Saudi Arabia’s $2bn swing at golf shakes up global game

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Phil Mickelson strolled up to the opening tee at an exclusive private golf course just outside London to cheers from his fans earlier this week. But despite his status as one of the most skilled and marketable players in the game, he was no longer wearing the logos of any of his sponsors.

These days he has bigger financial backers. Lefty, as he is known, is participating in LIV Golf Investments’ new tournament, a breakaway league that threatens to upend golfing’s status quo. It has been bankrolled by Saudi Arabia’s $620bn sovereign wealth fund to the tune of at least $2bn. Total prize money is $250mn, the most valuable reward in the game.

The $200mn fee rumoured to have been paid to Mickelson, who brings his global army of fans and credibility to this week’s event in a private Hertfordshire club, is being paid from the kingdom’s Public Investment Fund. He has declined to comment on his contract and the figure has not been confirmed.

Players have been criticised by activists over their acceptance of huge fees because the new league is backed by a country that has faced western criticism for its poor human rights record, the murder of journalist Jamal Khashoggi by Saudi agents in 2018 and its military operations in Yemen.

Mickelson himself has previously dubbed the Saudis “scary motherfuckers to get involved with”. “We know they killed [Jamal] Khashoggi and have a horrible record on human rights. They execute people over there for being gay. Knowing all of this, why would I even consider it? Because this is a once-in-a-lifetime opportunity to reshape how the PGA Tour operates.” So controversial was Mickelson’s participation that he only confirmed his attendance last week.

The controversy is the latest indication that Saudi Arabia’s oil riches are shaking up global sport, following the PIF-led £305mn acquisition of English Premier League football club Newcastle United in October last year, its purchase of a stake in the group that owns the McLaren racing outfit and state oil company Aramco’s sponsorship of Formula One, which now races in Jeddah.

PIF’s investments are designed to reduce the Saudi economy’s reliance on oil and support Riyadh’s plan to modernise the conservative kingdom. It is not the only energy rich Middle Eastern nation to invest in sports. Qatar is hosting this year’s Fifa football World Cup, Qatar Sports Investments bought French football champions Paris Saint-Germain and Abu Dhabi royal Sheikh Mansour owns English football champions Manchester City.

But some activists have accused Saudi Arabia of “sportswashing” to improve the country’s image. “Saudi Arabia is trying to use the good reputation of the world’s best loved sports stars to obscure a human rights record of brutality, torture and murder,” Lucy Rae, a spokeswoman for Grant Liberty, the human rights organisation, said.

Simon Chadwick, professor of Eurasian sport at Emlyon Business School in Paris, acknowledges the “reputational and image benefits that may flow from an association with the world’s top golfers” but points to wider reasons for Saudi’s investment in LIV.

“The country is encouraging people to play golf, especially females as the government seeks to effect positive social change,” he said. “Plus, there are tourism goals; government in Riyadh wants to entice tourist dollars to the growing number of golf courses in Saudi Arabia.”

Before his election, US president Joe Biden vowed to treat the kingdom as a “pariah”. But Russia’s invasion of Ukraine and the subsequent energy crisis have led to a rethink in Washington as the Biden administration presses the world’s top oil exporter to increase crude production.

At a press conference ahead of Thursday’s launch, some players offered awkward answers to justify their participation. “I don’t condone human rights violations at all,” said Mickelson. Others struggled to say whether they would play in a tournament organised by Russian president Vladimir Putin.

Players practice ahead of the LIV tournament at the UK’s centurion Club. Participating golfers have been suspended by the established PGA Tour © Adrian Dennis/AFP/Getty Images

Aside from concerns about Saudi involvement, the new league also presents a serious challenge to the US PGA Tour, the main home for most top-ranked players. Irish golfer Rory McIlroy said this week that LIV would “fracture the game” and that “boatloads of cash” were the motive behind many players’ defection.

The PGA Tour, which had warned golfers that playing in breakaway competitions without permission could lead to bans, has suspended Mickelson and 16 other LIV participants. LIV called the ban “vindictive”. Of the 17 players, 10 had already resigned their PGA membership.

Meanwhile, the baseball caps and shirts on sale at the Centurion Club hinted at LIV’s commercial goals. They featured names such as the Fireballs, Crushers and Iron Heads — denoting the newly established teams, or franchises, that are at the core of its plans.

Golf already features events in which players represent teams rather than playing as individuals, such as the men’s Ryder Cup and women’s Solheim Cup.

But LIV aims to create teams akin to those in F1 car racing, which holds a championship to crown not only the best driver but also the top team. It has said it also hopes to emulate the Indian Premier League cricket tournament, which has attracted institutional investors.

Unencumbered by longstanding television deals, analysts say, LIV is also free to exploit its media rights. Its opening tournament was screened free-of-charge live on YouTube and Facebook.

Still, the lack of sponsors coupled with the big pay outs to players mean it could be a long time before the PIF will realise a return on its investment, analysts say.

More players are following Mickelson. “Ultimately the money [ for players] here is too great to discount,” said one senior sports executive. “Many more players are going to be walking across the picket line when they see what these guys are making.”

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