LIV to Die?

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1:01Congratulations, you made the varsity podcast. My name is John Arand and I'm Puck's sports correspondent and the host of this pod. Well, Live Golf has gone through two weeks of disastrous headlines. The Saudi Private Investment Fund pulled its funding, putting the future of the golf tour very much in doubt. And that's why I reached out to Joe House and Nathan Hubbard to join the pod today. Joe and Nathan host a golf pod for the ringer called Fairway Roland, and they're close followers of the business behind golf, so I'm really glad to get them on the pod today. But before we get to House and Nathan, today is Sunday, May 3rd, and here's what I'm watching.

1:42First, yesterday was Kentucky Derby Day, and I broke some news in my private email on Thursday about a new horse racing league that Greg Maffay is launching just next year. This is kind of a big deal because of who Maffay is. He used to run Liberty Media and is one of the most plugged-in executives in all of media. Anyway, I found out that he's in the process of raising$30 million to start the league that's going to launch in 2027. He's already signed deals with several tracks and has commitments from sports team owners and leading stables to buy franchises in the league. Those franchises, they're valued at between$6 and$10 million.

2:22Not bad. The main thing left to cut is a media deal, and Maffei, the media executive, already has had a bunch of talks with networks like Fox and NBC. Now, normally, I wouldn't get too excited about someone who says they're launching a sports league. I get these types of pitches all the time. But with Maffei's backing, my ear is perked up. He certainly has a good track record. Hey, one more thing before we get to Joe and Nathan. I received a ton of feedback from a story that I wrote about the search to replace Don Garber as commissioner of Major League Soccer. Garber's been the commissioner since 1999.

2:59Well, MLS hired Korn Ferry to conduct the search, and Korn Ferry has spent the better part of two months reaching out to sports business executives to gauge their interest. And some of the names that I heard are really intriguing. There's Larry Berg, an LAFC owner. That would be a Bud Sealy type pick, owners choosing one of their own. There's also Hans Schroeder, who's the NFL's top media executive. There's Brett Eurmark, who's the Big 12's commissioner. Other names include former NASCAR commissioner Steve Phelps, former F1 executive Sean Bratches, former ABC head Ben Sherwood. In other words, lots of people with lots of media experience.

3:38It's still way too early to predict how this is all going to shake out. But believe me, I'm going to be keeping an eye on it. OK, now let's get to Joe House and Nathan Hubbard. Joe House, Nathan Hubbard. I couldn't wait to get you two on the pod this week of all weeks, because after several years, the soap opera of Live, it's nearing its death throes right now. the uh the public investment fund the saudi public investment fund has uh uh pulled their funding um and uh the future for for live um uh to say it's not bright it's a there's a big question mark so uh nathan i want to start with you and just kind of what is is there any path forward that you see right now for live to continue to exist not not as sort of a carnival show but like as a thorn in the PGA Tours side?

4:35Not as a thorn in the PGA Tours side, no. I think if you have one saving grace and you're Scott O 'Neill and you're trying to extend the life of this asset, you are having conversations with a lot of people who have allocated a lot of money to the world of sports over the last few years. And a lot of those people who have raised those funds have been sitting on the sidelines and have been boxed out because it's become highly competitive as the value of these assets has gone up. And so perhaps there is some situation in which through a series of cost cuts and a rethink thinking and a restructuring that some investor is enticed to jump in.

5:16But I think what we're seeing and hearing is that the foundational cost structure of this approach to challenging the PGA Tour was just untenable. And if it doesn't work for the endless resources of the Saudis who had some ulterior motives for spending this capital, it's largely not gonna work for financial investors. And I think that anything outside of a complete rethinking makes it very, very unlikely going forward. And the last point I'll just make is the brand damage that's happening through conversations like these, through everything that you're reading on the internet is something that, you know, historical league challengers have not had to face.

6:02And so as a going concern for this to work, it's got to have some media value. And it just feels like if you're a fan of any kind of sport, the negative connotations of this brand at this point are just going to make the challenge pretty insurmountable in my view. That's such a good way to put it. It is negative connotations to the entire brand live golf is a brand it's a is a pretty tainted brand but if you if you were to go back say three years and you were to try to create a live type of of uh tour like what did they do wrong like like what should they have done differently well joe and i both have some some thoughts on this i i think that the combative um i i think part of the golf but louder marketing seeped into a lot of the communication from the executives themselves.

7:01And I think that they created some natural resistance. They aligned themselves, for better or worse, politically with the president. And that created some resistance in some pockets of potential consumers. As Michael Jordan used to say, to invert his quote, Democrats watch golf too. And I think that had some negative ramifications. I think, look, the foundational strategy was right, which is to say the PGA Tour does not go to Australia. Man, I watched Anthony Kim win in Australia this year. It was awesome. That's a tournament that if you're Brian Rolap right now, trying to think about ways to actually grow the game, that looked to me like an effort to grow the game.

7:45But I think that the assumption was that tradition, and history and our ability to compare the careers of players who extend and expand across generations. One of the great things about golf is that there's a 19-year-old hotshot coming up right now out of Auburn. And we've also got Justin Rose and Adam Scott playing well enough that we would consider them contenders and majors. And so throwing all of the course history, the ability to compare the traditions out of the window, I think really created a product that was overly reliant on a few guys. And that was just a bet that at the end of the day, I don't think paid off.

8:31Yeah. But the problem is like that 19 year old hotshot from Auburn, he's being watched by a 66 year old guy in his Barker lounger of sorts. I thought that the way Liv came out was like, golf's too old and we're going to get younger. And off camera, Nathan, you were referencing the Phoenix Open. And that felt like a Liv-type tour event. If you go to the actual events, they feel younger. They feel hipper. Actually, I haven't been to an event, but that's the way they appeared on television. And that wasn't a bad idea, though, right, Joe, to try to appeal to the younger demo. Well, that part of it was right.

9:18The original sin was they understood message-wise they're a disruptor, and they chose to pursue a path of grievances. Grievances about how the tour underserves its consumers, underserves its players. but they never moved forward to why should anyone watch this? What is the element of this that makes it appealing to a sports fan? It was guys that we know, guys like Bryson DeChambeau, Dustin Johnson at the outset, Brooks Koepka. But the differentiating factor was they're going to play less golf in a shotgun format and they're going to be in shorts and there's going to be music and it's going to feel like a party.

10:12And I guess there's a team element that was very hard to track. That never caught on. That never resonated with the viewing public. And they never moved. They never really seriously addressed that. It's hard to root for rich guys to get richer. And at the end of the day, that was the prize that they were playing for. It wasn't the history at Riviera. It wasn't, you know, winning at Jack's place at Memorial. It was, can these rich guys win some more money? And I think for the average fan who's playing a Muni, that didn't end up being an aspirational thing. It ended up being relatively uninteresting.

10:51You know, at the outset, when Liv launched, and for the next couple of years, Liv hated the PGA Tour, the PGA Tour hated Liv. Is there still bad blood between the two? i think so um part part of what changed in the last couple years is uh the um defenestration johnny of i like that word joe replaced by scott o 'neill and as the tour the pga tour looked inward you know one of the the successes of of live was having the pga tour examine its own business model and reconsider its own leadership structure the arrival of brian rollap from the nfl brian rollap and scott o 'neill have a long professional relationship they have a friendship it's been reported that preceded either of them in the current roles that they're in and i think there were conversations occurring behind the scenes around, you know, is there a way for the two businesses to coexist?

12:02But by the time Roll App was really installed at the PGA Tour, the tour had already survived the most serious challenge from Liv. The most prominent player that jumped over from the tour to live was Jon Rahm. That happened at the end of 2023 where Roll App didn't come into the picture until 25. And during that period, the PGA Tour has enjoyed the highest ratings of the past decade with respect to its product and its innovation of having more events where its best players play, the signature events. Yeah, I would say that a lot of the tensions that existed between players, particularly when Rory was tasked with carrying the water for the tour.

12:54That was probably the height of the animosity. And there really were hard feelings between these guys who felt like, you know, the way that they made a living was being challenged. That has softened. And I think the Ryder Cup, ironically, as a format, has helped bridge, particularly on the Euro side, some of the relationships that were a bit frayed. But if you go into that headquarters in Ponte Vedra, and they've had a few layoffs and they've had some restructuring. But this was a direct assault and attack on what some of those people felt was their character and their integrity, because Mickelson was very direct as he led the charge in going after Jay Monahan and going after the intentions of a lot of the executives on the PGA Tour.

13:41Now, you don't need to cry for those folks, but I do think there is still a ton of resentment because in arrears, there's no doubt that the breakaway did not help the game. It fractured the game. It took some of the best players out of their prime. It divided a lot of people in the community. And I think as we go forward, there are some questions about the viability of the economic model that the PGA Tour has currently set up in terms of purses and prize money on a go-forward basis. They did that in response to what Liv put out there for their players. But Liv has just folded and told you that it's too much to spend.

14:26So, you know, the tour is obviously not spending as much on players. But as the purses have gone up, there's still some question about the economic viability of a$20 million purse at a tournament in the Quad Cities. And so I think that's something that still has to be addressed and that is, candidly, Brian Rolap's biggest problem to solve. Because there may be a series of conversations in the future where you're going to ask these players to put a lot more value on the equity vehicle that they've created as a part of the strategic sports group investment than actual cash earnings in service of a viable product going forward.

15:10You know, I was having a conversation last week with my Gen Z son who was asking me about whether or not the players from live are going to be welcomed back into the PGA tour. And so I asked him, I was like, name the players. And he didn't even come up with Ram. All he said was Bryson. And he didn't even I don't even thinking he knows DeChambeau. He just knows that it's Bryson. And he knows it from the YouTube clips. um so this is like a two-part question out to to both you one is who is currently at live right now that would be able to uh come over to the pga tour and then the second part of that question is is a is a pga tour going to be welcoming to them or are they going to make them go through their paces like uh like everyone else yeah i'll go first nathan um I'm not going to try and answer it in terms of what the legal elements consist of, in terms of what the tour has said in the way of pathways for returning.

16:12The tour did open a limited window at the end of January, early February, and only one player took advantage of it. Now, only four players were eligible, Brooks Koepka, Cam Smith, John Rahm, and Bryson DeChambeau. and Brooks was the only player to avail himself of the return opportunity. And so the tour has the ability to set whatever terms it wants in terms of a return. But the question of what players matter, it's not a long list of guys on that live tour. it is Bryson, one name Bryson, and John Rahm for sure, and maybe Joaquin Neiman and maybe Tyrell Hatton, although Tyrell Hatton seems like a better fit for the DP World Tour.

17:08But beyond that, maybe some of the young, Tom McKibben is a name that was sort of rising through the ranks and had a choice to come over. Some of the young guys, Michael Asasso is a young guy. Maybe there's an interest in those young guys coming over, and their pathway should be a little bit easier than the veterans who really made their bread and butter on the tour. But the interesting thing for us to kind of think through and sort out is I think there's a big difference between Bryson and Jon Rahm in terms of who wants to go back to the PGA Tour. And, you know, do those individual players think that that's in their own best interest, Nathan?

17:51Yeah, I think that's right. And I'll just pick up on the back half of your question, John, about whether they're going to be welcomed back. You know, I sort of frame it this way. Golf is a game of rules that requires integrity. It requires compliance with them, even when nobody else is looking. And if all these guys had, while on the PGA Tour, secretly been changing their scorecards and using foot wedges and all the stuff that my grandfather used to do to try to stay competitive in his old age. All the stuff that I do on the golf course, Nathan. Come on. Yeah, I mean, these guys would have been kicked off the tour and banned.

18:32And in some ways, they violated similar rules that were very clear and very set out for what you have to do to be able to play in this competition of this magnitude for other people's money and where you're trying to make a living. And so when you sort of frame it in terms of those rules violations, you've got to take it seriously. That said, Brian Rollap is a pragmatic, dispassionate in the best way leader, which is to say he's not going to get too high. He's not going to get too low. And what he did with Brooks Koepka and Patrick Reed is, I think, the sort of assassin mentality, which is you've got to kill shot.

19:14You take it. And to House's point, I think there are three to six players that Brian Rollat feels will allow him to go back to the market and definitively declare that all the best players in the world are playing on the PGA Tour. He's got his own set of challenges to create a schedule in 2027 and beyond that the media rights go up as a result and that viewership continues to rise. That's the PGA Tour's own set of issues. They don't play in major markets in most weeks. There's a lot more that can be done there. But it starts with that foundational proposition that the best players in the world are all playing together.

19:57And so I think Brian will establish a different set of rules as he did earlier in the year for the players that, quote unquote, matter to him being able to deliver that proposition to fans and to the media. I mean, three to six players are the first question that we had about the future of Liv and if they're going to attract any investment. Like, who's going to invest in three to six players? I've been talking – I covered the sports media space, of course, and I talked to TV executives. And when Liv started, they were really worried because they were peeling off some of the big stars. But years in, now that the stars are coming back, the word from TV executives is that they disappeared for three or four years.

20:42The PGA has sort of almost created other stars. And so like the ones that went over to Liv, it's almost like they got injured or they retired early or something along those lines. Well, that's what it feels like to a lot of fans. And I think the timing of this breakaway league actually matters. I mean, if you're trying to create a competitive league to the WNBA right now and you sign Caitlin Clark, you might have legs. If you had created Liv back in the day and signed Tiger, you probably would have had success. But the post-Tiger PGA Tour that a lot of people claimed was boring at the outset and that was less interesting because we still had the remnants of that Tiger needle in our arm as a fan base of the sport, you know, actually proved to be more resilient than I think we thought because it wasn't single star dependent.

21:32and you had this group of guys who all came up as disciples of Tiger, but they had more reps because junior golf had developed and given a lot more intense competitive reps to guys. They had technology both in terms of the clubs and the equipment, but also the video and training technology and all the TrackMan data to help them get better younger. And so you had this whole wave of guys who were highly competitive and at least statistically performing. performing, if you look at Scottie's last couple of years from a shots gain standpoint, performing on par with some of those great Tiger years. But it didn't rely on one guy.

22:12And I think that made it more about the product for the PGA Tour than any one single individual, none of whom had achieved the status remotely close to Tiger. Yeah, and Johnny, just to pick up, that also was part of the original blunder. This startup was so eager to jump into the marketplace and declare victory with the guys that they signed up. And they were so eager to get events launched and demonstrate proof of concept that they could actually have events. They did not arrive with a TV partner. And it was highly awkward in that first year that the partner they ended up with was the CW, which was not the kind of splash you want to make.

22:57This is, by contradistinction, exactly why the TGL, the video league that is on ESPN, who arrived in the marketplace with its TV partner in place and they explored the proof of concept together. Is there a place in the North American TV market for watching a little bit of this video golf and then watching some good college basketball? Well, the answer turns out to be yes in January and February and March. And so TGL is in the marketplace right now negotiating a renewed rights deal. But they had the patience and the sense to arrive with a reasonable TV partner and put their product in front of eyeballs.

23:44The live folks, we had to hunt for the CW. I didn't even know where CW was in my cable package, Johnny.

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24:34In this podcast, I'm going to have people on to tell unusual and sometimes far-fetched stories about their families. I've heard my whole life that she invented the margarita. And then we're going to investigate those stories and find out how much of it is true. He gets a patent one month before the Wright brothers. Oh my God. Please follow and listen to Family Lore, an Odyssey podcast available now on Apple Podcasts, Spotify, or wherever you get your shows. When Liv started, it had so many headlines and it had unlimited supply of money backing it. It seemed like it had the potential to be really formidable.

25:14And I'll answer this first for me, but when did you first realize that this wasn't going to work? and for me i'm going to go to greg norman's press conference back in 2022 when when you know he was asked about human rights abuses in saudi arabia and he he said that he didn't know if he had any gay friends and that to me uh it just showed that it was just like an unserious uh uh group that was out there that that would that was running it anyway and and and from that comment it just i I can't think of a North American sports league where, you know, they, they, they wouldn't have that talking point sort of branded into a, you know, into an executive's head.

25:55So I'll put it out to both of you at what, is there one point where you were like, where you just thought, yeah, this is not going to work. To me, it was the first event after John Rahm joined. and it took until then. I think there was some fragility until we saw. Remind me when that was, Nathan. And early 24, right, House? I mean, he left at the end of 23. And so it was, you know, Rahm at that point was a Masters winner, a U.S. Open winner, an incredible student and historian of the game, someone who had repeatedly and directly denied that he was going to go. And so when he made that jump, and I think in his mind, he believed that him going to live was going to force the completion of the merger between the PGA Tour and Live.

26:52But when he jumped, and it did not move the needle in terms of, as House pointed out, bringing in a TV partner that was more high profile, in terms of ratings, in terms of conversation, not about the fact that he was going, but about the actual competition. When that needle did not move, suddenly all of the leverage swung in favor of the PGA Tour because it meant that the stars weren't making a difference. And that coincided with purses being increased, which stemmed the flow of guys. You had Scottie come out and Jordan come out and Justin Thomas come out and Rory, obviously, definitively say they were not going to leave.

27:32Now, you didn't always trust that because of what happened with Rom. But when Rahm didn't move the needle, it said, wow, the PGA Tour doesn't have to merge with Liv. And since the inception of this league, we had thought, well, they got to get together. The only way we can get all these players back together, because the Saudis have just unending money, they're going to wait until Yasser has a green jacket and is a member at Augustus. He demanded as a part of these negotiations. If that's not moving, wait a minute, maybe they don't have to come together. and maybe there is an ability to ride out this wave and wait and see what happens.

28:10And when the PGA Tours ratings started to tick up in 24, after that Rory McIlroy win at the Masters, the first one, so much interest in the sport, ratings up 30-plus percent on a year-over-year basis, even for tournaments that you'd think nobody would care about, like this last week's Zurich Classic in New Orleans, for example. That was the moment when you said, wait a minute this thing is not going to get off the ground is it yeah and i guess for me i was uh skeptical as soon as the two parties um started missing their their self um appointed deadlines in terms of of the merger um as time went on the scales tipped further and further in the direction of the PGA Tour as the holder of the leverage in that negotiation.

29:02And it seems like in those early days, the negotiation got stuck on what would become of the teams that were such an elemental part of the live concept. And it became, as time went on, it didn't help live that it never really gained traction. They couldn't generate their own leverage in that negotiation. The leverage was, as Nathan just described, infinite amount of money. Well, it turns out that that infinite amount of money is instead finite. And we have run out of it because here we are now talking about the death throes of this league, Johnny. I want to get into Liv's legacy for a little bit because I actually think the legacy of Liv, if you're a golf fan in the U.S., is actually pretty good because it did force changes at the PGA Tour.