How The PGA LIV Golf Deal Will Impact Donald Trump Or At Least Stroke His Ego

 

The former president predicted a merger back when it seemed inconceivable. Now, with his Saudi connections, he hopes to get back in the game.

Donald Trump took to Truth Social on Tuesday morning to celebrate the “BIG, BEAUTIFUL, AND GLAMOROUS” merger between the PGA Tour and LIV Golf, a victory lap for the deal he called “inevitable” almost a year ago on the same platform.

Now the golf establishment must decide whether to welcome back the former president and the courses he owns worldwide, which were effectively blacklisted by the PGA in the wake of the January 6 insurrection and subsequently became host to several LIV events. Trump’s big bet on LIV and the Saudi Arabia Public Investment Fund (PIF), the sovereign wealth fund with some $600 billion in assets that bankrolls it, might have earned him a mulligan.

The surprise merger between the two warring golf factions will not generate any significant windfall for Trump directly, although he has maintained close ties to the Saudi government for many years. His first trip abroad as president was to Riyadh, where he secured a $110 billion arms deal, and since leaving office, PIF has committed at least $2 billion to a new fund established by Trump’s son-in-law Jared Kushner.

Depending on the future structure of the new joint venture, Trump could miss out on the $1 million or more in site fees LIV paid to each of its host tournaments at his courses—a practice now mostly eliminated by the PGA Tour. But high-profile tournaments also serve as an invaluable marketing tool for golf courses and resorts, and if the new combined PGA-LIV-DP World Tour venture is able to draw the large TV audiences that have been absent from LIV’s broadcasts on the CW Network, it could enrich the status of his clubs, regardless of politics.

“Any time a golf course is on TV, it boosts its credibility,” says Jeff Woolson, managing director of CBRE’s golf and resort group. “It can increase business dramatically.”

The PGA Tour and the PGA of America have tried to distance themselves from Trump since he became a presidential candidate in 2015, following his comments about Mexican immigrants on the campaign trail. In 2021, the PGA of America announced it was moving the PGA Championship—one of golf’s four majors—away from Trump’s Bedminster course in New Jersey, eventually resulting in a lawsuit that was settled out of court. But in LIV, Trump found a way to keep his courses in the professional golf conversation, and now he may have more opportunities to promote his properties. The merger with LIV “stops the sponsors having to pick a side as far as which horse do I want to ride,” says Joel Paige, a longtime golf course executive who operated Doral and PGA National for nearly a decade each. “The tours wouldn’t let you take both sides. Now you can play both sides if you want.”

Trump’s portfolio of golf courses and resorts generates some $200 million annually, of which professional events account for only a tiny portion. Club memberships across the country are mostly capped out after the pandemic, and negative sentiments concerning Trump’s politics have typically counterbalanced any halo effect associated with professional competition by driving corporate business away.

In May 2016, just two months after Trump National Doral hosted a PGA Tour World Golf Championship event, a top executive at the Miami club told a group of appraisers that Trump’s presidential campaign was hurting business. After he won the 2016 election, Doral lost a reported 100,000 booked room nights. In 2017 and 2018, four Trump courses—Doral, Aberdeen, Doonbeg and Turnberry—lost an estimated $450,000 in revenue.

For Trump, a return to hosting prominent events is as much about ego as profit. As president, Trump reportedly played more than 300 rounds of golf during his four years in the White House, and in the past decade he has spent some $500 million buying and renovating golf courses with the intent of hosting major events. While in office, Trump reportedly pressured the American ambassador to the United Kingdom—the billionaire owner of the New York Jets, Woody Johnson—to steer the British Open to a course he owns in Scotland.

While Trump courses are scheduled to host three LIV tournaments in 2023, the two-year-old tour does not have the same cachet or TV viewership as marquee PGA events. “Doing LIV did nothing to add to the prestige of Bedminster or Doral. They already had their own track records,” says Matt Galvin, president of Morningstar Golf & Hospitality. “[The merger] is a little bit of vindication for him, in that he was thumbing his nose in the face of the establishment.”

With Trump the presumed frontrunner for the Republican presidential nomination in 2024, his active business interests with LIV Golf also raise important questions in the lead-up to the election. During his first presidential term, Trump received millions of dollars from the Saudis through the purchase of entire floors in his Manhattan apartment building and booked blocks of rooms at his hotel in Washington. In the future, the Saudi PIF could, in theory, pay the Trump Organization large sums of money as a site fee for a golf tournament without having to disclose the amount publicly. Such payments would reignite controversy over whether Trump was violating the emoluments clause of the U.S. Constitution.

It wasn’t that long ago that PGA Tour commissioner Jay Monahan also objected to the Saudis for apparent moral reasons. Last summer, in response to outcry from the families of victims of the 9/11 attacks over the use of Saudi money in the sport, Monahan publicly drew a distinction between the PGA and LIV by asking golfers whether they ever had to apologize for being a member of the PGA Tour. Now, the Saudi PIF will become the “premier corporate sponsor” of the tour and a large co-investor in the new joint venture.

To see just how far and how fast the influence of the PIF could spread, one need only look across the sports world, where Saudi money has already reshaped international soccer—Yasir Al-Rumayyan, governor of the Saudi PIF and chairman of oil giant Saudi Aramco, is also chairman of Newcastle United in the English Premier League—and Formula 1 in addition to golf.

“You think the golden rule isn’t ‘do unto your neighbor as you’d do to yourself,’” says Galvin. “It’s not. It’s whoever has the gold rules.”