You Want to Own A Piece of Phil Mickelson? You Can Do It with LIV

It now appears that players in LIV are not just employees of LIV, but they are property.  That’s step two in the LIV concept, and that’s how LIV plans to make their money back.

Here’s the deal. Big names, like Phil Mickelson and Brooks Koepka and Bryson DeChambeau, and as many as nine others are part owners of their teams.  LIV currently owns the rest of each team. We have no idea what the percentages are.  X percent to a team captain and Y percent to LIV.

Very soon, LIV will start selling a portion or maybe all of their ownership to other people who want to own a golf team.  At least that’s according to Atul Khosla of LIV, who used to work for the Tampa Bay Buccaneers.  He explained the broad strokes in a Golf Digest article.

So, in the near future, somebody can buy part of Phil’s team and, basically, Phil.  Brooks’ team and Brooks.  Bryson’s team and Bryson. And so on.

The value of these new golf teams will rely on the perceived value of the team captains as much as the team members. So, how much is it worth to someone to “own” the Hy Flyers, Mickelson’s team, in partnership with Phil and the Saudis?

In addition to Phil, the team includes Justin Harding of South Africa, Ratchanon “TK” Chantananuwat, a 15-year-old so-called phenom from Thailand, and Chase Koepka, brother of Brooks.

We have no information on whether these players are the final members of his team or if the teams change. But if anybody is putting down money, they are going to want to know what they “own.”

Will this work?  Well, members of the Walton family recently paid $4.65 billion for the Denver Broncos. It was a record for an NFL team. But the Broncos have history, fans, a following, tv deals, and all manner of other sources of income, from banners to sky boxes.

Certainly, the Hy Flyers are not worth that. Not now, and probably not ever.

However, the Saudis believe they can turn this team golf concept into something that approaches the value of other sports teams. They are betting that there are enough rich guys and gals out there who will want to own their own golf team with at least one known star.

That’s why they need name players.  They are selling the likeness, promised participation, and other activities of players to make money for themselves.   There may be nothing that says the players will get additionally compensated beyond their current contracts. Although as part owners, they might be in line should the team make money.  Unfortunately, as partners, they may be on the hook if a team loses money.

With partnership buy-ins and whatever they get from other revenue sources, LIV hopes they will be able to more than pay for the $100-200 million for 48 players, the $300-$400 million, or $1 billion or whatever it is they are paying for purses and private jets and buckets of champagne. They view all this as upfront costs, like a software startup.

LIV expects a return on its investment

LIV fully expects to recoup their expenses and more from the new team owners and whatever tv deal they eventually concoct.

Now, what happens to the golfers who are not team owners and even the ones who are team owners is that they are not just employees. They have become property.

Being an employee is one thing.  But getting “sold” just has a nasty flavor to it.  Of course, that’s what the NFL and NBA and NHL and most professional sports teams do with their “property.”

It just sounds wrong for golf. And we can bet that the players on those teams don’t think of themselves as property, even though they are.  Independent contractor to property, quick as you please.

As a part of a team, LIV golfers may have no say in their future.  Maybe their contract doesn’t get renewed. They get dropped. Like a lot of sports organizations, they are possibly going to be bought and sold and let go from their team structure in the future.

And then where do those golfers go?  Back to the PGA Tour or the DP World Tour with hat in hand? To the LIV supported or owned Asian Tour? What about these youngsters James Piot or the 15-year-old Ratchanon ‘TK’ Chantananuwat?

We can’t tell people not to take the money. Or shame them for doing it.  Everybody has to eat.

Charles Barkley famously said he’d kill a relative for $200 million. But where do these young men go to get their lives back if the Saudis lose interest or their idea falls flat after three years? Or if they sell out all the teams and disappear, taking their pile of money with them?

All of a sudden, it’s time to remind ourselves of the Nabisco sponsorship deal on the PGA Tour many years ago.  Nabisco wanted a presence in golf that was bigger than the Nabisco Dinah Shore. They had money after being bought by a tobacco company, RJR.

A special Nabisco program was created on the PGA Tour, concluding with the Tour Championship and Nabisco got title sponsorship of that. They sponsored the scoreboards at golf tournaments.  They were woven into the sport.

Then one-day KKR decided to buy Nabisco, and Zap!, as they say in comic books, the Nabisco money went away.

That’s when the PGA Tour decided they would never again have a title sponsor for the Tour Championship. That’s why Coca-Cola is the presenting sponsor, not a title sponsor. There’s a book which was made into a movie called Barbarians at The Gate that should be required reading for professional golfers at this point.

Will that be the fate of the LIV-ers?  Too soon to tell, but it’s a cautionary tale worth remembering.

Most of the people involved in LIV are too young to even know about the Nabisco deal or anything that went with it. A few of the older guys on the PGA Tour Champions will remember it though.