Could LIV Golf Turn a Profit by Targeting Millennial and Gen Z Fans?

In February, long before the summer of golf’s discontent, an excerpt from an upcoming biography on Phil Mickelson was released that partially explained his rumored association with the yet-to-begin, Saudi-backed LIV Golf Series. Many of Mickelson’s sponsors found the association distasteful and dropped him.

Months later, Mickelson emerged from hiding and, along with other big-name golfers like former world No. 1 Dustin Johnson and U.S. Open champion Bryson DeChambeau, officially joined LIV Golf for a deal worth $200 million in early June. Play began outside London at LIV Golf’s first-ever tournament days later and the rest, as they say, is history.

Now with three events under its belt and 10 of the world’s top 50 players inked to contracts that require them to wear LIV apparel when playing in non-LIV events, instruct them to refrain from giving interviews without approval and insist they must assist in recruiting other players to LIV when requested, LIV Golf has been able to make major waves despite not having a national broadcast deal or big league sponsorship partners.

The biggest reason for that, of course, is that the upstart series is backed by the Public Investment Fund of Saudi Arabia and the $620 billion in assets it possesses, according to Forbes. For the PIF, which plans to spend at least $2.4 billion on the league over the next four seasons, money ain’t a thang. That mindset is trickling down to its players, who will be awarded a $1 million bonus for winning any of golf’s four major championships — but also may never be allowed to play in them again.

“LIV Golf, as a start-up, is proud to offer our golfers competitive contracts,” an LIV spokesman told The Wall Street Journal. “Our future is bright and we continue to be excited by the player and fan response.”

But will that future ever be profitable? If LIV Golf is successful in its plan to target Millennial and Gen Z fans as opposed to going after the PGA Tour crowd (viewers are typically over 45) to attract partners, the 54-hole tournament league could be break-even in as little as three years, according to Forbes. “PIF is not classic private equity,” LIV Golf president and COO Atul Khosla told the publication. “We have the luxury to have a very long outlook. We are not in the market to go raise another fund in the next couple of years which requires an exit strategy.”

Thanks to the PIF’s full coffers, LIV’s short-term outlook is secure, but the league will eventually have to secure some revenue from broadcast and sponsorship partners if it wants to have sustainable, long-term success. (Forbes estimates LIV will generate less than $75 million in revenue this year compared with $1.5 billion for the PGA Tour.) A good way to lock up those partners would likely be for LIV to shed the association it has with the PIF, at least in the eyes of the public, a nifty trick that may be impossible to pull off.

Whatever happens, LIV Golf has certainly put a scare into the PGA Tour, which really may have been all that LIV Golf CEO and commissioner Greg Norman wanted to accomplish when he accepted the gig to serve as a thorn in the side of his former employer. “I don’t wake up with any fear about what LIV is and where LIV’s going to go because LIV is the future of golf,” he said. “What I do wake up in the nighttime: worrying about how the players have been treated. Simple as that.”

According to LIV defector Patrick Reed and a $750 million defamation lawsuit he filed in Texas, the treatment by the PGA Tour of its players has been poor. It will be interesting to see if a federal judge agrees.