PGA, LIV merger tees up new era for golf and opportunities for athletes

PGA Tour recently announced a merger with Saudi-back LIV Golf, surprising many. Mark Patricof, Founder and CEO of Patricof Co, joins Yahoo Finance Live to discuss the merger and what it means for the future of golf.

DIANE KING HALL: Meantime, a big deal in sports and business has startled the world of golf. Yesterday, the PGA Tour announced a merger with the Saudi Public Investment Fund and the DP World. The golf landscape could see a lot of changes in the coming months. So too could the players.

We're joined now by Patricof, co-founder and CEO Mark Patricof, alongside Yahoo Finance's, our very own Josh Schafer.

So Mark, let's get right into this. There was certainly seemed like a big outcry with regard to this deal. They went from foe to friends and kind of a strange bedfellows. How do you take this?

MARK PATRICOF: Well, you know, I remember what James Carville said in the '90s around the Clinton campaign, "It's the economy, stupid." I mean the end of the day, this was all about money. I don't think it ever was anything else. And I think the you know, PGA was put in a pretty bad spot maybe they put themselves in that bad spot. They couldn't afford the lawsuits. They couldn't afford the growing purses.

And unfortunately, to some extent, they were in a position where they had very little option but to do this merger. And now, you have a global entity that will not have a lot of competition, obviously, but it won't have a lot of people to answer to either.

JOSH SCHAFER: And with the Public Investment Fund, I mean, how big do you think this could go as far as their investment into sports? It seems like this was their first successful, I guess, infiltration of a league. But I think the question kind of then becomes, they're trying to do it with soccer maybe a little bit. People have floated the NBA. Now, take sovereign wealth fund investments. I mean, where do you think this goes for what the PIF is interested in and sort of what they're trying to get out of it?

MARK PATRICOF: Well, PIF aside, you've seen private equity enter sports over the last couple of years. You saw Silver Lake do the deal with the All Blacks in New Zealand. You're seeing all kinds of things happening across the landscape of sports.

If they think this is the right way to enhance A, their reputation, sports watching, but B, just their ability to generate returns in a smart way and satisfy some other objectives they may have, they'll do it. And this is a big first move for them in terms of that kind of scale.

But look, there are also investors in Uber and Amazon we talked about. It's not the first time they've invested in national and global and US national businesses that are relevant.

DIANE KING HALL: Let's talk a little bit more about the backlash, particularly when it comes to some players. You have Rory McIlroy sounding off on saying, you know, he hopes it goes away. You had Tiger Woods ahead of this saying, talking about the Saudi league and criticizing them saying that the gobs of money is not a way-- I'm paraphrasing-- to create legacies. What do you think about how this will impact players

MARK PATRICOF: Well, first of all, we've seen just in general in sports, players have a much louder voice than they ever had before. You're seeing players become owners more frequently. You know Dwyane Wade bought a piece of the Jazz. You saw Brady buying a piece of the Raiders. This is a trend. Lionel Messi, he chose you know, Inter Miami instead of going to the Middle East to play.

I mean, the players have a voice, a louder voice. But at the end of the day, if there's only one organization, their leverage is minimized by the fact that if they want to get paid and want to play in the national circuits, international circuits, they want to be on television, this is where they're going to have to be. So that was the move.

I mean, look back to the USFL and the NFL in the '80s. Have Donald Trump involved the USFL. That was a move that they made. They split the talent in half. The end of the day, the USFL won in court, but lost on the field and ended up going away. This is sort of analogous to that to some extent, although the outcome for LIV was better than that of what it was for the USFL.

JOSH SCHAFER: Do you think people care in the long run? Do you think this is something that we're still talking about in five years in regards to the PGA Tour? Is it just become less of a story after a few years?

MARK PATRICOF: No, I don't think in five years, it will be relevant because people want to watch golf. They play golf. It's a great sport for that reason. People can participate unlike tackle football. So I think if that's the way-- if that's where you can see the greatest golfers in the world and that's where you can watch the greatest golfers in the world, you know, on television, that's what you'll watch. And the dialogue and the memorable kind of die down.

But there will be other ramifications. Sponsors, other companies that have taken in this type of money will have a point of view. And this is a really important kind of flag to them to figure out what it means.

DIANE KING HALL: We will certainly continue to watch this one because, you know, just there's been so much backlash about this. You wonder if there is any upside and what that is. We're going have to put a bookmark in our conversation, though. We appreciate you so much for joining in and--

MARK PATRICOF: Thanks for having me

DIANE KING HALL: --breaking this down for us. Our thanks to Patricof, co-founder and CEO Mark Patricof, alongside our own Josh Schafer.