Two weeks out from its UK swing, LIV Golf has still not resolved its funding issues.
Saudi Arabia’s Public Investment Fund said in their infamous April statement that they would withdraw funding at the end of the season, but questions have arisen whether LIV will stumble on for that long.
PIF is reportedly funding LIV via loans, not equity. That means that if and when new investors come in, they will also be obliged to pay back the Saudis.
Both Chapter 7 and Chapter 11 bankruptcy remain possibilities as LIV CEO Scott O’Neil – who last week likened the experience to having a piano on his chest – frantically searches for fresh investment.
LIV is reportedly looking for around $300m in capital, which could come from a single investor or a much larger collective of private equity firms, family offices and high net worth individuals.
LIV apologists insist their revised plan for a scaled back, less financially bombastic iteration of the tour is commercially viable and can be profitable in two years.
Now, new bait is being dangled in front of would-be investors as O’Neil looks to boost LIV’s survival chances.
New LIV investors can benefit from tax advantages
The extent of PIF’s funding of LIV is no state secret.
The sovereign wealth fund has plunged over $5bn into the rebel tour and is now divesting amid a change of investment strategy from the Gulf nation.
But the very fact that LIV has lost billions over the last four years could actually be a positive for new investors.
Industry sources have told HITC that O’Neil is pitching to investors on the basis that, because their accumulated losses are so large, they will be able to carry forward the deficit for years with major tax advantages.
In the US and the UK, corporate profits are taxed at 21 and 25 per cent respectively.
With the right mix of investors and a more restrained approach to prize purses and player contracts, there is every chance that LIV can be a commercial success.
But there are umpteen hurdles left to clear before the rival to the PGA Tour can even get close to that position.
- READ MORE: Jon Rahm responds when asked if he could put his own money into the prize funds on LIV Golf in 2027
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