The battle for control of professional golf is over. Saudi Arabia purchased a seat at the table. Such is the biggest takeaway from this week’s shocking announcement that the PGA Tour and the Saudi PIF-backed LIV Golf have agreed to merge into a singular, for-profit entity.

The news came out of nowhere and represented a complete 180-degree turn for Tour commissioner Jay Monahan, who over the past year issued lifetime bans for players who defected to LIV and spoke out in vehement opposition of the new startup and its source of funding. 

The golf odds on betting apps for something like this happening would dwarf the 200-1 odds that then-50-year old Phil Mickelson (the original LIV defector) overcame to win the 2021 PGA Championship.

Details are non-existing regarding the shape this merger will ultimately take, but the bottom line is this – Public Investment Fund governor Yasir al-Rumayyan will now serve as chairman of the board of a new for-profit company in control of the business rights for the Tour and DP World Tour, as well as all of LIV. 

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This new for-profit will be backed by a heavy influx of PIF cash. Regardless of the how and why, this is a massive development in the international sports landscape as Saudi Arabia now has significant control and influence over professional golf in the United States and beyond. 

In that sense, this is a massive win for the Kingdom. Given its track record on human rights, Saudi Arabia has essentially embarked on a multi-billion dollar PR campaign to improve its reputation through sports and entertainment. In just a few years, the Saudis have gained massive control and influence in Premier League soccer, professional wrestling, esports and now the PGA Tour. 

What League Will PIF Target Next?

With endless pockets, business ties across the globe and a serious intent to gain influence, the only question is which professional sports league the Saudis will target next? And speculation is already beginning on the potential acquisition of sports’ holy grail – an NFL Franchise. 

The way in which the Kingdom so quickly infiltrated professional golf and poached top players before reaching a settlement indicates it could happen again at the highest levels of sports, even the NFL. 

However, the Tour’s ownership structure and business model varied drastically from that of other sports leagues. As did the owner-controlled assets. An NFL franchise, for example, owns its team facilities, its brand and its player contracts. As for the Tour?

“It basically owns a concept and a form of intellectual property in which it constructs a Tour that takes place on the property of other entities, that is funded by the … somewhat unpredictable willingness of sponsors to throw 10s of millions of dollars,” said Brooklyn Law School Sports Law professor Jodi Balsam, who worked for the NFL for 13 years. 

“All they’ve really got to sell is a promise that the players will stick around throughout the tournament year and commit to not playing in conflicting events. It’s a very intangible collection of quasi-assets. So, they’re in a much more tenuous position than other team sports, despite how solid and respected and central they are to elite professional golf. It’s a bit of a house of cards.”

Those are a few of the factors that allowed LIV to infiltrate and ultimately reach a merger agreement. It came less than two years after the PIF purchased the Premiere League’s Newcastle United for $409 million in a controversial takeover, with al-Rumayyan serving as chairman. 

Franchise ownership in the UK is subject to less private regulations than other sports, thought that will change in the near future. But that doesn’t necessarily mean Saudi Arabia is poised for an all-out takeover attempt in North American sports. 

NFL Ownership is a Different Beast

Balsam understands the barriers better than anyone having served as the NFL’s Counsel for Operation and Litigations from 1994-2007. 

She explained the multiple barriers in place, with any minority or majority transfer requiring a ¾ owner consent. There must be one individual human being holding at least 30%. Potential owners are heavily vetted. And they can’t use a private equity fund or publicly traded corporation. 

“The NFL, amongst all the dominant professional sports leagues in the U.S., is even pickier than most about who can be an owner,” Balsam said. “They have the strictest ownership rules, requirements and transfer procedures.”

There are roundabout ways in which the Saudis could become involved in the NFL. They could create a private LLC, with individuals who just so happen to be Government ministers holding interest. 

But that will raise eyebrows regardless, and no one could force the NFL to accept them as a partner and franchise owner. 

Even if a Saudi-backed entity were to gain ownership, Balsam notes, franchise owners are still subject to the commissioner’s authority and must abide by the NFL constitution and bylaws. 

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“That raises the question – would a Saudi Government entity even be eligible? And would a Saudi private entity be willing to comply with restrictions?”

While NFL ownership restrictions are still heavy, they have relaxed in recent years and will likely continue to loosen by necessity. 

As recently as 20 years ago, NFL ownership rules required one individual holding a majority share of at least 51%. The other 49% could be owned by as many as 14 individuals, for a total of 15. 

The individual 51% requirement is long gone. The number of individuals permitted has increased from 15 to 25, and the acquisition debt limit was raised from $500 million to $1 billion. 

The NFL also recently did away with cross-ownership restrictions which previously prevented any of its owners from owning franchises in other major sports. 

Essentially, franchise values skyrocketed to the point that these restrictions weren’t feasible. This became clear in 2018, when the Carolina Panthers sold to hedge fund manager David Tepper for $2.2 billion and other bidders were still willing to pay more.

Is Owning an NFL Team Possible for Saudis?

The NFL ownership restrictions are still strict enough that it wouldn’t make much sense for a Saudi-backed ownership bid, nor would it likely be possible at this time. Balsam said she doesn’t believe Saudi Arabia has any immediate plans to invest in major team sports in the U.S. and hasn’t so much heard a whisper to the contrary. 

But after successfully infiltrating the world of professional golf, there’s no reason to think the Saudi’s won’t ultimately look to continue to expand and acquire influence and sports assets in the coming years – perhaps even an NFL team. 

“If I were the Saudi’s, I would just bide my time,” Balsam said.

“I would say, ‘The brass ring, the pinnacle of sports ownership, is an NFL team. Give it another five or 10 years and by necessity, because of escalating team values, the NFL is going to have to further relax ownership restrictions and hopefully it will come to a junction where the Saudis feel comfortable bidding.’”

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