charter,” Welty says. “In this case, how firm are the commitments? If they aren’t, it doesn’t matter what anybody says today. They can do whatever they want down the road.”
The deal should be understood as ceding control of global professional golf to the Saudis.... Ironically, the "deal" or "term sheet" is so lacking in details that I wonder why they even shared that right-of-first-refusal with us. Could it have been for the simple reason that they had to say something?
The piece also deals with this issue that others have noted:
All of that assumes one basic fact Welty does not consider a foregone conclusion: That the deal goes through. Indeed, in the days since the surprise announcement, the question of whether such a deal would pass government scrutiny, either from Congress or the Department of Justice, has become a popular topic of discussion. The lack of specifics on what the new entity might actually look like makes it hard to know its true viability, but Welty is among those who see potential issues.
That Justice Department antitrust investigation has always been a curious aspect of this kerfuffle. Its inception was probably tied to Biden's trip to Saudi Arabia and his plea for them to pump more of that dangerous black gold that's killing Gaia. But the author could do with a cynicism transplant, because doesn't that tell us how this will play out? The Biden Administration will feign concern, the Kingdom with agree to pump more oil timed perfectly for maximum impact in, checking calendar, November 2024. It's like I'm Nostradamus or something...
What Changed? - I started to draft this yesterday, but it's a little surprising how little written commentary there is on this. But first, that hypocrisy thing again, let's enjoy this mewling from Jay:
"I recognize that people are going to call me a hypocrite," Monahan said. "Anytime I said anything, I said it with the information that I had at that moment, and I said it based on someone that's trying to compete for the PGA Tour and our players. "I accept those criticisms.
One thing that's changed is that, contra your question from last year, they will now have plenty of cause to be embarrassed. Oh, so that was rhetorical? Good to know....
That piece linked above has this curious coda:
“Everyone has a take, but the general universal take I’ve heard is that it smells bad. Maybe the PGA Tour feels threatened, and this is the best they can do to preserve their franchise. But going from being a not-for-profit to a for-profit, that changes everything. If you’re a for-profit business that has a monopoly? It’s impossible to think that that won’t be the subject of a lot of scrutiny,” Welty says. “Mergers and partnerships happen all the time. It’s part of the game. You’re competitors until you aren’t. Generally speaking, there's usually a reason for a merger to happen. Usually, one of the companies isn’t doing so well and needs to merge. It doesn’t typically work when it's a merger of equals. It's also clear because there’s a profit motive at the end of the day. The deal gets done to increase shareholder value. With this, the motives aren't entirely clear. Is this to avoid a lawsuit? What are the Saudis’ motives? What are the incentives of the PGA Tour leaders? We don’t know.”
I don't actually think the Saudi's motives are unclear. The want to act as a Colossus bestriding the sports world, whereas Patrick Cantlay just wants to get paid and Jay Monahan needs a lucrative gig for a few more years. Win-win, baby!
But Jay has performed an Olympic-quality walkback and ESPN at least attempts to explain the shocking change in position:
So what changed? Sources told ESPN that the PGA Tour and LIV Golf have each spent tens of millions of dollars defending themselves in a federal antitrust lawsuit that LIV Golf and 11 of its players filed against the PGA Tour in August. The PGA Tour filed a countersuit, claiming LIV Golf interfered with its contracts with players.On Friday, the U.S. Court of Appeals for the Ninth Circuit in California denied the PGA Tour's motion to dismiss LIV Golf's appeal over sovereign immunity. The case would have likely dragged on for several months, if not a couple of more years. Neither side wanted to share its secrets via required discovery, and neither wanted to keep spending money on lawyers.
No issue with the antitrust litigation being AN issue, just hard for the conceive of it as decisive. The Tour has gotten the better of things, which seems lost on the writer of the excerpt above. Neither part wants to do this and neither wants to that, but only one side capitulated...
I assume the issue is financial. Specifically, having met the extortion demands of all those terrific peni, Jay seems to have found himself unable to fund such an ecosystem in the usual manner. He'll plead force majeure, with some basis, though it seems like a pretty obvious failure of leadership.... Made more curious given that the capitulation comes amid the LIV model's obvious failure.
Of course, it leaves one of those blindingly obvious questions. We're now institutionalizing a system of compensation that is order of magnitudes higher than can be supported by the golf ecosystem. What's the plan is the Saudis get bored or find out that Max Homa is Jewish? As far as I can tell, the plan is to assume that the Saudis will fund in perpetuity, but one anticipates all sorts of fall-out among the Tour's traditional sponsors, at least those that have women and/or Jews among their customers. I would imagine that, at this moment in time, Honda feels like they dodged a bullet.
Winners And Losers - Let's have at this, though we'll be leaning heavily on Alan Shipnuck, whose whataboutism extends to dismissing any criticism of Saudi human rights abuses because, well, reasons. Ironically, one thing Alan can't bring himself to contemplate is what turning global professional golf over to the bonecutters might look like, but I'm sure it's be fine.
WinnersGolf fans! Putting the sport back together means all of the best players will face off more than just four times a year at the major championships, once all the details get worked out. There was a hole in this year’s Players Championship without defending champion Cam Smith just as Pebble Beach didn’t feel right without Phil Mickelson. The press conference bitchiness and social media daggers will now (mostly) cease, which will be a relief to many fans who have been turned off by the tribal negativity. The new unified superschedule should be far more interesting, incorporating venues from around the world. And incorporating LIV’s team element with more stars and the built-in frisson of mixing old antagonists should add some razzle dazzle. Golf has plenty of 72-hole stroke play events, there is certainly room for a more baked-out team component for maybe half of dozen events on the new unified schedule.
Big if true! Though I would suggest that I am one such golf fan, and I'm feeling like the biggest loser on the planet. Our players have revealed themselves to be a bunch of overly-entitled jerks, and I would think that might have some lasting implications, but perhaps Alan has his finger on the pulse of the golf audience, meaning both of them.
Interestingly, Golf Digest has a similar piece up, but they take a contrary position on that nearest and dearest to Alan's heart:
Loser—The team golf concept: We may see some aspect of it survive, but between the names that 6-year-olds would choose (Range Goats?) and the franchise idea being a total non-starter, the only teams we care about—Ryder or Presidents—are attached to the cups. —Tod Leonard
Though only one of those cups is cared about. Lost in translation from Day One has been the rather substantial difference between team match play and a team event within a stroke play event. One rocks and the other bores, but folks don't seem to appreciate that distinction.'
Alan also seems to assume that LIV will survive as an operating entity, which doesn't seem clear to me.
Back to Alan whose got a howler for his second winner:
Greg Norman. It remains to be seen if he will have an official role in the new consolidated tour—seems doubtful, since he was glaringly absent in today’s announcement—but Norman has nurtured the idea of a world tour for three decades and been a driving force at LIV, which forced this compromise. He can ride off into the sunset having finally achieved the validation he so desperately needed.
Really? Because it seems that he's the only guy having a worse week than Rory.... I haven't checked my milk carton, but has anyone heard from the Aussie? Kind of funny to hear Alasn, who is supposed to be in the know, wonder about Sharkie's future,. when the rest of us have figured out that he's reached his sell-by date. Should we check the published schedule for the next mass beheading to see if Greg's on the list?
Brooksie had this the other night, which I'll begrudgingly agree is humnorous:
Welfare Check on Chamblee
— Brooks Koepka (@BKoepka) June 6, 2023
But Brandel has come out and taken the heat, whereas Sharkie has gone to ground.
Phil Mickelson, Brooks Koepka, Dustin Johnson, Cam Smith, Bryson DeChambeau and the other LIV captains. They collected huge upfront money and have 25% equity stakes in their teams. The Saudi Public Investment Fund is now underwriting this whole sport and it will be sure to look after the interests of those who have been loyal to LIV. That means ensuring there will be at least a handful of team events on the new schedule, which will drastically inflate the value of the franchises as they get network TV exposure and access to the Tour’s traditional sponsors. For those predicting the demise of the LIV-style team element, that is the core identity of what the PIF has invested in, and, more to the point, LIV has always been Al-Rumayyan’s baby. He will not walk away from it entirely. Otherwise, the PIF is pouring billions of dollars into merely propping up the PGA Tour and European Tour, both of which previously rejected overtures for partnership. One LIV captain, upon hearing the news on Tuesday morning, had this to say: “Time to start recruiting.”
Weirdly structured, no? It's not so much the captaincy that gives them the "W", it's really just the size of the checks cashed. Though lumping Phil in with the others is odd, as he'll have his own circle in hell reserved.
Here's that more logical GD treatment:
Winner—Phil Mickelson: In the early portion of this saga, Mickelson had not only become a punchline, he had destroyed his own legacy. All the goodwill he built up with his remarkable PGA Championship win at age 50 at Kiawah Island was gone when he got in bed with the people he called “scary motherf—-ers.” But, as Mickelson proclaimed before all this chaos began, this was a once-in-a-lifetime opportunity to reshape the sport and how the PGA Tour operates. Tuesday’s news all but confirmed Mickelson, among others, achieved exactly that. Of course, another way to look at it is that Mickelson brought those same scary MFers to the PGA Tour’s doorstep, which now seemingly taints the entire golf world at large. Then again, it appears Saudi Arabian influence can be found in more than a few places these days. Mickelson didn’t make this world, he just lives in it and takes advantage of it like the rest of us. Whether or not he can salvage his legacy remains to be seen, but at this very moment, #PhilWasRight. —Christopher Powers
Obviously Phil is the big winner right now, though I don't see how you get to him being "right." He didn't just bring the scary mofo's into golf, he handed the keys to them. i heard Jaime Diaz on Golf Channel speculate that, despite this seeming win, that he though Phil's legacy would still be diminished because of this.... I thought that sounded reasonable, though it also could well be wishful thinking.
The European Tour. In golf’s new world order the ET has been reduced to being a feeder for the PGA Tour, and week-to-week the tournaments have few stars and even less buzz. Now the Euro Tour gets a lifeline as part of the new global schedule. Fences will need to be mended, and for CEO Keith Pelley to take a more nuanced approach to reinstatement, but now the possibility exists that the Tour can welcome back Sergio Garcia to the Spanish Open, Lee Westwood to Wentworth, Martin Kaymer to the German Open and bring back into the folk the rest of the big names who decamped to LIV.
Maybe, though they're such a insignificant factor in golf these days, that I suppose for them there was no downside. With hindsight, would we have been better of if we'd allowed the Saudis to take over the Euro Tour and kept them out of the U.S.?
Mohammed bin Salman. The scariest motherfucker in geopolitics has staked his reign on Vision 2030, his effort to remake the Saudi society and economy. Growing the sports and leisure sector is a key component and the Saudis now control a global professional sports league that caters to an affluent, sophisticated audience. And the PIF suddenly has new business ties to many of the biggest companies in the world, and the ultimate bit of sportswashing: the stamp of approval from the PGA and European Tours.
Sure, though Alan has been happy to do his bidding the last two years...
This doesn't change anything, though I will enjoy all the heads exploding:
Donald Trump. The USGA, PGA of America, R&A and PGA Tour have all renounced him as a tournament host. But Trump has three venues on this year’s LIV schedule and further commitments going forward. We’ll see if/how they are honored but this merger may give Trump a side door back into the golf world.
I look forward to that FedEx Cup at Trump Bedminster....
Not so sure about this one:
Jimmy Dunne. The dude already wakes up and has to decide if he wants to play at Cypress Point, Pine Valley, Shinnecock Hills, Augusta National or Seminole, as he is a member at all of them. Now the ultimate insider has burnished his reputation as golf’s preeminent deal-maker.
Dunne's role in this might be the single most alarming aspect, as he seems to have forgotten all those funerals he attended. Never Forget they told us, but in the fine print there's apparently an exclusion when large checks are on offer. If he's still marking his golf balls with a "Q" then he might retire the hypocrisy championship belt.
OK, I did a deep belly laugh from this:
The CW. It is unknown how the existing TV rights for all the tours will be reconciled with the new schedule but the CW is now poised to get some big-time tournaments with an array of stars that will surely attract much bigger numbers than the LIV events have so far this season.
Buffy could not be reached for comment.
Money. It remains undefeated.
True enough, though only for certain folks. Those folks have revealed themselves and we are now free to react appropriately.
One last bit from GD that seems to bury the lede:
Winner—Equipment companies: They stayed neutral throughout, even when it wasn’t easy. It was awkward when one of their big names made a surprise jump to LIV and got comparatively fewer TV eyeballs. Should they support their guy and buy into the team concept, or let it play out? They chose the latter, and can proceed with the cleanest hands of all. —Luke Kerr-Dineen
Am I the only one considering how this might affect the proposed ball rollback? That warning shot from Rory about purse sizes can also be extended to the players' resistance to the proposed rule changes. Hard to imagine the players not feeling emboldened, is it?
Shall we get to the losuhs? You know who will get the lede:
Losers
Rory McIlroy. He put his heart and soul into being the Tour’s most outspoken advocate, wearing himself out in the process, only to get sold out by Monahan. The reality is the Tour didn’t need McIlroy anymore. His fierce advocacy helped keep many other stars loyal to the cause, but the Tour had put itself on a financially unsustainable path, with sponsors already beginning to flee. Now that the Tour has access to unlimited oil money, McIlroy is cannon fodder.
Do we think this guy is on the correct list?
Monahan. He turned the battle with LIV into one of legacy, and then morality. Neither argument kept his players from defecting. Then, despite admitting the Tour could never compete dollar for dollar with the PIF, he tried to do exactly that. LIV was always going to win a war of attrition—anybody could see that. The Saudis reached out to Monahan in April 2021, hoping to partner with the Tour. Monahan wouldn’t take the meeting. He could have co-opted them then with minimal disruption to his business. Instead he chose to fight, and now the Tour as we knew it is no more. One fired-up player agent texted this to me on Tuesday afternoon: “The facts are this: Jay grossly misjudged the resources and fortitude of the PIF and did nothing proactive to make the tour less vulnerable to a competitive offering. Upon realizing that the PIF would finance LIV with huge economic incentives, Jay’s solution was to restructure the tour schedule and purses but he failed to ensure that such changes were economically viable. The marketplace answered that question definitively as sponsors were lining up to get out of their deals. The suggestion that the tour’s outlook was bright was wishful thinking at best. With Koepka’s win at the PGA Championship, the PGA Tour’s ultimate plan of ‘waiting them out’ as washed-up diminishing assets became more of a dream than a strategic plan to combat an existential threat. Jay has proven to be grossly unqualified, unprepared and incapable of providing the true leadership that the PGA Tour players deserved through this process. He mixed his ego with his ignorance. As a result of this, the PGA Tour is now essentially an asset of the Saudi Public Investment Fund. Well done Jay!”
OK, you convinced me, Alan, except for that one niggling detail, which is that Jay will be rewarded regally for his incompetence. So, kind of hard for to think that he's getting his just desserts.
Well, d'oh"
Every PGA Tour player who turned down the LIV money. How does Hideki Matsuyama feel today? He rejected an offer of more than a quarter-billion dollars. Rickie Fowler, winless since 2019, said no to $75 million. On and on it goes. They were all saluted for their principled stance, but now Monahan has said yes to the money he implored his players to walk away from!
He sucks, but this is why it's hard for me to call Jay a loser, because it's always other paying the price. We always knew these guys are good, though we were perhaps focused on the wrong guys.
On the subject, this from that GD piece is bat guano crazy:
Loser—Older LIV golfers: The elder golfers who signed with the renegade league benefited most last year, racking up big checks for winning (like Henrik Stenson) or simply showing up and being part of a team (like Pat Perez). But you have to wonder where guys like that fit in now that they’re part of a much bigger and deeper talent pool. LIV needed those recognizable names (Lee Westwood, Martin Kaymer, Charl Schwartzel, etc.)—even if they were past their prime—to build credibility, but will this new entity need them anymore? And does this change how much money they’ll get from their original contracts? Heck, even a guy like Dustin Johnson clearly still has plenty of game, but it’s hard to imagine the 38-year-old ever making $38 million in season earnings again. That being said, there are plenty of other players out there who are jealous of these guys for getting to ride that gravy train for as long as they did. —AM
I don't know what Am is smoking, but I do hope he brought enough to share. These guys parleyed their career oblivion into large checks, and I can only imagine Rickie Fowler's anger at this juncture.
Now we get into an interesting point-counter-point between Alan and Shackelford. I'll let Alan go first:
The major championships. Over the last year their importance and profile have gone through the roof as the only yardsticks left for evaluating how all the best players stack up. Now it’s back to business as usual.
Geoff does a fair job of trashing the Tour, and it's not his fault that it carries such a low degree of difficulty. But he's perhaps a bit more sanguine about those four events than may be warranted:
But I have good news!For now, the major championships are not owned by these charlatans. The big four appear to be on secure-enough financial footing to withstand Saudi overtures. However, the Ryder Cup’s DP World Tour ownership stake means the Saudis and PGA Tour may soon be taking ownership depending on how Pelley and friends structure things. But the Grand Slam orgs appear to have kept just enough of a distance from their PGA Tour “partners” to issue vanilla supporting statements about their pleasure at not getting dragged into Monahan’s mess. While “no comment” would have been better, the Fred Ridley, Seth Waugh, Mike Whan and Martin Slumbers’ of the world know such a response would make more news than just putting out some empty statements about golf’s ability to deliver peace, love and kumbayaedness.The major championship organizations also must feel more secure knowing they draw larger audiences and have history as an eternal draw for players and fans. They’ll still face pressures due to the PGA Tour mismanaging the threat at every turn and showing a willingness to sell out. But unlike Monahan’s Tour taking their eye off the ball so regularly, the USGA, R&A, Augusta National and PGA of America have certainly not morphed into marketing machines oblivious to their missions.
Perhaps not, but did Geoff not catch that Goodfellas impression from Rory last week? A $2.6 million first place check will obviously not cut it with our terrific peni in a world of Saudi munificence, so those organizations have already been warned that they're have to compromise on those missions if they expect Phil to show up. Then there's that pending ball rollback, and we know how the boys feel about that...
I do think Geoff misses an important point here:
For some time it’s been pretty clear that the “player run” Tour cannot be trusted to do what’s best for anything but 200 golfers and 200 Vice Presidents.
I've little doubt that there are 200 VPs at the trough, just a little worried that Geoff might be low. But that 200 players misses the seismic shift from Delaware, to wit, that the Tour is now run for the benefit of twenty players. That's why it was so hot when Jay met the players in Toronto..... He didn't even go through the motion of promising them goodies, because there is nothing in this deal for anyone in the field this week.
Alan finishes by circling back:
Golf fans. Just when things had settled down a little and the major championship summer was in full swing, the ultimate thunderbolt hits. Now there will be months of endless recriminations and second-guessing and pontificating about the future of the game. Wait, that actually sounds kind of fun!
Not so much to the rest of us. Remind me, when is professional cornhole televised?
Have a great weekend. I certainly will not be watching any golf and have little inclination to do our typically Monday Wrappage, so blogging will be on a need-to-rant basis.
No comments:
Post a Comment