Comment: After LIV-PGA merger, Saudis are just getting started

By Adam Minter / Bloomberg Opinion

Human rights and golf were rarely mentioned in the same breath until the launch last year of LIV Golf, the Saudi-backed tour organized to challenge the PGA. Fans, sponsors, players and PGA executives claimed to be appalled at the involvement of a country connected to 9/11 and the murder of Jamal Khashoggi, among other long-standing human rights concerns. Predictably, then, the news on Tuesday that the PGA Tour and LIV Golf have agreed to a merger largely backed by Saudi Arabia’s sovereign wealth fund has come as a shock.

It shouldn’t. Ownership of a professional sports franchise is a key means for wealth to project status and soft power in the 21st century. It was just a matter of time before Saudi Arabia and other authoritarian governments decided to join the market. For the PGA, which has always been about generating revenue, acceptance was inevitable. Other professional U.S. sports organizations will inevitably follow its lead when presented with the opportunity.

Historically, U.S. sports haven’t lacked for scandals that could and should be seen as human rights issues. Correct or not, those scandals tend to be viewed as criminal matters while human rights as an issue tend to be applied to authoritarian countries, especially during Olympic years. That choice has created some awkward and uncomfortable situations in recent years. For example, despite loud calls by human rights groups to boycott the Games in Beijing in 2008, Sochi in 2014 and Beijing again in 2022, the opportunity to compete — and market — on a global stage has simply been too enticing for athletes and corporate sponsors to turn down.

There are also other reasons to embrace the Olympics. Since the 1950s, Russia and China have viewed the Games, in particular, as a premier means to market their national images at home and abroad. Athletic success at the Games — say, a top spot on the medal table — is openly celebrated as a proxy for national standing. How bad can a government be if it goes from Olympic nonparticipant to the top of the medal table in a generation, as China has?

For China and much of the world, professional athletic success has mostly been viewed as a means to achieving that gold medal. However, as wealth and power has accumulated in professional sports, China and other maligned authoritarian governments have increasingly viewed professional sports as a means to repair their images. In the 2010s, soccer fan Xi Jinping spurred a national soccer spending spree as Chinese tycoons vacuumed up European clubs and players. However, thanks to combination of incompetent management and financial instability, China’s soccer spending has amounted to little so far.

Saudi Arabia has been more methodical in its sports investments, dating back to the 1990s, when it launched what became the FIFA Confederations Cup. In 2021, Saudi Arabia’s Public Investment Fund acquired the Premier League football club Newcastle United. Its soccer league now includes Cristiano Ronaldo, lured by a contract worth $200 million a year; Lionel Messi has been reported to join for as much as $400 million a year. The goal is not simply to improve Saudi Arabia’s image; the Saudi regime views sports as a crucial investment and means of growing the kingdom’s economy beyond its reliance upon oil.

However, accomplishing that requires a foothold in the U.S., the world’s largest and most lucrative sports market. LIV Golf was the perfect vehicle. The PGA Tour, accustomed to its prominence and convinced of its dominance, was vulnerable to disruption. LIV offered a more dynamic and — arguably — fan-friendly golf experience. More important, it was backed by the bottomless resources of Saudi Arabia’s sovereign wealth fund. That money was crucial: It bought players and time for the new tour to establish itself. And even though the PGA Tour was beginning to regain some of its footing after the initial shock of competition, the PGA must have wondered how it could withstand years of Saudi money in a sport — and an industry — that demands big purses. Under the circumstances, a merger was most likely seen as the best option.

The PGA isn’t alone in its willingness to do business with countries that have troubling human rights records. In recent years, both the NBA and the WTA have accommodated China’s political prerogatives after high-profile standoffs over human rights. In both cases, the money to be made in China’s market overrode moral concerns. The PGA’s abrupt decision to merge with LIV is no different. As long as money rules U.S. professional sports, this won’t be the last time such compromises are made.

Adam Minter is a Bloomberg Opinion columnist covering Asia, technology and the environment. He is author, most recently, of “Secondhand: Travels in the New Global Garage Sale.”