Trapped: The Ethics Nightmare of the PGA Tour/LIV Merger
For many PGA Tour players who refused to cash in on the controversial Saudi Arabian-backed LIV Golf Series, June 6 is already being called “one of the saddest days in the history of professional golf.”
Despite the last 15 months of bitter opposition, the Tour suddenly announced it will merge with LIV afterall. Tour commissioner Jay Monahan, once among LIV’s harshest critics, now claims the agreement is “in the best interests of PGA Tour members.”
Problem is, he forgot to ask the players before he sold their names and reputations to the highest bidder on the pro golf open market.
Like many Americans blindsided by the news, Markkula Center executive director Don Heider has questions about what led to the reversal that will bind the PGA Tour to an oil-rich country known for its notorious human rights abuses, murders, and suspected ties to 9/11.
Will public outrage ultimately derail the deal now being investigated by the U.S. Senate and Department of Justice? More importantly, can the group of players who had refused to sell their souls somehow salvage their legacies moving forward?
We asked Heider for some insights.
PGA Tour stalwarts like Rory Mcllroy had rebuffed the LIV tour, but now have no choice. Realistically, can he continue to say he hates the LIV and hopes it goes away?
I think there is room for expression and protest, even in the midst of having to play in the new league. So we’ll see if they (players) exercise that or not. Despite going through some gut-wrenching times after the deal was announced, I think McIlroy has incredible integrity.
If I were his adviser, I would say you should continue to speak your mind, and maybe you wear a black arm band or something. All of these athletes do have some autonomy. It’s just like the NFL players who kneel. They didn’t stop playing, but every game they kneel, and they continue to speak out about civil rights for black Americans and the unequal treatment by police.
I will say the other trap these athletes face is that they all are sponsored, and so if Mercedes or Nike or whoever their sponsor is doesn’t want to keep hearing the players’ political messages, it’s an example of how commercialism can influence the scenario, and not always in a positive way.
But if Nike or a company of that sort values independence and independent thought, players like McIlroy are probably safe to speak out. I’m sure he has advisers who will tell him if he’s going over the edge, but I still think he could do it and negotiate that space successfully, and not lose his sponsorships. And a lot of it’s in how you execute your messaging, right?
Will advertisers take a stand?
I think they’ll stick with it, because it's all about ratings. But remember, the PGA Tour does not have a great track record, either. They have not been good to people of color. For years, Augusta National had no Black members, yet they have the Masters there every year. Tiger was the first one to sort of force their hand. And the PGA Tour hasn’t been good to women, and women of color, especially. Asian women in the LPGA have said that they are discriminated against time and time again. So the PGA has its own dirty laundry.
If it was me, and I was CEO of a company, there are so many other places to invest my money for either advertising or prestige, like F1 (Formula One car racing). That’s becoming a big deal in America, partly because of the Netflix series. There are plenty of other opportunities in sports for sponsorships and advertising dollars so that you don’t have to stick with the LIV.
Who's the biggest loser in this deal?
The fans, because there is no other choice for them in televised golf. I do think they are going to be co-opted into watching golf, or quit watching—which is highly doubtful. So they’ll be supporting companies that are sponsors that are supporting the Saudi government. You’re sort of voting with your attention.
In your estimation, was the merger decision inevitable?
I don’t think so. If you think about other sports mergers, in U.S. pro football and basketball, for example, they were very different than what happened here. Those mergers happened because eventually the level of the competition between identical leagues became good enough it was sort of inevitable. Or, at least, it made perfect sense, right?
But in this case you have a group of investors who decided they wanted to invest heavily in golf, and who just decided to start a league very quickly. So they lure some of the better players away from the PGA Tour with huge paychecks, they set up their own sort of tournament schedule and because of who the investors are, they're not identified—which they should be. Let’s be transparent here, folks.
Could the Tour be saved from itself by, say, a group of more acceptable investors?
Perhaps. But right now, the message is clear, and that is there's no one interested in spending this much money in golf except for the Saudis with their public investment fund.
They say that the merger was inevitable, and it’s the best thing for golf; I think the jury is still out on that. The PGA Tour is not losing money; LIV was losing money and if the PGA Tour had held on longer, LIV might have folded. Maybe people entertained the idea that this could eventually happen, but I don’t think anybody thought it would happen at this juncture.
The group we have not heard from is the PGA Tour board. So it might have been their decision, and Monahan either had to go along with it or jump off the ship. So he decides, “Well, I’ll stay and try to help as best I can, and usher the Tour through the change.” But given what he said about LIV in the past, it’s a pretty big pill to swallow.
What do you regard as the deal's fundamental ethical breakdown?
This was the kind of poor ethical decision that often happens when it’s done in isolation, especially with something that’s as high stakes as this. I’m sure Monahan felt very isolated, and was under a lot of pressure from a lot of different organizations, including his board. But if he would have opened it up to the membership of the PGA Tour and said: “Here are the issues we’re facing. Here is the pressure we’re facing. What do you think? What can we do?” Who knows what solutions would have come forward? But he didn’t do that.
Again, part of the ethical decision making process is: Have you really vetted an idea with all the stakeholders? And have you fully explored alternative solutions with them? I don’t think either one of those thoughts went into this decision.
Commissioner jobs are not easy, and we’ve seen commissioners make good decisions and bad decisions over the years. But again, making decisions in a vacuum often is very dangerous. There’s a lot of paranoia in secrecy, and if you don’t make the right decision, you may bring the whole place down.
What does the decision say about the PGA Tour?
People in power want to stay in power. The PGA Tour wanted to stay in power. But this launch was so much more contentious; the LIV is bank-rolled by a nation-state that has such a horrible track record on civil rights. And that’s not historical, that’s recent. It’s not a democracy. This is a country that has contributed to the war in Yemen, consistently cracked down on activists, journalists and academics, and has no regard for women or women’s rights. They torture people in custody, they assassinate people, and they murder people. There’s no ambiguity about that.
The possible fallout for the Tour, and the Saudis?
It’s like when we have a big baseball strike or an NFL strike or something: Fans go away. The question is, will they come back or not? We’ll have to wait and see. What does this do to the brand loyalty of the PGA Tour? If it’s not going to include LIV in its title, that in itself should be a red flag, right? It’s a way to hide the attention that it’s LIV. Because what is LIV? Oh, yeah, that’s the Saudi royal family. What are they? Oh, yeah, they ignore human rights and order assassinations. They’re calling it a public investment fund, but if people Google it, in 30 seconds they’ll find out: it’s the Saudi royal family.
With this deal, the Saudis are trying to buy respectability. I have not seen the demographics of who the PGA audience is, but I am guessing it’s white, and it’s upscale. If you watch the ad placement, it’s about Cadillacs, not Budweiser, which tells you something. And so they want these influencers—the largely wealthy people who wield influence and respectability who play golf and who sponsor golf. That’s what the Saudis crave. Like anybody with new money, they’re trying to buy their way into society and respectability. It’s sort of an age-old story. But in this case, they’re doing it with blood money.
Is the merger a kind of backdoor way to spread fascism in the U.S.?
I don’t think so, because I think it is not overtly political. They’re just trying to distract us from the horrible things they’ve done. This is not the way to exert political power over the United States. What we see some of the very far-right doing instead, and our former President aligning with a number of dictators, is a much bigger threat than the Saudis buying golf.
Would you call this deal a failure of capitalism?
Yes and no. The PGA Tour is a non-profit (and I think that deserves a review), and it wasn't built on competition, from a business perspective. It’s a monopoly. Then their major competitor rises, and it's not a good competitor. But, yes, this is one example where the marketplace did not produce the optimum result.
We always tell companies that ultimately, ethics and capitalism are completely compatible. And, in fact, in the long run, you’re going to do better if you’re making ethical decisions—if you’re treating your employees well and fairly, and you’re treating customers well, and you’re careful about where you’re sourcing your materials.
So much of a company’s success depends upon consumer loyalty and the strength of your brand, and especially in the age of social media, it has everything to do with your reputation. It’s much harder to control your reputation now than it was 30 or 40 years ago. I tell CEOs—whenever I get a chance—and it’s nothing they don’t already know: Every day there are millions of eyeballs looking at your brand, and all it takes is one huge rupture that goes viral, and your reputation is damaged.
Jun 20, 2023
Photo courtesy of Unsplash.