Saudi’s LIV golf exit is just the start

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Saudi Arabia once had grandiose plans. There was a mega project in the desert called Neome. Remember that one, Darien? Very well. I uh did an episode on that two years ago. That's right. City encased in glass. The Saudi government was also gonna pour millions of dollars into New York's metropolitan opera. It's teaming up with President Trump's son-in-law and other investors to try to buy video game company Electronic Arts for$55 billion.

Saudi's also spent five billion dollars on an international golf league called Live Golf. These projects were an effort to diversify the Saudi economy beyond oil. But they were also about soft power, reputation laundering, and raising the country's cultural profile. This is the indicator from Planet Money. I'm Wayland Wong. And I'm Darien Woods. Saudi leaders were already cooling on some of these investments, and the war in Iran could be the final straw.

Today on the show we look at how geopolitics both fueled and doomed one of Saudi Arabia's splashy cultural endeavours, its foray into professional golf. Seems like we have it all, man. On the Planet Money Podcast, a lot of countries these days aren't rich, they aren't. In the middle. Why is that? Listen on the NPR app or wherever you get your podcast.

In twenty sixteen, Saudi Crown Prince Mohammed bin Salman unveiled a big plan to broaden the country's economy beyond oil. He called it Vision 2030. The government would tap its massive sovereign wealth fund called the Public Investment Fund. and it would use some of the fund's hundreds of billions of dollars on projects both inside and outside the country.

Golf was a piece of this vision. Alan Shipnuck has covered the sport for over thirty years. He also wrote a book about live golf called Live and Let Die. Also, he's the son of a negodomit. Do you think about economics a lot in your job covering golf and sports? Unfortunately, yes. WHAT DO YOU MEAN I'M FU- Yeah. I mean, it would be nice if we could focus on the purity of the competition, but that's a very quaint old fashioned notion.

Uh money has driven professional sports in a profound way, but in golf, especially with the arrival of Live, money has been the overriding topic in professional golf. And not just any money, but Saudi money from the Public Investment Fund. Alan traces the Saudi interest in Gulf back to Yasser al Rumayan. He's the governor of the Public Investment Fund. And he's the chairman of the state-owned oil company.

He loves golf. So that's been a driver. There's no question. If he loved beach volleyball, the Saudis probably would have invested in in beach volleyball. A lot of sand, it's it's right there. Alan says the Saudis also saw golf as a potent diplomatic tool. The Saudis understood that.

the the halls of power are most easily accessed with a golf club in your hand because you could go to a a f economic forum and maybe you could have drinks at night, whatever it may be. But to go out and spend five hours with you know, the people who run the United States economy and run the United States government, that is very enticing. And the bonds that are created on a golf course are profound. In the world of professional men's golf, the PGA Tour holds an effective monopoly.

It organizes competitions where players move up and down a metaphorical ladder. They win prize money for performing well, and the best players earn spots in the big tournaments like the US Open and the Maps. Then in 2019, Saudi Arabia hosted an international golf tournament. This was just months after Saudi agents assassinated Washington Post journalist Jamal Khashoggi. US intelligence later determined that Crown Prince Mohammad bin Salman approved the operation.

He has denied this. Despite the outcry over Khashoggi's murder, the golf tournament went on, and the Saudis paid twenty million dollars in appearance fees to professional golfers. Alan says this amount of money was unheard of. The lesson for for the Saudis was that you can buy the goodwill of professional golf, you can buy the services of players, they will follow the money.

In 2021, the Public Investment Fund committed to backing a new venture called Live Golf Investments. Hall of Fame golfer Greg Norman was named as CEO. Liv offered lavish signing bonuses to recruit marquee players like Phil Mickelson and Dustin Johnson away from the PGA tour. The league also needed venues to host tournaments, so it turned to a prominent golf lover with a bunch of courses bearing his name. Darion, you know where I'm going.

Uh yes, President Trump. Alan says, based on his experience covering the golf world, that Trump has always wanted to be a member at elite invite only golf clubs. You can buy the biggest, gaudiest house in Florida, and he did in Mar-a-Lago, but Trump will never be accepted at Seminole Golf Club. He'll never be get a membership at Augusta National or at Pine Valley or Cypress Point.

They don't like new money. They don't like the way he conducts himself. And it burns Trump to the core that he cannot get into any of these clubs. And in a way that a non golfer could never understand. And so he had to build this entire network of clubs he owns just so he'd feel like he had a place to play. The golf courses are owned by the Trump Organization, which is run by the President's sons, and the PGA had stopped holding events at Trump owned courses after the january sixth riots.

The only place he could he could host a tournament, the only people who are willing to acknowledge him in the game of golf. was was Live. It was the Saudis. When they launched their tour, they were desperate for venues. And of course Trump raised his hand. It created this very unprecedented dynamic where a a foreign government was paying a former president and now a sitting president to host tournaments.

Live had billions of dollars, marquee players, and Trump's goodwill. What it didn't have, Alan says, was fans and ratings, especially in the US. For all the noise around live golf, it's always the macro story. The money, the sports washing. uh the Trump factor. No one ever talks about the competition. Like you could ask the most diehard fan, name the five greatest moments in live golf history, like on the golf course. And they would stumble to get to past one or two.

The Saudis ended up putting five billion dollars into Live Golf, and they soured on their investment. Last month the Public Investment Fund said it would not be funding the league beyond the current season. Liv is now looking for money to keep going. Some players that defected to the league are trying to get back in the good graces of the PGA. Liv also postponed events, including a tournament that was supposed to be in New Orleans this summer. That is Andrew Lieber's home base.

To the extent that these projects were aimed at changing perceptions of Saudi Arabia inside the United States or elsewhere, broadly I don't think that they were successful. Andrew is a political scientist at Tulane University. He's also a non resident fellow with the Carnegie Endowment for International Peace. Andrew says that the Iran war may have shown Saudi Arabia and other Gulf states that their efforts to curry favor with the US didn't add up to Mars.

Oh a theme of twenty twenty five was the thought that these states could pledge investments and make make almost direct payments to the president's family and that would be enough to ensure that they had uh significant influence over what the United States does in the Middle East region, at least in terms of like forestalling some major conflict. Um that theory has now gone out the window.

And Andrew says even before the Iran war, Saudi officials were looking at Vision twenty thirty with a more critical eye. But it was much harder to justify spending billions of dollars on primarily, almost entirely non Saudi golfers to participate in a rival golf leak. Hard to explain spending millions of dollars on an opera house in New York.

when you have a growing concern at home in Saudi Arabia about not only where our jobs going to come from, but where are good jobs going to come from that are going to enable Saudis to live lives similar to what they see in neighboring wealthier Gulf states.

Saudi Arabia has the largest economy among the Gulf states, but its per capita income is lower than Qatar and the United Arab Emirates. Saudi officials are now focusing on sectors they believe will benefit the domestic economy, like data centers and AI. The Sovereign Wealth Fund has also invested in the electric vehicle maker Lucid. The company is opening Saudi Arabia's first ever car factory.

Angie says that the Vision twenty thirty cultural investments did bear some fruit, just not on the international stage. the government loosened restrictions on public entertainment and gender mixing in Saudi Arabia. As a result, he says, there's now a domestic film industry, a burgeoning comedy scene, and Arabic language podcasts. As for Vision 2030, Andrew says he's heard rumblings of a revamped plan for the future, a Vision 2040.

Between the mixed track record for some big investments and the economic pressures from the Iran War, it's unlikely that the Saudis will try another experiment like live golf. This episode was produced by Julia Ritchie with engineering by Robert Rodriguez, was fact-checked by Vito Emanuel. Kicking Cannon is our show's editor, and the indicator is a production of NPR.

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