Greg Norman’s world isn’t full of positives these days. Unless you include the commensurate savings on Kool-Aid orders each time one of his hapless executives runs for the exit. LIV Golf’s schedule is still incomplete, there have been no signings of new stars and there has not been any trading activity between the teams. These aren’t the only issues that threaten LIV’s long term viability.
Other problems include the inability to sign enough quality players, the inability to attract corporate sponsors, the inability to win fan support that isn’t generated in a bot farm, the failure of retaining senior executives, who have all unceremoniously resigned; and the crushing failure to secure a broadcast contract, which has led LIV to discuss paying The CW to host its events, after Fox Sports failed.
To make all that more than humiliating, you will need a powerful Kool-Aid.
LIV has another potential risk for those who are open to thinking beyond the golf course. This is where LIV’s most powerful threat — possibly its greatest — plays out in a Northern District courtroom. LIV brought an antitrust lawsuit against the PGA Tour. The Tour countersued. As the Tour seeks discovery from the Saudi Arabian Public Investment Fund (which is funding LIV) and Yasir Al Rumayyan, the Fund’s Governor, the proceedings have turned into an interesting saga.
Tour claims that LIV is owned and controlled by Saudi funds. Al-Rumayyan, the ultimate authority of the league, is what the Tour is arguing. This makes discovery from these parties crucial to the Tour’s case. The Saudis have tried to avoid any discovery. Al-Rumayyan submitted an affidavit to the court stating that the Fund claims foreign sovereign immunity as an institution of the Saudi state. He also stated that he could be sentenced to 20 years in prison under Saudi law for leaking classified information. Salma al-Shehab, somewhere, is crying for him. For tweets that were critical of Al-Rumayyan’s friends in the regime, she was sentenced to a 34-year term.
PIF arguments are nonsense. The Saudis claim that they are not under the jurisdiction of the courts they seek protection from, after they have directed LIV to file an Antitrust Suit. This was initially through 11 players. Professor Jodi Balsam from Brooklyn Law School noted that there is an exception to sovereign immunity claims for “commercial activities”. This gives the court authority based upon the Fund’s control over LIV. This control is undisputed: at a January 13 hearing, it was revealed that the Fund controls 93 percent LIV and pays 100 per cent of its costs. It makes it laughable that the Fund would claim that it is an observer in antitrust litigation.
LIV asked for an expedited court procedure and promised Saudi cooperation. It’s probable that the judge will order discovery from Al-Rumayyan, his Fund. This ruling would have unappetizing consequences for LIV players, who may hope to avoid having their affairs revealed for lawyers. LIV’s antitrust suit could be ruined if the court draws negative inferences from Saudi refusal to comply. Al-Rumayyan and the Fund are much more likely to cooperate with discovery, even if they have set strict parameters.
Discovery can be permissive up to the point that it becomes invasive in the U.S. legal systems. However, there are crossfire risks. Jon Gruden, a former Raiders coach, was fired after homophobic and racist emails were discovered in a workplace lawsuit involving the Washington Commanders. This case could see both the Saudi fund’s known and undiscovered investments exposed to the public. Even if the discovery is limited to the golf sphere only, pulling at threads could reveal things that the Saudis would prefer to protect.
LIV, for example, has been explicitly politicized by its attachment to Donald Trump. It hosts events on Trump’s golf courses, as he publicly urged PGA Tour members to “take the money from his Saudi partners.” In Riyadh or Palm Beach, it would be frowned upon to examine the relationship between Trump and the Fund. Federal law forbids foreign governments to attempt to influence U.S. domestic political decisions. The discovery of the Saudi fund’s investments could expose their inherent political nature.
Over the objections of its advisors, the Public Investment Fund, which is ultimately controlled and managed by Crown Prince Mohammed bin Salman, invested $2 billion into a private equity firm owned by Jared Kushner, Trump’s son in-law. McKinsey and Company considered the LIV project to be financially viable. Another couple of billion has been burned there. The discovery of motives behind the Saudi fund’s irrational investments could reveal that they are not motivated by sportswashing or profit.
LIV players might regret signing if they miss legitimate competition. This might be more relevant to LIV’s financial advisors who are in a legal maze of their own making.
LIV’s lawsuit against PGA Tour will be greatly affected by the extent that Al-Rumayyan’s Fund cooperates with the proceedings in California’s Northern District. LIV’s existence could be affected by the extent to which they fear scrutiny. The trial date for the antitrust case was set by Judge Beth Labson Freeman in January 2024. Although it was always an optimistic schedule, the Saudis’ delay tactics and insistence on not making public the transactions of their wealth fund raise questions about what legal issues will remain pending one year from now.
