“LIV Golf Won’t Survive Two More Years,” Says Economist Who Interviewed CEO Greg Norman
Famed "Freakonomics" writer Steve Levitt is convinced the PGA's rival tour will soon fail
Greg Norman still believes. The CEO of LIV Golf told economist Steve Levitt, who’s also co-author of the best-selling Freakanomics book series, that the league he fronts is “creating new fandom, creating new excitement for the people who come to our golf tournaments and [is reaching] down to a new audience.”
Norman also said on Levitt’s podcast, People I (Mostly) Admire, that LIV has innovated in a “virgin space” of golf, has created “generational wealth” for some of the tour’s players — who he pointed out are “independent contractors” — and that the injection of more than $2 billion into the sport writ large is not a bad thing. In his mind, it was perhaps an inevitability.
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“If you look across all sports around the globe, sports have become an asset class and private equity is being invested into many of these sports,” Norman said. “So what happened with golf? We had an investor who wanted to come in.”
Recalling the time Jack Nicklaus, Arnold Palmer and other top players “broke away from the PGA of America to start the PGA Tour,” an act that led to bigger purses for the competitors, Norman said the construction of LIV has been a similar endeavor, with players exercising their right to earn more from golf. He even compared LIV’s team structure to that of the NFL, where individuals have ownership stake in their teams and can work to control their “profit and loss,” Norman said, through the acquisition of sponsors and other maneuvers.
While Levitt was open-minded and respectful of his guest, ultimately he was non-plussed. The William B. Ogden Distinguished Service Professor of Economics at the University of Chicago said to his audience — in a brief monologue at the end of the podcast, recorded without Norman’s microphone presence — “I just don’t see the franchise model working, at least in its current form. In that case, I don’t think LIV will survive more than a couple years.”
He hedged that statement by volunteering that he also once said Amazon would never make a profit and was wrong about the viability of Bitcoin and electric vehicles. “So my opinion is probably worth, well, nothing,” Levitt said.
One thing Levitt was almost certainly right about, in agreement with Norman, is that competition for the PGA has served the organization well, helping to spur innovation. “I suspect it will be a benefit to golf fans,” Levitt added. “Because not only is LIV Golf trying out all sorts of new things, but the PGA Tour is innovating also, like with the new Monday night team matches, slated to start in 2024.”
Innovation intended to titillate golf fans has shown up to the PGA Tour even sooner than that. This month, as reported by Sports Business Journal, attendees of the WM Phoenix Open were able to “view shot tracers and other graphical overlays on their smartphones by pointing their cameras to the action on select holes,” thanks to an augmented reality platform now available on the revamped PGA Tour app. (Fans can engage with the AR tool at 12 tournaments this year.)
What might be even more concerning for the LIV league is the fact that the PGA is set to dispense its biggest purses in the tour’s history. A set of 13 tournaments will have an average purse of $20 million, per Front Office Sports. There’s also that whole anti-trust lawsuit, which does not appear to be going well for the Saudi-backed league.
But Greg Norman still believes. The founding of LIV Golf to compete with the PGA and show the world that the sport does not operate under a monopoly, he told Levitt, was “the right thing to do.”
He added: “And you can’t run through a brick wall without getting bloody.” However, you can also break your neck.
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