Confidential Records Show a Saudi Golf Tour Built on Far-Fetched Assumptions

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The season will unfold as LIV’s business evolves toward its planned franchise model. Although professional golf has some signature team events like the Ryder Cup, the PGA Tour generally relies on players competing for themselves. LIV, whose music-blasting gatherings feel little like traditional tournaments, is betting that fans will prefer to watch a dozen four-player teams competing against each other.

“LIV has repeatedly made clear that our stakeholders take a long-term approach to our business model,” Jonathan Grella, a spokesman for LIV, said in a statement. “Despite the many obstacles put in our path by the PGA Tour, we’re delighted with the success of our beta test year. And we’re confident that over the next few seasons, the remaining pieces of our business model will come to fruition as planned. Our business plan is built upon a path to profitability. We have a nice, long runway and we’re taking off.”

Prince Mohammed, the kingdom’s 37-year-old de facto ruler, often gravitates toward splashy ventures and has repeatedly said that he sets sky-high targets in hopes of motivating officials to achieve a fraction of them. In its analysis, McKinsey called the golf league “a high-risk high-reward endeavor.”

The consultants detailed three possible outcomes for a franchise-driven league: languishing as a start-up; realizing a “coexistence” with the PGA Tour; or, most ambitiously, seizing the mantle of dominance.

In the most successful scenario, McKinsey predicted revenues of at least $1.4 billion a year in 2028, with earnings before interest and taxes of $320 million or more. (Federal records show that the PGA Tour, a tax-exempt nonprofit, logged about $1.5 billion in revenue and posted a net income of almost $73 million for 2019.)

By contrast, a league mired in start-up status — defined as attracting less than half of the world’s top 12 players, navigating a “lack of excitement from fans,” reeling from limited sponsorships and confronting “severe response from golf society” — stood to lose $355 million, before interest and taxes, in 2028.

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