Yahoo Finance reporter Josh Schafer speaks with LIV Golf President and COO Atul Khosla about the new Saudi-backed golf league and how it plans to compete with the PGA.
- Saudi backed LIV Golf bringing a new member into the fold. Former Masters Champ Bubba Watson will officially join the play in September in Boston. But it's day one of the third LIV Golf Invitational series. The three-day event is taking place out of Trump National in Bedminster, New Jersey.
The divisive Saudi-backed league has attracted a number of high profile players who've received some eye-popping payouts-- Phil Mickelson said to have been paid $200 million to join LIV, Brooks Koepka, $150 million, Dustin Johnson, Bryson DeChambeau, Sergio Garcia, all $125 million each. That's $725 million to five guys before they win a single tournament.
The prize pool for next season-- a staggering $400-plus million, all of this funded by the Saudi's Sovereign Wealth Fund. Josh Schafer is out there live in Bedminster with the tournament underway, 40 miles from the World Trade Center. And he's joined by a special guest. Hey, Josh.
JOSH SCHAFER: Hey, Dave, yeah, I'm here with Atul Khosla. He's the LIV Golf CEO and President. And I think we got to start right with the news. We just watched it inside. Bubba Watson is going to be joining LIV Golf. How many more players do you expect to add this year? Any big big names you guys have your eyes on?
ATUL KHOSLA: We've had a great run for the first two events. I'm really excited about the momentum that we've built. Players are incredibly interested in joining LIV. You just heard Bubba's announcement. We, I'm sure, will have a few more to follow sometime in the course of this year. I won't highlight those at this point in time, as we work through-- good first question, though--
JOSH SCHAFER: Sure.
ATUL KHOSLA: --as we work through the deals with the respective players, but couldn't be more happier about how well the players have embraced the product.
JOSH SCHAFER: And I want to talk about what we're seeing here in Bedminster. A couple of things caught my eye. I think the top thing, guys, a parachuter bringing in the American flag to Thunderstruck, not normal for golf. What is the vision for golf that you guys are bringing?
ATUL KHOSLA: We think LIV i the future of golf. We think we are here. And that means [AUDIO OUT] ours. And one of those facets is music. We are very much viewing this golf course as an arena, in terms of going to any other NBA game--
--or any other NFL game. This is our stadium. And how do we bring that engagement and entertainment to this venue is what we're focused on. So you're absolutely right. You're going to see or hear a lot of music. We've had quite a few conversations with players about it. They love it and embrace it. That's how they practice many times. [AUDIO OUT] That's a different vibe on a golf course.
JOSH SCHAFER: And I think we just had a missed putt here on nine that you might have just heard. So there's that atmosphere as well. But another thing that isn't here quite yet is a broadcast deal. We know that you guys have been in talks with people like Charles Barkley. Are you looking for names that are maybe unfamiliar or not as familiar in pro golf, but are familiar broadcasters? And what's the plan for a streaming deal?
ATUL KHOSLA: For us, at the end of the day, we absolutely need a broadcast deal. And that is needed for any healthy sports league. Our objective this year has been to stand up the product, let fans take it in, [AUDIO OUT] take it in, and give us feedback on what's working, what's not working. We are very much looking forward to this summer of going into those conversations with broadcasters with the hope of having a broadcast deal for next year.
We feel really good about the talent that we have in the booth, excited about David joining us earlier this week, so we think we've got a really good blend of golf experts, but also key influencers in the golf world, so all in all, pretty excited about where we find ourselves. And clearly, we've got a lot of work to do.
JOSH SCHAFER: And obviously, that's part of the path to profitability, right, is probably getting a deal like that. I'm curious, a lot is made about where some of this money comes from when we talk about the public investment fund. What's been the direction from them, as far as what their expectations are and when you do need to turn a profit?
ATUL KHOSLA: From their end, they are a massive private equity fund. They are one of the top four or five in the world. And we are very grateful to have that kind of a backing at this point in time. They are not a fund that is waking up tomorrow morning and saying that I have to raise my next batch of funding, so therefore I need an exit strategy of my current deals to show that.
But at the same time, they are a fund that is very prudent and has grown tremendously. So therefore [AUDIO OUT] leeway, patience is there, to build this right and to build it for the long term.
JOSH SCHAFER: And when we talk leeway, I'm sure that's a little bit down the line. But what do you view as success, maybe say three years down the line? Where is LIV in three years, do you feel like it's successful?
ATUL KHOSLA: I think for us, we're taking baby steps, get London off the ground, get Portland off the ground. The next big thing we just have done yesterday is to announce the league. Going into next year, we're going to have a full blown league, 12 established teams, 48 players, 14 events globally. So that was, for us, the next immediate step.
After that, I think we're looking to establish the teams. The team style we think is unique. It's different. It's creating a different level of fandom for golf fans. They can follow the player, but they can also follow a team. And initial indication is fans love it.
We're not doing anything that is new to the world of sports. There are teams that exist day in, day out in sports. There always have. We're just introducing it to golf. And we feel that these teams, over time, will develop franchise values. And there will be equity in these teams that an evaluation that goes with these teams.
JOSH SCHAFER: So who's going to own them then?
ATUL KHOSLA: So we own a majority of the teams. And some of the players have a percentage equity in the teams as well.
JOSH SCHAFER: Is there a potential for them to then sell that to someone then, so a buyer could come in?
ATUL KHOSLA: Absolutely. Yes, down the road, we expect to do that, just like any other sports franchise at some point thinks about-- the ownership there thinks about selling a piece or all of it. All right, Atul Khosla, thank you very much for joining us today. Back to you in the studio, Seana.
- All right, Josh, thanks so much, great interview. And Dave, you and I were talking during that segment. They certainly are throwing a lot of money at these players, attracting big names. The crowds, though, I was surprised not more people were there. And then of course, the big question, they still don't have a TV deal, which is so critical.
- Yeah, the crowds have been very small at all the tournaments. I'm watching right now. 53,000 are live streaming it. That's a pretty typical number for LIV Golf, which is not sustainable when you are committing $2 billion total to this product. Yes, the Saudi Sovereign Wealth Fund, some feel is unlimited, but at some point you have to have a return on that investment. And we're nowhere near that. $2 billion is a massive spend and a massive burn. We'll see.