LIV Golf Plans to Sell Stakes in Franchises for First Time

0:28This is the business of sports. tune into this. If you're playing money ball with a huge bag of money, you're going to be really, really good. Bloomberg Business of Sports from Bloomberg Radio. This is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr. I'm Damien Sanzauer. And I'm Vanessa Perdomo. Coming up today, we hear from the chief commercial officer of the Australian Open to check in down under on how the first grand slam of the year is setting the tone for tennis. That's right, Michael Barr. And later on, we catch up with an old friend of the show, Ms.

1:03Amy Trask, CBS analyst, author, and former CEO of the then Oakland Raiders for a look at some of the latest NFL headlines and to preview the big game. All that and more straight ahead on the Bloomberg Business of Sports, but we start with some headlines in the world of golf. Live Golf is looking to sell minority stakes in its team for the very first time. And here to drop some knowledge on us is friend of the show, pretty much all you guys know about this guy and all of his knowledge, Bloomberg U.S. sports business reporter, Randall Williams. Randall, welcome back to the Bloomberg Business and Sports.

1:43Michael Barr, every single time I'm on this, you roll the red carpet out for me in an audio way unlike anything I've ever seen. So it is truly an honor to be here. You wrote a story, Live Golf planning to sell stakes and franchises for the first time. $300 million per franchise? Up to$300 million valuation. So the stakes exactly is to be determined. You could have private equity. You could have some more sovereign wealth funds. You could have individuals. You could have family offices. It'll be interesting to see where that nets out. But$300 million is what I've been told. Has this been a part of the strategy since day one?

2:21Do you know, Randall? Have they always thought, let's sell stakes in the teams differently, like separately? I think that it was probably an end goal because of the fact that you look at what franchise valuations are doing just across sports, even away from golf. And this is sort of unfamiliar to golf as well in the last couple of years between this and tomorrow sports, of course. But WNBA franchises, MLB, MLS, NHL franchises, all of these franchises, for the most part, are rising. And if you're not, you're going to have to look at yourself in the mirror and have some tough conversations. So I think Liv Golf is looking at that and saying, hey, let's see what we can get on the market.

2:57Is Liv profitable? Not yet. Not yet. With that in mind, and look at that, Liv is calling me now. I'll call them back. You asked if they're profitable. Not yet. And look, this is to be expected because of the fact that Liv started some years ago. And what business do you know that turns around and immediately is like, oh, we have$500 million in sales. So I think right now where they're at is still building. And it should be the expectation. That should be the expectation in large part because although Saudi money is coming from this, again, it's going to take some time to turn around and pick up steam.

3:30And they only have five events in the U.S., I believe. So with that in mind, I think that it's going to take some time. But they are generating cash flow. They are generating revenue now, yeah? Yes. I don't know the specific numbers, but they do have some money. OK. But the thing now is that they're trying to do it under star golfers. And just recently, Brooks Koepka said, hey, I'm going to go back to the PGA. So that seems to be a problem for Liv. In some way. I think if you think of golf, you think of the PGA Tour just because they've been successful. They're the oldest. They have had the most popular golfers historically.

4:05And so when Liv came in offering these boatloads of cash, there was a lot of golfers who were like, look, this seems like a fun opportunity. I get to travel the world. I get to explore these opportunities. And now some of these golfers who have traveled the world, who have done this new format, they're looking back and like, you know, this isn't for me anymore. And so, you know, the PGA Tour and look, transparently, there is a war of words going on between Live Golf and the PGA Tour. And the PGA Tour has been very, very aggressive. And they're offering people to come back. So there are people who are experimenting with live and then going back and being like, you know, live isn't for me.

4:37At the same time, live is also signing a lot of new golfers where the people that are established and some newer golfers as well that are going into the used to go into the PGA Tour are now turning around and saying, you know what? I want to go on a world tour. And so they choose live golf. And so you'll read the headlines that say, hey, this person is leaving live golf. This person is leaving Live Golf. But, you know, the bigger headlines about the people that are choosing Live Golf aren't covered as much. I think that it is a problem. But I think that if the Live Golfers perform well, then it won't be.

5:11I think that's interesting because it brings up this conversation that's really, you know, interesting to me is have they done what they set out to do? I think yes in some aspect because of the fact that the business is still growing I think that again when you're at this startup stage and they're not exactly the way that I would define a startup but from a golf perspective whenever you have a billion dollars to have a startup I don't know but when you're at the startup stage and you're new and you're trying to bring people to market both you know from a consumer perspective on a tv screen and then from an event perspective You have to have the names.

5:48You have to have something that brings people together. And I think that from that perspective, it still exists. It's still happening. They're still growing. They're still announcing things. They still have partnerships. They just announced Rolex yesterday. So there are brands that want to align themselves with Live Golf. It's just a longevity thing. How long can they survive? What happens if more golfers leave and head back to the PGA Tour? That remains to be seen. Well, I think, you know, Vanessa brings up a really, really good point. Your response is spot on. You know, did they accomplish what they set out to do?

6:17What was the goal of Live Golf? Was it to make money? Was it to earn a profit? Let's go back. Let's go back. Originally, I think it's three years ago now, there was this merger that was supposed to happen. And now nobody knows what's happening. You hear golfers saying, you know, I don't think it's ever going to happen. You hear Live Golfers who are saying, you know, whatever. I don't know. And no one in the golf world knows if the PGA Tour and Live Golf are ever going to complete this merger. whatever terms that they agreed to, whether it be an investment, whether it be, you know, the PGA Tour picking up some live golf events, no one knows what is going to happen because we're three years in running.

6:52And can you imagine an NFL team sale that was happening that was three years on the market? Like the closest thing that I can even think about was either the Pat Bowen Broncos that sold and the Dan Snyder Commanders. But both of those issues were completely separate. You had an estate issue and then Lord knows all the things that was happening with the commanders. This is literally just an agreement that they can't agree to. It felt like they had a handshake agreement and then things changed. And now they're back to the drawing board. Does this, though, almost negate that? Like, does it almost say, yeah, we're not even looking at that anymore because now we're looking for outside money?

7:27Everyone you ask says something different. If you ask different people around golf, people will say, like, we're not interested in a partnership at all. And then you have some people that are saying, you know, these talks are continuing. So truthfully, I don't know if there is ever going to be something that's going to happen and to truly unite the golf world, as fans would say. Has it been shattered, the golf world in general, ever since Liv came on the scene? I would say so. I think that golf needed some advancement and Liv pushed the PGA Tour to get to where they're at right now. You have the PGA Tour Enterprises, you have Brian Rollap doing a bunch of different things.

8:02Liv Golf, I would say, is directly or indirectly responsible for the advancements of the PGA Tour. The PGA Tour was not in peril before Live Golf arrived. That's a fact. And then you have Tomorrow Sports, which has a bunch of other things that are coming from their league. So golf needed some innovation. And I think Live Golf is starting that. Now, on the opposite end of that, you do have an old guard of golfers and people who have been in the PGA Tour system, who really enjoy that style of golf, that are like, OK, you pushed us far enough. Now you can go away. And I think that's what we're seeing with Live Golf is that they're being pushed away because people are like, all right, you accomplished your goal.

8:40Now get the hell out of here. So that is the interesting goal that I was talking about. And it's like their goal was let's make golf more fun. Let's bring in a new audience. Vanessa, whose goal? Their goal. You keep saying their. And I have to jump in here and tell you the answer is who owns Live? It's the Public Investment Fund of Saudi Arabia. And yes, it's the Saudi government. Right. So from their perspective, did live achieve their national goals, their goals? You know, that is a question not for me to answer here, but that's the question that you're asking, really. Right. And think about Saudi Arabia and the advancements, their people, their economy, their culture.

9:15If you've been to Riyadh lately, I mean, you don't have to wear burqas. I mean, there's so much that has happened to that country and a lot of it. I'm not going to tie it back to obviously live, but it definitely put the Saudi Arabian sports market on the map. And so from that perspective, maybe that was their goal all along. So I'd say with that in mind, look at what's happening with boxing and MMA. A lot of the boxing events have gone to Saudi Arabia. And it has changed boxing. We just had Eddie Hearn in here. We had Dana White in here not too long ago on Bloomberg TV. And both of them have said, Turkey Al-Shayyik is transformative because of the money that he can provide to these things.

9:56Now, that same money is being distributed with Live Golf as well. But golf is a different world. Boxing and the boxing language and the golf language are two completely different things. And you think about the entities that exist in these worlds. There are dozens of boxing entities. There is the PGA Tour and the PGA Tour is the superpower. So does Live Golf have superpowers? Absolutely. But it's the new superhero on the block. And with that in mind, the old superhero and the new superhero are not getting along. They're not seeing eye to eye. We thought this was going to be a dynamic duo. and now it looks like they're fighting.

10:28I'm surprised Liv changed their tournament format because it used to be just 54 holes, three rounds. Then they went to four rounds, 72 holes. Why? They would like to qualify for the world golf rankings so that their golfers can now golf in the four majors. It's as simple as that. The interesting thing about this story and about them selling the stakes is that it's at$300 million, which we had noted earlier, but they want to be at a billion. Did they have a set time frame that they wanted their teams to be at a billion? Were they happy about this current$300 million valuation? Well, we'll both laugh when we say this because everybody does have a valuation aspiration.

11:08And the phrase that I've heard is long-term aspiration. Now, what is long-term? Depends on who you ask. I think that$200 million to$300 million in five years is great. If you compare that to other sports leagues, franchises, it's lower than some of the NFL, NBA, MLB, NHL, MLS. But it's on par with WNBA. And WNBA has existed for 30 years. I'm sure that this is on par with NWSL franchises, or at least some of them, in five years' time. So I think that it's good if you ask me. Now, if you ask some bankers, you ask some lawyers, they might tell you something different. They might tell them, no, they're ahead of schedule.

11:45They might tell them they're behind the schedule. Now, a billion-dollar valuation is a long road to go because we've already noted in the conversation revenue, profitability, all of these things I think investors are going to want to keep in mind heading towards the future. And what's their current biggest driver of revenue? I'll have to ask them. I would have to guess off the top of my head. You have to think about the same way that other leagues work, media deals, global sponsorships, attendance, all of those things I think are driving. And they do have some great, great sponsors. I think they have multiple TV deals.

12:19I've mentioned Rolex. I can't remember them all off the top of my head. But more than enough to be like, wow, this is legitimate. Rolex doesn't partner with just anybody. Always grateful for our friend, Bloomberg U.S. Sports business reporter, Randall Williams, for dropping by. He is so loud. Up next, we hear from the chief commercial officer of Tennis Australia, Cedric Cornelius. I'm Michael Barr with Vanessa Perdomo and Damian Sassauer. You are listening to the Bloomberg Business of Sports from Bloomberg Radio around the world.

13:13to hear from the smartest names on Wall Street. Just head to YouTube and search Bloomberg Podcasts today. This is Bloomberg Business of Sports from Bloomberg Radio. This is the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr. I'm Damian Sassauer. And I'm Vanessa Perdomo. The Australian Open is wrapping up this weekend, and Vanessa got a chance to talk with one of the executives behind the scenes. one of those executives that helps to put the tournament together. Yes, I got a chance to speak with Cedric Cornelius. He's Chief Commercial Officer of Tennis Australia.

13:54And you guys weren't able to join me on this because of the time difference. I was speaking to him in the future. It was the next day for him. It was the end of our day. But it was really cool. So when you're listening to the interview, just also picture that you're not in the frozen tundra of New York or anywhere on the East Coast. and you're in Melbourne, Australia right now. In the future, what? Did you like get a DeLorean? What's happening? If only, because I would go to the summer for us, but it is the summer for them right now. You know, we spoke about how this tournament kicks off the entire calendar for tennis and how they really, you know, innovate this tournament that's been around for over a hundred years.

14:32So let's take a listen to a portion of my one-on-one conversation with Tennis Australia Chief Commercial Officer, Cedric Cornelius. How would you describe the 2026 Australian Open? How would you categorize it? Well, it's been going great. Thank you for having me. The Australian Open has been going really, really strongly. We've had record crowds up to today and beautiful weather. So the vibes are really good here. And how would I characterize it? I think the best way to characterize the Australian Open is the nickname it's received in the public. It's called the Happy Slam. And one of the reasons why it's called the Happy Slam is because we built this enormous festival on top of the tennis.

15:17And so the tennis is great. And tennis fans love watching the tennis that we offer. But there's so much more to do. There's really something for everyone at the Australian Open with the festival that we build for kids, with music, with food, with now we've added beauty, gaming. And so we built this huge entertainment park, actually, that resonates with a lot of fans. And so we are now tracking to beating our record from last year. Last year, we had 1.2 million fans through the gates. And we're on track to beat that. So exciting times. That's really amazing. And it's interesting, and it brings me to the point of, you know, obviously the Australian Open has this really long legacy.

16:04It's been around for over 120 years, right? But when you have a tournament that's so long and everlasting, how do you innovate that while also towing this line of the history and the legacy of it all? Yeah, well, for us, it's really been at the core of everything we do, innovation. We're constantly trying to do things better. we force ourselves to start from scratch as well. We want to change a majority of what's available at the Australian Open every year. And so the main thing that we do is really, really listen to fans. We listen to fans' feedback. We watch how they interact with our content.

16:43And every year we try to fine tune, but also we try to be one step ahead and think about what the next generation of fans will want to have. And so some of the last examples in the recent years is we've seen that some of the fans wanted to interact with tennis differently. They didn't want to sit in a seat and watch two hours of tennis on the go. And so we've put a bar on one of the courts. And so now we have a court side bar where people can listen to a DJ, have a drink while at the same time watching the tennis. We've activated an alternative entertainment zone last year called Top Court Where we have music, pickleball, gaming And where we're hosting Shake Shack this year Shake Shack is not available in Australia But it is available at the Australian Open So we constantly try to understand what would resonate with fans And how can we do better Pickleball?

17:40That's interesting I mean, are you guys the only ones in tennis embracing this sport of pickleball? Yeah, we are. Look, we're embracing all alternative formats of the game. We're investing heavily in paddle. We are participating in pickleball. We'll have a pickleball slam at the Australian Open, actually. So we think they are great additions to the game. They bring new fans to our events, but they also bring new players to our tennis clubs. And so we think that there's a real way to build on that innovation, build on that growth, attract new audiences and really, really share the great content that we have.

18:24I think that's really interesting. And I think it's interesting that you're using it in that way, right, to grow and build new audiences. Tell me more about how that coincides with the entertainment aspect of it all and what you guys have built in that space over the last few years, like you were saying. Do they coincide? Is it because of the audience that enjoys these alternative forms, these quicker forms of content and the new audience that really wanted those sorts of things available at the tournament, do you think? Yeah, absolutely. Look, we have two big mantras. One is creating, leading an innovative fan and partner experiences.

19:07So we're constantly thinking about our partners and our fans. What's new? How do we lead? And we're also trying to deliver the most watched and digitally consumed event. Those are really the two big mantras. And so when we think about innovation, anything that can grow our reach, enhance the experiences of our fans, be it fans that are coming to the event on the ground or fans that are watching off-site. We're constantly finding new ways to engage them. And so this could be through new assets on-site. I've talked about Topcourt. I've talked about building a bar on-court. This year, we have a three-story beauty bar.

19:49So we're thinking about those on-site activations, But we're also thinking about the off-site fan and what's new that they can engage with. How can we increase the engagement of existing fans or how can we reach new audiences? This year, for example, we've launched the one-point slam. It has gone viral. It's something we tested last year on a small scale. And we did realize that on a one-point format, pros, even the best pros, can choke. And amateurs have a chance of winning a point against a pro. And finding that out and finding how entertaining that was, we realized it could be a lever to get new fans interested in tennis because it's a completely new format.

20:30Last year, in terms of innovating the content for off-site fans, last year we put a coach's pod on the court. So instead of having the coaches in the stands, they're now on the court. And so we have this now very intimate moment that we can share with the fans, between a coach and a player on the court, which gave us some memorable footage last year when Andy Murray was coaching Novak Djokovic. And that created two legends on the court talking to each other. So it's all about really trying to find new content, new assets, both on-site and off-site, that will resonate with fans. Super interesting.

21:11Sounds like you guys are really leading the way when it comes to trying new things and innovating. We're speaking with Cedric Cornelius, Chief Commercial Officer at Tennis Australia. You know, one of the things, Cedric, when I talk to leaders and executives of teams, governing bodies, what have you, is, you know, trying to get new fans is oftentimes about creating more awareness. But as the Australian Open, I mean, you're one of the biggest tournaments, one of the biggest sporting events really in the world and on the entire sports calendar annually. So what are the things that you look to to grow business, to grow revenue?

21:44Because I could imagine awareness isn't really the problem for you guys. Awareness is strong, obviously, but there's always ways to reach new fans and to grow our reach. And here we work really hand in hand with our partners, both our broadcast partners and our brand partners. With our broadcast partners, we work very hard with them to grow the coverage, but also to have them show the Australian Open is broadcasted in every single country in the world. And so we can work hard with our broadcast and say, can you display what festival we're building on top of the tennis? Can you show that amazing festival to the world and show how much that is part of our brand?

22:26With our brand partners, we also work with them on leveraging their reach and their networks. And so when our brand partners are global brands and they talk about us, they associate with us around the world through their networks, that really grows engagement. We have some of our brand partners, for example, organize amateur tennis events in specific regions in the world with the AO brand associated with it. And that really creates an additional lever of reach for us. Really interesting. And when we're talking about broadcasting, you know, a lot's been made online recently about the fact that ESPN decided to move some of the Australian Open matches behind an extra paywall called ESPN+.

23:10Are you worried about that at all? You know, about this affecting viewership, about overall eyes and engagement from the U.S. audience? We are constantly working with all of our broadcasters. Absolutely. The viewership and the availability of the content is really essential to us. So we're always trying with our broadcasters to try to reach as many audiences as possible. The alternative way we do that as well is we also work very hard on our own channels. We've significantly accelerated our social media content in the past years. We've added additional feeds. We've added new content that we manage through our own channels, like the Blue Zone, where we try to show every single key moment of every day through our own channels, our app, our social channels.

23:59And so there's a real focus on making sure that we grow our content and that content gets to more audiences. Lastly, as we wrap up here, Cedric, what excites you right now about the business of tennis, about the future of tennis? What is the most exciting thing for you right now? It's the same thing as what excites our fans. We are constantly wondering about what's next. We are already on sale for Australian Open 2027, and we're already looking at what's new for Australian Open 2027, but we're also already looking at 2028. And so while we deliver an amazing AO26 with all its innovations, we've gone to two-story bars, we've gone to three-story beauty bars, we've built a high line that walks around the various outside courts for fans to see the game in a different way.

24:51Our fans are wondering what will the Australian Open bring next year and we're working on that and that's the most exciting bit for us. That was my conversation with Cedric Cornelius, Chief Commercial Officer of Tennis Australia. Up next we speak with Amy Trask, analyst for CBS Sports, author of You Negotiate Like a Girl, and former CEO of the Oakland Raiders to talk a little football. That is straight ahead on the Bloomberg Business of Sports. For Damian Sassauer and Vanessa Perdomo, I'm Michael Barr. You are listening to the Bloomberg Business of Sports, Bloomberg Radio around the world.

25:28This is Bloomberg Business of Sports from Bloomberg Radio. Thanks for joining us on the Bloomberg Business of Sports, where we explore the big money issues in the world of sports. I'm Michael Barr. I'm Damian Salsauer. And I'm Vanessa Bromo. The big game, codenamed Super Bowl, is next weekend between the New England Patriots and Seattle Seahawks. But before we get there, we have got a ton of NFL headlines to break down. That's right, Michael Barr. We're not going to quiz Amy on the Super Bowl alone, though. We're going to ask her about what on earth happened with the Hall of Fame voting around Bill Belichick.

26:00We're going to ask her about the Jets. We're going to ask her about, my goodness, Mike Vrabel, Sam Darnold, and the rest. I mean, I'm looking forward to it here. Joining us now to discuss all things NFL is Amy Trask. She's an analyst for CBS Sports, author of You Negotiate Like a Girl, and former CEO of the then Oakland Raiders. Amy, welcome back to the Bloomberg Business of Sports. So you know what the initial question is going to be. You've got the Patriots. You've got the Seahawks. Who's going to win it? Because I've got to win some money. and you know what my answer is going to be to that question i don't know um it is going to be a good good good matchup between two well-coached good teams and the answer is i don't know who will win and i think that's the fun part there's no clear-cut winner in my view amy well speaking of the patriots news just came out that bill belichick is not a first round hall of fame ballot.