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As long as we're on the subject of sports, Donald Trump and corruption, let's also deal with something we've been meaning to get to for a couple of weeks: The decline and fall of LIV Golf.
When LIV was first formed, with the Saudis lavishing hundreds of millions of dollars on the venture, it made very little sense to us. The usual explanation was "sportswashing"—that is, that the Saudis were trying to buy some positive PR by supporting an activity that does not involve, you know, the brutal murder of journalists who make the royal family cranky.
This never, ever made sense to us. First of all, the Saudis have a pretty well-established, and pretty bad, reputation. It's hard to imagine that could be changed in anything less than several decades (if at all). And even if the Saudis think it's possible, a golf tour seems a particularly poor investment. Golf is a niche sport, and even a successful event only reaches a fraction of the American public. For example, the most-watched round of the most-watched tournament this year (final round of the Masters) attracted about 14 million viewers, or about 1 American in 24. And there was no chance LIV would get within a country mile of that (and, in fact, it never has). Reaching something like 1 American in 200, at a price tag of $200 million+/year, is a spectacularly bad investment. It would make far more sense to buy an arena sponsorship, or a college bowl game sponsorship, or to purchase ad space on an NBA uniform, or an MLS shirt, or maybe on a dozen MLB outfield walls.
A few weeks ago, the Saudis suddenly announced that they were done with LIV Golf, and that not only did they not intend to fund any future seasons, they might yank their money for the rest of the current season. One event has already been "postponed," and the four other events on the calendar are in doubt. This sudden loss of interest also makes little sense from a sportswashing perspective. Why would the Saudis give up this project so suddenly, and three-quarters of the way through the season? Why not at least run out the string, and then take the offseason to evaluate?
But now, let us put the facts together in a different way. To start, let us recall that the Saudis hired Jared Kushner to manage $2 billion in assets for the royal family. Despite the fact that Kushner has no track record as a successful asset manager, he and his firm are being paid $25 million annually for their services. The usual rate for this amount of money is somewhere between $2 million and $10 million annually.
Meanwhile, there has also been much business conducted between the Trump Organization and the Saudis, primarily through the Saudi firm Dar Global. What is known for certain is that the Trumps have been paid at least $38 million to license their last name. What is not clear is the extent to which the Trumps have additional financial interests in the projects that have been announced, including the $7 billion Diriyah Project (which includes a luxury hotel plus the Trump International Golf Club, Riyadh), the $2 billion Trump Tower Jeddah and the $1 billion Trump Plaza Jeddah.
Finally, LIV golf hosted seven tournaments at Trump-owned golf courses, mostly in the United States. The amount of money involved was relatively small compared to the other grifts (a few million dollars per tournament). But Trump loves all money and, more importantly, hosting LIV tournaments gave his golf courses something to brag about, since especially since the PGA basically stopped doing business with Trump.
So, what has the Kingdom of Saud gotten since Trump became president? Well, to start, the U.S. has waged a war against the Saudis' mortal enemy, namely Iran. Sure, the Saudis have taken a little damage, and have contributed a few missile volleys. However, the U.S. has expended $130 billion and counting, which is rather more than the Kushner money, the real estate projects, and all of LIV golf combined and multiplied by ten.
In addition, the Iran War has caused the world to turn to the Saudis for oil. As you can see in this chart, the Saudis profited handsomely in the first month of the war:
That increase in March equates to about $7 billion U.S. in additional sales. They also picked up about $2 billion in sales in April, relative to last April, and the good times figure to continue once numbers for May and June are in.
Of course, the Iran War is still ongoing, so the benefits outlined in the previous paragraphs figure to improve in a Saudi direction. And at least one of the reasons that the war is ongoing is that the U.S. and the Iranians can't reach agreement on what will be done with the $24 billion in Iranian funds currently frozen by the U.S. government. The Iranians want all the money. Saudi employee Kushner, by contrast, wants to redirect some sizable chunk of that to Saudi Arabia, so they can "rebuild."
Oh, and Trump has also agreed to sell $142 billion in arms to the Saudis, including a bunch of F-35 jets. This is something the three previous presidents, and in particular Joe Biden, were unwilling to do.
In short, the Saudis have realized some impressive returns on their various investments in Trump and his family.
Now, everything we have written to this point is uncontroverted fact. You can click on the links and confirm for yourself, if you wish. But let us build on this with a little bit of speculation. Note that we have no direct proof for our suspicions, and we haven't even seen anyone who connected the dots in this way. So, take this all with at least a few grains of salt. Or maybe grains of sand. But while LIV Golf never made sense as sportswashing, it makes perfect sense as, well, Trump ba**washing. And the sudden loss of interest from the Saudis also makes sense, if you look at it in this way. They have already gotten just about everything they could have hoped for; there's not much else to be gained from more LIV, at this point.
One thing worth keeping an eye on is that one of the LIV tournaments that is up in the air is LIV Golf New York, scheduled for Aug. 6-9 at Trump National Golf Club (Bedminster) in Bedminster, NJ. If that one goes forward, while all the other remaining tournaments are "postponed," that would certainly be... instructive. (Z)