'Oil Money' Shaking the Global Golf Landscape... Prize Money Increased Fivefold

Saudi Sovereign Wealth Fund-Sponsored Men’s and Women’s Tournament
Total Prize Money Increased Compared to Last Year
Competing with PGA and LPGA through Aggressive Investment

Saudi Arabian capital, so-called 'oil money,' is making aggressive investments in the golf world, shaking up the landscape of men's and women's tours. By increasing prize money to about five times that of existing tournaments, they are enticing well-known players. As efforts are made to strengthen market dominance against the influence built by the PGA Tour and LPGA Tour, movements by the 'traditional tours' to counter this are also spreading. Although there are clear obstacles to growth such as securing television broadcast rights and awarding world ranking points, a gradual shift in perception toward the oil money's offensive, which was previously viewed with discomfort, is being detected.

LIV Golf Invitational Series logo
Photo by EPA Yonhap News

Overwhelming Total Prize Money, Comparable to Major Championships

The Aramco Saudi Ladies International, part of the Ladies European Tour (LET), held over four days from the 16th at the King Abdullah Royal Greens Golf & Country Club in Saudi Arabia (par 72, 6,295 yards), features a total prize fund of $5 million (approximately 6.4 billion KRW), five times higher than last year. The winner's prize has also increased from $130,000 (about 165 million KRW) last year to $750,000 (about 950 million KRW).

This tournament is sponsored by the Saudi Arabian Public Investment Fund (PIF). Considering that the average total prize money for the 12 LET tournaments held last year was 300,000 euros (about 410 million KRW), the enthusiasm of oil money investment is evident. Last year, the LPGA Tour's 34 tournaments had an average total prize fund of $2.75 million, and this season's 33 tournaments average $3,072,800, which is still less. Golfweek in the U.S. evaluated that the Aramco Saudi Ladies International "offers many players a life-changing opportunity."

On the men's side, the LIV Golf Invitational Series (LIV Golf) is expanding its prize money ahead of the new season. Launched last year, LIV Golf is also backed by the PIF. Last year, it offered a total prize fund of $255 million (about 314.7 billion KRW) across eight tournaments, and this year the scale has grown to 14 tournaments with a total prize fund of $405 million (about 516.5 billion KRW). The PGA Tour, which stands in opposition to LIV Golf, is investing $415 million (about 529.3 billion KRW) in total prize money across 47 tournaments for the 2022?2023 season. Although LIV Golf has more than 30 fewer tournaments, the total prize money is set at a similar level.

Competition for Top Players: 'Attracting vs. Retaining'

With the increase in total prize money, the enthusiasm for participation in oil money-sponsored tournaments has heated up. The Aramco Saudi Ladies International features 120 participants, including Lydia Ko (New Zealand), the world No. 1 in women's golf, and 50 players ranked within the top 300 worldwide. Lydia Ko did not participate in last month's LPGA Tour Hilton Grand Vacations Tournament of Champions.

Meghan MacLaren (England), who had expressed concerns that Saudi capital's investment in golf was a form of 'sportswashing' to suppress criticism of the country's human rights issues, has shown a more relaxed stance due to the enormous financial power. Recently, she posted on her social network service (SNS), "In the end, money is power, and we live in a world where that is the truth," emphasizing, "To become the best golfer, we must seize competitive opportunities and improve our financial situation to be able to speak out with conviction."

The PGA Tour has taken measures to prevent key players who defect to LIV Golf from participating in tournaments it organizes. Starting this season, promising players such as college students and amateurs who participate in unapproved tournaments like LIV Golf will be barred from all PGA Tour-sanctioned events for one year. Separately, the 2022?2023 season designated 17 tournaments as 'premier events' and increased total prize money to $15?20 million. Top-ranked players within the top 20 of the PGA Tour player influence index from last season are required to participate in all but one of these tournaments.

Additionally, Tiger Woods (USA) and Rory McIlroy (Northern Ireland), supporters of the PGA Tour, jointly established the venture company TMRW Sports in August last year and plan to launch a screen golf league (TGL) starting January next year. This is a strategic move to retain key players from LIV Golf. Major champions such as Justin Thomas (USA), Jon Rahm (Spain), Collin Morikawa (USA), and Adam Scott (Australia) have promised to join the league.

Charl Schwartzel (South Africa, right) is seen receiving the trophy on the podium after winning the opening event of the LIV Golf Invitational Series held last June at the Centurion Club (Par 70) in St Albans, London, England.
[Photo by Reuters Yonhap News]

Expanding Influence Through Sports... Challenges and Checks Must Be Overcome

Armed with oil money, the PIF is expanding its influence not only in golf but also across the sports world. A representative example is Saudi Arabia hosting this year's FIFA Club World Cup. The consortium led by the PIF acquired the English professional football club Newcastle United in 2021 for ?305 million (about 460 billion KRW). Last year, Qatar successfully hosted the FIFA World Cup for the first time in the Middle East, leaving a diplomatic imprint similar to this. The PIF is led by Crown Prince Mohammed bin Salman, the de facto ruler of Saudi Arabia. The fund's assets amount to $600 billion (about 767 trillion KRW). The PIF announced that from September 2017, when Crown Prince bin Salman initiated a new investment strategy, through the end of 2021, it achieved an average annual return of 12%, higher than the 9% average return of global sovereign wealth funds analyzed by the data analytics company Global SWF.

LIV Golf secured more than $400 million (about 510 billion KRW) in seed money to operate the series. The key issue is profitability. Revenue from broadcasting rights and sponsorships generated by golf tournaments is facing difficulties. Although it was announced that a multi-year broadcasting contract was signed this year with the U.S. broadcaster CW Network, specific terms have not been disclosed. Last year, after launching the series, there was no broadcaster in the U.S. to air the tournaments, so matches were shown via the official website and YouTube. The PGA Tour has already secured broadcasting contracts with major networks such as CBS, NBC, and ESPN+ through 2030. The annual contract fees alone are reported to be around $700 million (about 900 billion KRW).

To raise the series' status, the issue of awarding world ranking points must also be resolved. LIV Golf does not receive ranking points judged by representatives from the PGA Tour, DP World Tour, and the four major championships, causing the world rankings of players who transferred last year to drop significantly. Players have had to weigh the options of money versus prestige. However, attention is focused on whether the trend will change as Jay Monahan, the PGA Commissioner who had been negative about awarding LIV Golf ranking points, will no longer participate in the evaluation starting this year.

This content was produced with the assistance of AI translation services.