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LIV Golf, PGA Tour Merge

About a year ago, the sovereign wealth fund of the Saudi royal family expended vast amounts of money in order to establish the LIV Golf Tour as a rival to the PGA Tour (and the DP World Tour, also known as the PGA European Tour). LIV poached several of the PGA's best golfers, as well as a whole bunch of fellows whose better days were behind them, and tried to make a go of it. We wrote a couple of items about it at the time.

It did not take terribly long for the dispute to break down, effectively, along political lines. That is to say, the LIV golfers—and nearly all of that tour's big stars are outspoken Donald Trump supporters—said that they were enjoying the benefits of capitalism and free enterprise, and that the crimes of Saudi Arabia were no worse than those of many dozen other nations. The PGA golfers took, to a greater or lesser extent, a more politically liberal point of view, arguing that Saudi Arabia is indeed one of the worst regimes in the world, and that no amount of money is worth being a part of "sportswashing" that fact. PGA Commissioner Jay Monahan, who had a vested interest in tearing down the LIV Tour, was particularly vocal about the evils of the Saudi regime.

It would seem that Monahan... didn't mean it? Yesterday, in a surprise development that shocked the sporting world, the PGA and LIV announced they would be merging. The secret was well-enough kept that not even the golfers knew this was coming. Exactly why Monahan agreed to this course of action is not yet clear, and may never be. It could be that the PGA's lawyers were worried about losing the various antitrust lawsuits filed by LIV. It could be that the split between the tours wrecked the PGA's bottom line. It could be that the Saudis' money turns out to be green and very spendable. Whatever the case may be, the war between tours is over. "I recognize that people are going to call me a hypocrite," Monahan said after announcing the news. He's certainly right about that.

Neither one of us cares for golf, so we don't care about the sporting implications of this move. And that's not what this site is about, anyhow. We are very interested, on the other hand, in the political and geopolitical implications, even if that's a story that's still unfolding and is still shrouded in some amount of mystery.

Let's start by talking about what is clear. When the Saudis announced their new tour, the general understanding was that their best-case scenario was LIV Golf becoming a secondary, gimmicky alternative to PGA Golf, like the XFL is to the NFL, or the BIG3 league is to the NBA. In truth, it would seem that the plan all along was to force a merger, as happened with the ABA and NBA in basketball, or the AFL and the NFL in football, or the American League and the National League in baseball. Clearly, mission accomplished.

More broadly, it's also clear that the Saudis are trying to insinuate themselves into American culture and politics. They will now have substantial control, as majority investor, over one of the country's more significant sports leagues. Professional golf isn't as significant as the "Big Four" (NBA, NHL, MLB, NFL), but it's in the next tier along with professional tennis, NASCAR, Major League Soccer and a few others.

Of course, the Saudis have also insinuated themselves into American culture and politics by buying favor with at least one prominent political family. Donald Trump has a close relationship with the royals, and yesterday declared that the merger is a "beautiful, glamorous deal." Exactly how close the relationship between Trump and the Saudis is will remain an open question for a while, but maybe one day the full truth will be known. Certainly the former president's son-in-law, Jared Kushner, is now a fully owned subsidiary of the Saudi royal family.

Those are the things that are clear, or relatively so. The most important thing that is unclear is why the Saudis are working so hard, and spending so much money, to buy themselves a chair at the American table. The widely accepted thesis, at the time that LIV Golf was first established, was that the Saudi regime was trying to deflect attention from its human rights abuses. This is what "sportswashing" refers to.

We never really found this thesis to be compelling. The Saudi royal family is indeed autocratic and is indeed guilty of serious human rights abuses. And what has been their punishment for this? Western nations have lined up around the block to suck at the black gold teat, and to sell weapons to the Saudis. What is the point in sportswashing under those circumstances?

Our best guess is that the Saudis are thinking long-term and, like the Kochs, see that fossil fuels are headed to extinction (no pun intended). The end cannot be avoided, but it can be delayed, especially with skilled lobbying. (Senator Manchin? The sheik will see you now.) The greater the extent to which the Saudis have permeated American culture, particularly through an entity that appeals primarily to conservative, affluent, older people, the easier it will be to steer things in a favorable direction.

Alternatively, the Saudis may be running a variant of the Vlad Putin playbook, and may be trying to sow the seeds of dissent in American society. They are backing the Trumps and, as we've noted, LIV vs. PGA took on "culture wars" overtones. It's hard to envision how a merger would serve this agenda, if this is what the Saudis are going for, but they are pretty shrewd and they have a lot of money to throw around. So, you never know.

Whatever is going on, this story is worth keeping an eye on, since we just don't believe that the only goal of the Saudi sovereign wealth fund is to increase the royal family's wealth. (Z)

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