Today, Explained - How the Saudis bought pro golf

Episode Date: June 15, 2023

The PGA Tour wanted nothing to do with a rival Saudi-funded golf tour, but like Silicon Valley and the White House, it couldn’t resist the Kingdom’s influence. A sports guy (Rick Maese of the Washington Post) and a foreign policy guy (Jonathan Guyer of Vox) explain. This episode was produced by Haleema Shah, edited by Matt Collette, fact-checked by Laura Bullard, engineered by Michael Raphael, and hosted by Sean Rameswaram. Read more: How Saudi money returned to Silicon Valley (Vox) Transcript at vox.com/todayexplained Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

Earlier this week, I called up my colleague Chad Munn, who, with Vox Media Studios, produces a documentary series about golf called Full Swing for Netflix. Headed to Los Angeles Country Club, where they are hosting the U.S. Open this year. It's a dramatic year for golf. It's gotten a lot more dramatic in the last week. The U.S. Open kicks off today, but that is not the biggest news in the golf world. I remember we talked to Netflix. They're like, where's the drama in golf? And I was like, I don't know. Sometimes people play slowly and it annoys other players. You know, I mean, it was literally, I was grasping the straws, you know, and then we get this. The PGA and European tours have agreed to merge with Saudi-backed rival Live Golf.

I had almost 300 text messages. And my first reaction when I saw the news, I actually thought that maybe CNBC and the PGA Tour website had been hacked. I mean, that's how acrimonious things have been. And I don't think anything will ever be the same again, kind of going forward. How the Saudis bought Pro Golf. Coming up on today, explain. The all-new FanDuel Sportsbook and Casino is bringing you more action than ever. Want more ways to follow your faves? Check out our new player prop tracking

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Rick Mace has been covering them for the Washington Post. Yeah, I've been covering this nasty feud between the PGA Tour and Live Golf since the exception about 18 months ago. And presumably people know what the PGA is, but what is Live Golf? Yeah, the PGA Tour has been around for decades, and it's been the preeminent golf tour on the planet. And really, there's not been a lot of challengers until the past couple of years. Our mission was simple. To evolve the game we love. To bring it across the globe. To show how loud it can be.

Live Golf was a Saudi-funded startup that really wanted to change the game and give both players and fans another option. And they did it by recruiting some of the top players from the PGA Tour to kind of jump ships. They dangled huge contracts in front of some of these players and really fractured the world of golf and divided the sport and created this huge civil war that has kind of hung over the game of golf for the past year and a half. What Live Golf did was they came on and they said, we are a different product. We're going to go after a younger audience. We are going to look different. We're going to feel different. If you go to a live event, and I've been to a few of them now, there's music playing.

It's not like that quiet, hush, hush, respectful game of golf that maybe you're used to. You know, you hear concerts at the end of tournaments. Okay. Players are allowed to wear shorts. And the format of the golf is different. Live builds itself as kind of a team event. So there's individual winner at each tournament, but there's also a team winner. In it goes! After three days of scintillating golf in Miami, your inaugural Live Golf team champion. And then the format itself is a little bit different. PGA Tour has largely been 72 holes over four days.

Midway through the tournament, half the field is cut and they go home. And then everyone kind of starts, you know, in the first tee and they go on. Live has a little bit more action-packed event. It's only three days long. There's no cut so everyone gets to play the entire tournament and therefore everyone gets to make money. Even the player who finishes last will pocket $120,000. And it's a shotgun start so So all the players are on the course at the same time going through and the leaderboard is constantly changing. And they

think it's a more exciting game of golf that way. Yeah, you're making the Saudi Arabian version of golf sound way more fun, Rick. I mean, I've seen it a few times. It's a lot more confusing. It's almost like a party atmosphere. It's a lot of younger people, and maybe the drinks are flowing a little bit more heavily. So it could be more fun. For the traditional golf fan, I think people are having a hard time warming up to it. Who are the golfers that they recruited? Would our listeners have heard of them? I think so. I mean, Liv knew that they needed some big names in order to get this tour off the ground, and they went after some of PGA's biggest stars, Dustin Johnson, Brooks Koepka, Cam Smith. These are all guys that won major championships. Probably the biggest name is Phil Mickelson, you know, one of the biggest

golfers of the past quarter century. And there's plenty of guys they didn't get. You know, there were reports that they tried to get Tiger Woods and they offered him upwards of $700 million. And Tiger still said no. So they were going after every big name because they knew that's going to make their product as legitimate as possible. And maybe worth asking here, why would Tiger Woods say no to $700 million to play golf? Well, for starters, I mean, Tiger Woods already has a pretty comfortable bank account, I assume. So maybe that's not as life-changing for him. But there's several other reasons. I mean, the PGA Tour is the game of professional golf for many people.

And golfers care about the history and the legacy and the connections to Jack Nicklaus, Arnold Parmel, and all these legends of the game. And that certainly matters to guys like Tiger Woods and Rory McIlroy. The players who have chosen to go to live and to play there, I disagree with it. I think that what they've done is they've turned their back on what has allowed them to get to this position. But also a lot of guys had issues with some of the leaders at the top, Greg Norman, who was this really kind of legendary PGA Tour golfer

that has sworn for years that he wanted to shake up the game, that he wanted to challenge the Tour. And he created a lot of enemies along the way. And so a lot of players didn't want to go and be a part of that for that reason. You go back into Saudi Arabia, they're making a cultural change within. They don't want that stigma going into that next generation and their kids' kids. They want to change that culture, and they are changing the culture. And you know how they're doing it?

Golf. Sports-washing is how they're doing it? Golf. Sports washing is what you're talking about there. No, I'm not talking about sports washing. They're changing their culture within their country. So maybe they didn't like the guy at the top, but what was the beef with the funding? Liv Golf's major allure is that they had almost unlimited money behind them, this sovereign wealth fund that Saudi Arabia has really turned to to diversify the nation's economic interests. And a lot of guys had issues

with Saudi Arabia in general. They had concerns about some of the human rights abuses that we've heard and read so much about. I would ask, you know, any player that has left or any player that would ever consider leaving, have you ever had to apologize for being a member of the PGA Tour? Obviously some players were overcome it. Some players, you know, put their heels in the sand and said, no, there's no amount of money

that would make me want to go and be a part of that. I mean, it was just raw emotion almost every turn. And you had star players like Rory McIlroy. They just had visceral reactions. I still hear it live. Like, I hear it live. Like, I hope it goes away. And I would fully expect that it does. It fractured relationships with some of their fellow PGA Tour pros. Guys like Phil Mickelson, guys like Sergio Garcia, people that jumped ship and really trash talked the PGA Tour on the way out. I see Live Golf trending upwards. I see PGA Tour trending downwards. And I love the side that I'm on. And I love how I feel. I love how

I'm reinvigorated and excited to play golf and compete. The PGA Tour was adamant that they wanted nothing to do with live golf. They told their players, if you go play with live golf, you're done with us. We'll take away your tour membership card. You know, you would face fines, penalties, suspensions if there were ever a day to come back. And in fact, they made clear there might not ever be a day you come back if you leave your persona non grata on the PGA Tour going forward. We're not going to allow players to free ride off of our loyal members, the best players in the world. They went to Congress and urged lawmakers, don't let this

happen. Do what you can to help save us. And it really was. It was a fight for life because with so much money behind Live Golf, it was an existential crisis for the PGA Tour and really the first one the tour has ever seen. If they lost their top players, what are they? People tune in because they want to see the best golfers on the planet. And if all these best golfers weren't showing up on the course, then why would they tune in? So Live launched last spring, and there were basically protesters at most of its U.S.-based events.

So the first one in the U.S. was in Oregon, and there were basically protesters at most of its U.S.-based events. So the first one in the U.S. was in Oregon and there were protests there. I'd love to play around the golf with my father, but I can't because of what the Saudis did, murdering him on 9-11. I would ask Americans who are thinking about going to this tournament to instead spend time with their families, maybe play around the golf with their father, something I wish I could do, but because of the Saudis, I'm not able to. They came to Bedminster, where Donald Trump has a golf club. There were protesters there. These protesters say instead, the former president is picking profit over justice by hosting a contentious golf tournament at his golf course,

one with ties to Saudi Arabia and just 50 miles from ground zero. This adds insult to injury. He is not just allowing them, but welcoming the Saudi-involved golf league. And they wanted to say, don't get distracted by these great golfers and by this beautiful, shiny new toy. Remember where the money's coming from. It's coming from many of the same people that they think were behind 9-11 and that some law enforcement officials have found over the years

were behind 9-11. People around the world are going to see that, unfortunately, Saudi money trumps morals and murder. How do we go from a civil war to the news last week that these two entities would be partnering up? A lot of this stuff happened behind closed doors in total secrecy. And in fact, I think only a handful of people really know how we got to this point. But what happened over the course of a year, Live Golf sued the PGA Tour and said there's all kinds of antitrust violations. The PGA Tour tried to quash us and kill our business from day one. The PGA Tour countersued and said, you know, you were meddling in our contracts and recruiting players that had commitments.

And really what that meant was for the past year, both sides have been pouring millions and millions of dollars into this litigation. And on the other end, their business operations were also bleeding all kinds of money because the PGA Tour had to ramp up its cost to compete with the Live Tour. They had to offer players more money

and they had to stage bigger events. And the Live Tour, meanwhile, was staging its huge mega events, but it had very little income. They didn't have

the corporate sponsors. They didn't have the big TV deal. So both sides were really on loose economic footing. And I think it finally hit a point where they said, hey, we got to find some common ground here. The U.S.-based PGA Tour, the European-based DP World Tour, and the Saudi-backed Live Golf Tour have announced a landmark agreement to unify their sport on a global basis. Tell me what exactly the deal these two organizations struck with each other is. What it really is, at least on paper, is a little bit of an alliance and a combining of resources.

They're creating a new entity that's going to be a for-profit commercial entity where they're going to work together and strategically share resources and figure out a path to make money. And then they're going to figure out how the tours can function differently. And it's very possible that in the future, Live Golf doesn't exist the way we know it today. I don't think the PGA Tour is going to change that much, but they're going to figure out a path

where players can compete on all three tours. We don't know what that's going to look like or how it's going to be, but there is a day, and that day is not today or tomorrow, where we could see all these players again competing on the same tour week to week. Is this a done deal? It doesn't sound like it. Yeah, I'd say it's far from a done deal at this point. What they've agreed to is the basic framework, but the details all still have to be ironed out. And even when that happens, the whole deal has to go before one of the boards that includes some players, and they have to sign off on it.

And then from there, as with any kind of merger or alliance, it's subject to some scrutiny from the government. So I think there's still many more hurdles to come. And it's hard to say exactly how serious those hurdles are until we know what some of the details of the deal are. That was Rick Mace. He writes about sports for the Washington Post. Shortly before we hit publish on the show today, the Wall Street Journal broke the news that the Department of Justice had notified the PGA Tour that it indeed would be investigating this deal over antitrust concerns. So Rick kind of called it there. Looks like this deal is a ways away, but if it goes through, the biggest winner hands down will be Saudi Arabia and a guy in charge over there who people call MBS. More on why when we are back on Today Explained. and put money back in your pocket. Ramp says they give finance teams unprecedented control and insight into company spend.

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You like that, old man? You want a piece of me? I don't want a piece of you. I want... Today Explained, Sean Ramos from back with Jonathan Geyer, senior foreign policy writer at Vox. Jonathan, are you a golfer? Maybe putt-putt.

You do a little mini golf. Yeah. And I would say you and me, probably the golf course wasn't the first thing you think of when you're talking about MBS, the Saudi crown prince, but major play for American and international golf. Why do MBS and Saudi Arabia care so much about golf, Jonathan? It is a great question. You've probably heard the term sports washing. You know, this happened with the World Cup. This happened with the Olympics. It's a really great way to bring people together and have them forget about heinous human rights violations and wars and brutal strongmen. And I think MBS has picked the most low-key sport

that brings together a lot of wealthy people, a lot of influential people, and we'll have them not talking about the Saudi crown prince, but we'll have them talking about a lot of fun on the course. I spoke with a Saudi expert who I often call who said that this is a preview of how MBS is going to be taking over lots of industries. Sports, yes, but this has been happening with Silicon Valley. He's been having plays for media, for Hollywood, for other really important things that you and I

consume almost every day. So while we may not be golfers, a lot of the country is. It's a ton of money. It's a ton of influence. And it's a great way to change the conversation and give MBS and his friends a lot of power, soft power in America and across the world. Saudi Arabia threw this thing called the Public Investment Fund, which is this sovereign wealth vehicle, you might call it a half-trillion-dollar piggy bank of the Saudi crown prince, has just been investing majorly, especially in Silicon Valley, stuff like Postmates, Reddit, Credit Karma,

those on-sneaker shoes, running shoes you see everywhere, are indirectly or directly getting a huge amount of money that's basically, I don't want to say laundered because it's not illegal, but it's kind of washed through different investment vehicles. So it's not like those on-sneakers are going to say MBS on the side. But at the end of the day, a lot of that money is traveling through different investment vehicles and ending up being consumed by just about everybody we know. So you're saying there's this massive slush fund and that the Saudi government is funneling money to Hollywood, to Silicon Valley, and now to golf. Tell me more about how this slush fund works exactly, Jonathan. This is a tremendously large fund. Based on the reporting I've seen, it's about $650 billion.

It's going to grow to $1 trillion by 2025. And when the head of the fund was speaking earlier this spring, he predicted $3 trillion by 2030. So, of course, Saudi Arabia isn't the only country that has a sovereign wealth fund that's doing this stuff. It's just that this is a particularly large fund. And I think the reputation of MBS really merits more scrutiny. It was at the Saudi consulate in Istanbul that Jamal Khashoggi met his brutal end. He was strangled as soon as he entered the building by a team of Saudi assassins, who then dismembered his body. The damning conclusion of the declassified intelligence report

is that Saudi Arabia's Crown Prince Mohammed bin Salman approved an operation in Istanbul to capture or kill the Saudi journalist. MBS has engaged in some pretty violent activities during his relatively short reign as Crown Prince. He basically blackmailed many members of his royal family at the Ritz-Carlton in Riyadh. He is largely responsible for an incredibly destructive war in Yemen. Countless amount of civilians have died. And, you know, it might be noted that some of the weapons being used come from the United States. And it's largely been a kind of rogue foreign policy that he's run. And President Biden himself, when he was candidate Biden on the campaign trail, described Saudi Arabia as a pariah. So these criticisms, you know, were very much

front and center in U.S. policy. And now it's kind of a major about face for a lot of these industries, for the Biden administration. And, you know, the knock-on effect is Saudi Arabian dollars are kind of entering the public sphere in full force. Joe Biden infamously went over and fist-bumped MBS and asked him to— Fist-bump diplomacy, yeah. Fist-bump diplomacy. Asked him to pump the brakes on oil prices back when they were soaring last year, I believe. This fist-bumping with MBS when he arrived after vowing to make Saudi Arabia a pariah state. Washington Post publisher Fred Ryan called it, quote, worse than a handshake and, quote,

shameful. Are we holding professional golf in Silicon Valley and Hollywood to a higher standard than the president of the United States who who sort of failed in his effort to make Saudi Arabia a pariah state? That is a tough question, Sean. I mean, no, no, no. I think it is the question because human rights is tough. I mean, what, do we boycott everything? Do we not engage in any country that's doing bad stuff? I mean, I don't think we should hold President Biden to account for the reason that PGA Tour and Live Golf are likely to merge.

But it does show a sign of the times that when the president is willing to make a compromise with someone who the CIA said ordered the killing of a journalist without getting some kind of guardrails or something in return that shows that Saudi Arabia is going to take these criticisms seriously, it really sets everything down a much worse path. To me, the worst thing is that it encourages a ruler like MBS to say, well, I can kill a journalist and I can still make major inroads in American culture. Of course, that happened during the former president's tenure. And that guy apparently, I believe, is a known golfer, though I hear a cheater.

I'm not even sure you'd call it golf because he takes mulligans whenever he wants them. One time he made a six and made me write down a four. He plays really fast. He doesn't putt out. He's in his own cart and just flies off. And you sort of try to just hang on. It's kind of like he's the tornado and you're the trailer. President Trump, as the New York Times has reported very thoroughly, stands to benefit from this. And he's definitely someone

who's been photographed with the head of the Saudi public investment fund. And that gentleman was wearing a MAGA hat. So clearly there's some political jostling here and much to be gained by the Trump family and its conglomerate of golf resorts. So it sounds like Saudi money is already basically everywhere, but not yet fully everywhere because this deal is a big deal. So what does this look like in five or 10 years if, you know, MBS and this massive slush fund of money really goes everywhere? What came to mind immediately, Sean, is the Houston Rockets in China. The Houston Rockets went from one of China's favorite basketball teams to essentially non-existent. It all started with a now-deleted tweet from general manager Daryl Morey saying,

fight for freedom, stand with Hong Kong. That statement of support for pro-democracy protesters was seen as an affront to the team's Chinese fan base. So what happens if golfers, if this deal goes through, criticize human rights violations in Saudi Arabia? And what happens if MBS takes over more industries and players and actors and cultural figures feel like they can't criticize this country because they are writing paychecks, underwriting prizes? That's a frightening reality because we've seen it play out with China's repressive reach in a lot of sports. We've seen it in the way that the Olympics has played out and the World Cup has played out where certain criticisms, certain protests were just not allowed. And that's not very American. Jonathan Geyer writes about the world for Vox.

You can read him at Vox.com. One thing Jonathan discloses in his writing that I'll also disclose here and now is that the Penske Media Corporation became a minority shareholder in Vox Media earlier this year. And guess who's invested in Penske Media? Mm-hmm. That Saudi money really is everywhere. Thanks to Jack Hirsch and Caitlin Burla for their help with today's show. We were produced by Halima Shah, edited by Matthew Collette and Miranda Kennedy, fact-checked by Laura Bullard and mixed by Michael Raphael. Today Explained is also made by Victoria Chamberlain, Abishai Artsy,

Amanda Lou Ellen, Siona Petros, Miles Bryan, and Hadi Mawagdi. Our supervising producer is Amina Alsadi. My co-host is Noel King. And we get lots of help from Patrick Boyd. We are on the radio in partnership with WNYC

and we are part of the Vox Media Podcast Network. you