- Huddle Up
- Posts
- The $3 Billion Saudi-Backed Super Golf League
The $3 Billion Saudi-Backed Super Golf League
Huddle Up is a daily letter that breaks down the business and money behind sports.
Join more than 54,000 professional athletes, business executives, and casual sports fans that receive it directly in their inbox each morning — it’s free.
This Email Is Sponsored By…
Eight Sleep is the premier sleep fitness company that powers human performance through optimal sleep.
They use an advanced temperature-controlled system that adjusts throughout the night. It analyzes your personalized sleep stages, biometrics, and bedroom temperature, reacting intelligently to create the optimal sleeping environment.
The result? Since getting my Eight Sleep Pod Pro Cover a few months ago, not only do I fall asleep faster, I get high-quality sleep, so I wake up feeling well-rested and energized — it’s been a game-changer.
If you want to join me and thousands of pro athletes, CEOs, and other high performers that are dedicated to improving their sleep fitness, you should get an Eight Sleep Pod Pro Cover too. Trust me; you won’t regret it :)
Hey Friends,
A new golf league out of the Middle East is threatening to upend the PGA Tour.
The Super Golf League is backed by Saudi Arabia’s $500 billion sovereign wealth fund and plans to pry the world’s best players away from the PGA Tour with $2 billion and an innovative new format.
Here’s what we know so far — former world number one Greg Norman is the figurehead of the league and is also expected to become the commissioner.
They have made a $300 million investment in the Asian Tour, which they described as “only the beginning,” and have started to sign non-disclosure agreements (NDAs) with many of the world’s top players.
The format of the league has not been disclosed yet. Still, most signs indicate a limited field of participants (think: Formula One) that includes 54-hole events, team play, and $20 million weekly purses.
But as they say, a goal without a plan is just a wish. So, the Saudi-backed league has been aggressively recruiting many of the top 100 ranked players in the world.
England’s Ian Poulter has reportedly been offered between $20 and $30 million to sign. In addition, Phil Mickelson has allegedly been offered up to $100 million, and Bryson Dechambeau has reportedly been offered $135 million to become the face of the new league.
For context on how big these offers are, Jon Rahm led the PGA Tour money list last year at $7.7 million, and Dechambeau’s $135 million proposal would be more than Tiger Woods has earned on the course throughout his entire career.
Bryson’s official PGA Tour on-course earnings: $26 Million
Bryson’s alleged offer to become face of Saudi Super League: $135 Million
It's gotta be tempting...
— Samantha Marks (@SamanthaSMarks)
1:35 PM • Feb 3, 2022
Now, most of these players have hinted that details of the reported offers are incorrect, with some indicating the amount might be less and others indicating that it might be more, but that didn’t stop Phil Mickelson from sounding off on the PGA Tour last week.
Here’s what he told John Huggan at Golf Digest:
“It’s not public knowledge, all that goes on. But the players don’t have access to their own media. If the tour wanted to end any threat [from Saudi or anywhere else], they could just hand back the media rights to the players.
But they would rather throw $25 million here and $40 million there than give back the roughly $20 billion in digital assets they control. Or give up access to the $50-plus million they make every year on their own media channel.
“There are many issues, but that is one of the biggest. For me personally, it’s not enough that they are sitting on hundreds of millions of digital moments. They also have access to my shots, access I do not have. They also charge companies to use shots I have hit.
And when I did ‘The Match’—there have been five of them—the tour forced me to pay them $1 million each time. For my own media rights. That type of greed is, to me, beyond obnoxious.”
Calling the organization that enabled you to earn more than $800 million throughout your career “greedy” is certainly an interesting take. Still, there is probably more nuance to this subject than players simply saying they deserve more money.
The PGA Tour says they will pay out $838 million to the players from their projected $1.52 billion in revenue this year. That means roughly 55% of income goes to the players, up from the low-30s just a few years ago and higher than most major professional sports leagues in North America.
Percentage of Revenue Distributed To Athletes
MLB: 54%
NBA: 50%
NHL: 50%
NFL: 49%
But the main difference comes via superstar pay.
Stephen Curry would make $45 million this year even if he didn’t play in a single game, and Patrick Mahomes signed a $500 million deal before his 25th birthday.
Of course, most of these superstar athletes end up making plenty of money off the field also, but still, the most famous golfers in the world are lucky if they can even make a fraction of an NBA max contract on a consistent annual basis.
If they don’t show up, play well, and win tournaments, they don’t get paid.
But I also think that when you allow yourself to step outside the pure economic conversation around pay on the PGA Tour, the Saudi-backed Super League brings up many more questions around the relationship between sports, money, and ethics.
Sportswashing is a term that describes when a country spends outrageous amounts of money on high-profile international sporting events in a bid to bolster its reputation.
And that’s precisely what Saudi Arabia has been doing over the last few years.
The first part of the equation is the violation of human rights. Between unlawful killings, unfair trials, executions for nonviolent offenses, torture, a lack of free speech, arbitrary arrest, religious discrimination, and more, Saudi Arabia has a long history of violating the human rights of its citizens.
And as a result, the country has used its vast oil wealth to go on a multi-billion-dollar spending spree in sports. They have spent money on everything from golf and tennis to chess and horse racing.
They recently acquired Premier League club Newcastle for $400 million and announced a ten-year deal with Formula One that costs nearly $1 billion. Now they’ll look to continue their multi-billion-dollar sports spending spree by recruiting the world’s most talented golfers away from the PGA Tour.
Many critics say this is sportswashing, while others say that local citizens deserve the right to the premium live sports that others worldwide have enjoyed for so long.
I don’t necessarily know the correct answer. However, most financial models indicate that it will be challenging for the new Saudi-backed league to turn a profit anytime soon, given the financial commitment they are expected to make.
But whether most top players decide to stay or go, a capped golf league that pays out $20 million-plus each weekend is undoubtedly an interesting concept worth watching.
I hope everyone has a great day. I’ll talk to you tomorrow.
Your feedback helps me improve Huddle Up. How did you like today’s post?
The Joe Pomp Show: I’ve been dropping 2x weekly podcasts with some of the most interesting names in sports, business, and investing.
I’ll be releasing an episode with UFC heavyweight champion Francis Ngannou tomorrow morning — make sure you subscribe on Apple or Spotify so that new episodes automatically appear in your feed.