Phil Mickelson Finally Lays Out LIV Golf's Business Model, Claims Saudis Aren't Simply Lighting Millions On Fire
The biggest question about LIV Golf is the same today as it was in the many months leading up to its inaugural event in 2022: How, if ever, will the circuit actually turn a profit? The follow-up question to that is are the Saudis who are solely funding LIV even care about making a profit?
Phil Mickelson, one of the 'founding fathers' of LIV, provided an answer to both of those questions, sort of, during his recent appearance on 'The Pat McAfee Show' by going into detail about what LIV's business model is.
The Saudi Public Investment Fund (PIF) has paid hundreds of millions of dollars to lure the likes of Jon Rahm, Brooks Koepka, Cam Smith, Dustin Johnson, Mickelson, and others away from the PGA Tour. While the PIF is valued at around $700 billion, handing out hundreds of millions and spending millions more on LIV operations while ticket sales are seemingly non-existent and events are being broadcast on the CW Network isn't exactly a sustainable business plan.
Phil Mickelson has done his best to explain LIV Golf's business model. (Photo by Eakin Howard/Getty Images)
While that is exactly what appears to have been the case during LIV's first two seasons, Mickelson claims the business model has somewhat flipped and the league is being paid tens of millions to play tournaments in certain countries.
"When we have the ability to control the product and LIV knows what they are selling, and you know what you're buying as a sponsor, we are now integrating golf on a global scale and we're going to different countries and utilizing tourism budgets to get us there," Mickelson explained.
"The reason we're going to Hong Kong is that they are paying an exorbitant amount of money to bring professional golf of the highest level there. They're using their tourism budget to do that. We were not supposed to go back to Singapore this year, and then the tourism board in Singapore gets involved."
"And I'm talking tens of millions of dollars, not just a million or two. So yeah, when we started out with LIV we had to pay for sites because it was controversial and there were threats against us, but now these countries are using tourism dollars to get us to go there because of the impact we're having on their economy."
Tourism Money Funding Bulk Of LIV Golf Events
It has been rumored that Rahm joined LIV Golf on a deal worth $600 million with the likes of Mickelson, Koepka, Johnson, and others being paid north of $100 million each to join the circuit.
Tourism board funding certainly isn't covering those checks, but Mickelson did claim they're paying more than enough to "cover the entire purse" for events, which is saying something given the team championship purse alone in 2023 was $50 million.
Mickelson, who also explained he's not in on merger conversations involving the PGA Tour and Saudi PIF, will begin his 2024 campaign in Mexico on February 2 in LIV's first event of the season.
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