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Home > News> Talking Point > How Saudi money is shaking up the world of golf

How Saudi money is shaking up the world of golf

A $200 million infusion by Golf Saudi into the Asian Tour has huge implications for the future popularity of the sport

The Asian Tour is going to become much richer due to a massive infusion of $200million of Saudi money.
The Asian Tour is going to become much richer due to a massive infusion of $200million of Saudi money. (AFP)

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It’s prom night for the Asian Tour. On 3 February, 2022, the biggest, richest, most star-studded event in the history of the Tour, tees off at the Royal Greens Golf & Country Club in Jeddah, Saudi Arabia. The $5 million Saudi International has been propped up by a handsome infusion of $200 million from LIV Golf Investments—a company backed by Saudi Arabia's Public Investment Fund (PIF)—into the Asian Tour. The high-profile event kicks off a 10-year partnership between the Asian Tour and Golf Saudi that will bankroll ten new events on the Asian Tour’s schedule. The Saudi International will be followed by events in Thailand in late February and early March, then one in India and one in New Zealand. Japan and Korea host tournaments in May and June.

The partnership is nothing short of a windfall for the Asian Tour. Stymied by pandemic-related disruptions over the past two years, the Asian Tour’s revenue from media rights has taken a serious dent. “We’ve had two years where we’ve only been able to give broadcasters seven events,” Cho Minn Thant, commissioner and CEO of the Asian Tour, told Bloomberg last month. “These are 10 tournaments that we don’t have to sponsor and pay for and it will add to our schedule of live events,” he added.

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Meanwhile, the European circuit has started the year with a series of big-ticket events in the Gulf. Earlier last month, former Open Champion Shane Lowry was in the spotlight, as he went about stitching up a vintage performance in the third round of the Abu Dhabi HSBC Classic. Ireland’s ‘people’s champion,’ who, most memorably, won his National Open as an amateur, thrives on layouts like the ones he grew up playing on—links courses stretching along the coast of the North Atlantic. Which is why, believe it or not, he tends to play rather well at Abu Dhabi. But that’s nothing to be perplexed about when you consider that two of the three championship layouts in the Emirate—Yas Links and Saadiyat Golf Links—are about as close as you can get to a links-style golf course outside of the British Isles (The authenticity is not coincidental: Yas Links was designed by Kyle Philips who’s better known for creating the Kingsbarns Golf Links in Scotland). The event marked the commencement of what will now be known as the DP World Tour. Just in case you missed the memo—the European Tour is dead; Long live the DP World Tour.

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The Dubai Port World—a logistics company based in the United Arab Emirates—has been associated with the erstwhile European Tour since 2009, and has been an official Tour Partner since 2015. No one’s complaining about the name: DP World’s title sponsorship ups the ante significantly. Total prize money on the DP World Tour will surpass the $200 million mark for the first time in the history of the Tour. Further, all standalone events on the DP World Tour will have a minimum prize fund of $2 million. Crucially, the schedule will include three co-sanctioned events on the USPGA Tour—a direct result of the ‘strategic alliance’ between the two Tours last year in which they decided that collaboration, rather than competition, was better for business.

This Europe—US combine is unarguably the most formidable tourney in world golf. Both these Tours have the biggest stars of the game, the television viewership, the biggest tournaments, and consequently, the interest of big-money sponsors. Over the last two decades, both Tours have made inroads into Asia—a region with the demographics, the emerging pool of players, and the sponsors to drive the future of world golf—and the Gulf. Oil-rich countries, specifically the UAE, Qatar and Bahrain, have established their presence on the world stage by sponsoring big-ticket events. This has led to much cloak-and-dagger behind-the-scenes action amongst the major professional world golf tours. While the Asian Tour has always had depth and promise—both in terms of the ever-growing pool of players, and potential for growth—it lacked the financial firepower to fight off the bigger tours from stepping on its toes.

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That’s old hat now. The unease in the USPGA Tour and DP World Tour alliance over a potential rival world tour funded by Saudi Golf is already palpable. Last year, the USPGA Tour had announced that it would not give its top players a waiver go play in the Saudi International since the event was no longer sanctioned by the European Tour. But faced with the large number of players who applied for the exemption, the Tour has had to eat humble pie on that front. The biggest draws in the game, lured by appearance fee conservatively reported to range between $1 million-$ 2 million are amongst the field in Jeddah.

In the final week of January 2022, global oil prices hit $90 a barrel for the first time since 2014, driving up revenues for ARAMCO, the Saudi Arabian government-owned oil company. ARAMCO’s $30.4 billion net profits in Q3 2021 dwarfed the net profits of technology giants like Google, Amazon and Apple during the same period. What does this have to do with golf you ask?

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ARAMCO is owned by the Public Investment Fund, Saudi Arabia’s sovereign wealth fund with assets estimated at close to $500 billion. PIF, in case you’re wondering about this digression, is the primary backer for LIV Golf Investments. The implication is obvious: what seems like a lot of money for the Asian Tour is but a drop in the well for the PIF, which has the ability to bankroll such initiatives for a sustained period of time. Will Golf Saudi be successful in creating a parallel world tour to rival its counterparts in Europe and the US? Will players defect en masse to play at new lucrative events as has happened this week in Jeddah? Or will the prestige of tournaments with history, or traditional hallowed venues still retain the ability to attract top-class fields? It’s a toss up, if you ask me. Money talks. And as Knopfler put it rather pithily, “You’ll be surprised, by the friends you can buy, with small change.”

Meraj Shah is a writer and television producer based in New Delhi

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  • FIRST PUBLISHED
    02.02.2022 | 07:30 AM IST
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