As drama swirls around the PGA and the new LIV Golf Tournament, ESPN’s Kevin Van Valkenburg joins from London to get Bryan Curtis caught up to speed on all the action. They discuss how the LIV Golf Tournament came to be, why this story matters, why the PGA is facing an “existential threat,” and why LIV Golf is financed by the sovereign wealth fund of Saudi Arabia.
In the following excerpt, Curtis asks Van Valkenburg to frame the threat that LIV poses to the PGA.
Bryan Curtis: You called LIV on ESPN, a serious threat to the PGA Tour. How serious do you think it is?
Kevin Van Valkenburg: Well, if you think about: If every week, the best 50 players in the world were not playing on the PGA Tour and every week was essentially the Sanderson Farms or the 3M or the John Deere, how valuable would that product be as a television product? It would probably be pretty difficult, right? Some of the most watched tournaments of the year are the ones where all the good players are there. The Genesis, that’s held at Riviera Country Club in L.A., and that’s because all the best players are there. The Memorial, almost all the players are there. If you turn the Memorial and the Genesis into what are the minor league tournaments now, I don’t know how the product survives in a lot of ways, right? Because if things that are getting a 2.1 rating now are getting a 0.8 rating, man, what commercial sort of venture—what companies want to broadcast on that?
And so I think the PGA Tour is facing an enormous existential threat right now. And I don’t know how I would advise Jay Monahan to fix it. His letter sort of essentially saying, “Well, everyone who left just did it for money, money, money. We’re more than that.” I don’t know that’s the right argument to make, because if I’m Justin Thomas or Rory McIlroy, I would love—Rory McIlroy is one of my favorite athletes and he has been outspoken about this, saying, “Morality matters more than money. How much more can this possibly—how much more money can you possibly need?” I don’t know that argument is going to play with people who are not Rory McIlroy, because eventually $200 million sounds like a lot. Tiger only made $121 million in his entire PGA career. Dustin Johnson, Phil Mickelson, just got way more than that in one day. More factually would say, by agreeing to play the entire couple years, that’s why they got so much money.
Curtis: Sure. I mean, you say the top 50, but what’s interesting is what amount, what percentage of the top 50 would have to defect before somebody flips on even a big tournament and says, “I don’t feel like the best players in the world are here, or most of the best players in the world”?
Van Valkenburg: Yeah. Golf has always been in sort of a weird spot because the main thing that we have every week in our lives has always been the PGA Tour. But the PGA Tour doesn’t control any of the Majors, which are the only thing that really matter historically and the only reason why we really watch. Nobody cares that much about how many regular-season tournaments you won. I bet most people couldn’t tell you how many regular-season tournaments Jack Nicklaus won, but they could tell you in a second that he won 18 Majors. And so if the Majors sort of continue with their belief of like, “Yeah, you know what, this is a you problem, not an us problem. We don’t need to worry anything about this,” then I’m not sure what the future is of the tour. How do they sort of make themselves more attractive?
And I tweeted a long thread about this, but the PGA Tour, when it was established, was a for-profit entity, and Deane Beman, who’s the second commissioner, came along and transitioned it into a nonprofit. And he did that because he realized—as his background was in insurance, because back then professional golfers didn’t just have golf jobs, they had to have other jobs too—that the tour could pay a lot less taxes if they were a 501(c)(6). OK, so, that was a genius move for 40 years of the tour’s history because their tax burden was way reduced. Anyone who sponsored a tournament like Farmers or Genesis or whoever could take a huge write-off by saying, “I’m going to put $20 million up to sponsor this tournament and I’m decreasing my tax burden by $20 million.”
Well, there are laws that say what a nonprofit can and can’t do with its money. So the PGA Tour found themselves a little bit hamstrung when it came to just handing over money for the top players, as based off of what are essentially appearance fees. LIV was sitting here saying, “Hey, we’ll give you $10 million to show up.” And the PGA Tour was saying, “We’ll give you a million based on a player impact program that’s partially determined by how many Google hits you get,” because that was how they had to sort of legally frame it. And then LIV was saying, “You know what, we’ll do 50 million,” and the PGA Tour just—how do you respond to an organization that has so much money that legitimately losing $2 billion or never turning a profit on that is a blink of the eye to them, is almost a rounding error? And that’s why this is such a huge kind of potential fracturing for the future of professional golf in America, at least.
Host: Bryan Curtis
Producer: Troy Farkas