What has happened to LIV golf?
The breakaway golf tour, , billions of dollars of investment and a string of the world's best players, in 2021. But on Tuesday it filed for bankruptcy protection in the US.
Bankruptcy protection is a way of keeping a company alive while it restructures its debts. In this case, LIV would be moving from being financed by , to being supported by BC Partners, a British investment firm.
"This process gives us the structure and time to pursue a landmark transaction and begin the next chapter of LIV Golf," said the chief executive, Scott O'Neil.
According to documents related to the filing, LIV Golf has between $500m (€430 million) and $1bn in estimated liabilities to at least 1,000 creditors. This includes an estimated $45 million to a group of top players like Bryson DeChambeau ($5.7m), Jon Rahm ($7.5m) and Dustin Johnson ($5.7m).
O'Neil added that LIV intends to move towards a "player-first ownership model" but detail is thin and there is currently no schedule in place for 2027. Most of LIV's staff were laid off earlier this year.
What has caused LIV golf to go bankrupt?
The sudden withdrawal of the PIF, which had invested an estimated $5 billion in LIV Golf, is the over-riding reason. At the time, the PIF said that LIV Golf was "no longer consistent with the current phase of PIF's investment strategy. "
This was considered evidence of the project's failure to overthrow the established PGA Tour or make much in the way of money or impact. While the huge prize money on offer lured away several big names, many more remained with the PGA Tour.
While Tuesday's legal move may buy LIV time, the withdrawal of Saudi funding was so key to its business model that it gives O'Neil few options. To survive, it seems, they must keep at least some of their big-name players while slimming down dramatically.
