Saudi-Backed LIV Golf’s Merger With The PGA Tour Merger Could Herald An Influx Of Foreign Money In U.S. Sports
As the shockwaves continue to reverberate from Tuesday’s news of the planned merger of Saudi-backed LIV Golf and the PGA Tour, it appears likely that a lot more foreign money will soon start to flow into U.S. sports.
That was the consensus on a panel of sports media veterans assembled Thursday at Gabelli Funds’ 15th annual Media and Entertainment Symposium in New York. CAA Sports Co-Head Michael Levine, Sal Galatioto and Forbes editor Michael Ozanian said the notion of Saudi Arabia buying its way into the sport of golf — while controversial in many quarters — is a sign of the global appeal of sports properties, whose value has continued to appreciate.
PGA Tour And Saudi-Backed LIV Golf Agree To Merge, Ending Bitter Legal Feud
Galatioto noted that the four major U.S. sports leagues — the NFL, NBA, NHL and Major League Baseball — have no explicit provisions barring ownership of teams by overseas entities. Until 2016, Japan-based Nintendo had a majority interest in baseball’s Seattle Mariners, he pointed out. “There is going to be more foreign investment,” he said. “I absolutely believe that.” By way of example, Galatioto recalled advising LA Angels owner Arte Moreno as he explored a sale of the team, “we had several bidders from Asia — Korea, Japan — who were very, very interested in the team,” he said.
A sale never happened because Moreno changed his mind. Still, that expression of interest “was just the beginning,” Galatioto said, and Levine and Ozanian noted investments by Saudi Arabia and Qatar in soccer. The global nature of the NBA makes it the most likely to see a multi-national coalition of owners much like what exists in the English Premier League or Formula 1.
Soccer “is a clear indication that you’re going to see these high-priced global assets attract money from all over the world,” Levine said.
Levine said Russian oil money used to be a dominant source of wealth manifest in sports dealmaking, but the war in Ukraine has shifted the balance of power to the Middle East. To some, however, not all money should be treated equally, even when it is funding multi-billion-dollar enterprises. The LIV-PGA agreement has infuriated some stakeholders in golf given Saudi Arabia’s human rights record. Families of those killed on 9/11 have also called the deal a “betrayal” by the PGA given the fact that most of the perpetrators of the attacks were from Saudi Arabia.
“We’ll see what happens with regard to the geo-political circumstances with China,” Levine added. “Any time these asset values grow to the levels they’re at, the number of potential buyers is smaller and smaller and a global pool of buyers is totally logical.”
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