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LIV Golf filed for bankruptcy protection on Wednesday (AEST), a dramatic fall for the Saudi-backed league that had big ambitions to challenge the supremacy of the PGA Tour.

Saudi Arabia’s Public Investment Fund, its main benefactor that earlier this year pulled its financing, has agreed to provide $US49.6 million ($68.7 million) in debtor-in-possession financing. The league said in a press release it remains in “advanced discussions” with players to take control of the business, while BC Partners Credit and other investors are expected to provide exit financing when the reorganised company exits Chapter 11.

LIV said in its bankruptcy filing it owes millions of dollars to golfers: Jon Rahm, more than $US7.4 million ($10.2 million); Bryson DeChambeau, roughly $US5.7 million ($7.8 million); and Dustin Johnson, $US5.4 million ($7.4 million). The league valued its assets between $US100 million and $US500 million ($138 million-$690 million) and its liabilities between $500 million and $1 billion ($690 million-$1.3 billion).

LIV burst onto the golf scene in 2022, shaking up the sport by signing top professional players to giant contracts and offering faster tournament play with more theatrics. It was all made possible by the Saudis, part of their big push into sports investing that also includes football and tennis.

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But earlier this year, the Saudis decided to stop funding LIV amid a broader shift in strategy toward investments with better returns. PIF had invested an estimated $US5 billion ($6.9 billion) over four years in the league.

The question remains how sustainable this version of LIV will be without the Saudis’ deep pockets. The pull-back by the Saudis was reported in April and in the following months LIV couldn’t secure another funding source to avoid bankruptcy.

Maintaining players will be crucial and some of the top golfers the league lured away have returned to the PGA Tour and been financially penalised to do so.

But others haven’t gone back to the PGA Tour, and LIV is trying to persuade players to stay with settlements on what they were owed on their previous contracts and then offering ownership in the league.

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More to come

Bloomberg

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