Inside LIV’s $8.5 billion demise

The answer is obvious. In April, the Saudis decided to cut the cord and stop the funding. LIV – or LIV 1.0, as it is now known – was effectively dead.

War in the Middle East and the resulting economic downturn was blamed. Suddenly, the Saudi Public Investment Fund’s (PIF) shifting investment strategy no longer aligned with the long-term capital LIV required, with no guarantee whatsoever of success.

In February, Yasir Al-Rumayyan, the PIF governor and chairman of LIV, who had always told the players “this is my baby”, assured the pros the league would be funded at least until 2032.

Two months later, he told Scott O’Neil, the LIV chief executive, to shut up shop. Except, it was not H.E. – His Excellency’s nickname on LIV – who spoke to O’Neil, but one of his minions. “Golf But Louder” was being unplugged.

But O’Neil, the former chief executive of the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils, refused to perish silently and convinced H.E.’s henchmen to stay the execution. So PIF agreed to fund LIV through the rest of the 2026 season. It sounded straightforward enough, a cushion on which O’Neil could rest his weary brow as he sought to attract new investment to make LIV 2.0 a possibility for 2027 and beyond.

Alas, O’Neil knew it was anything but.

There would be a finite sum from PIF, a portion of which would have to be used to frame the restructuring proposals, bring in experts in such matters at considerable cost, and to go to market to locate a saviour. And the Saudis would not be paying all the bills and leaving the ledger clean and fit for service. They were washing their hands of LIV seemingly without any contrition or sense of responsibility.

In the ensuing excruciating four months, O’Neil recognised he would have to eat dung as far as the Saudis were concerned and carry on praising their foresight as he brazenly swaggered through the rubble and projected extreme confidence in the after-LIV. But he was doing so with his hands and feet enchained in debt. Substantial debt. And the main problem was that the majority of LIV’s liability was with the players, the individuals who held the key to any possible survival. LIV owes US$45m ($77m) to players in unpaid compensation and hundreds of millions in future contract guarantees.

“It’s like being a farmer and no longer having any food to feed the thoroughbred cattle,” one pro said. “Of course, the players have all earned millions and could take a hit in the wallet for the LIV team. Good luck with that. We all left the PGA Tour and DP World Tour for the money and the easy life. This might surprise you, but professional golfers are in it for themselves. Unless O’Neil can find another investor like the PIF, there will be an exodus.”

The golfer spoke at LIV Virginia in May, the first event since PIF confirmed it was turning off the golden taps. It was a strange atmosphere in Washington DC. There was hope in some quarters, with Ian Poulter typically effusive. “This is a big opportunity for LIV 2.0,” he said.

There was also a smattering of gallows humour.

Billy Foster, the celebrated veteran caddie, was looking forward to joining LIV and not just because of the US$30m ($51m) purses and the subsequent percentages, which have set up plenty of his fellow bagmen for life. “With my knees, 54 holes will be great,” he said, when linking up with former boss Lee Westwood.

As soon as he had put on the bib, O’Neil announced he was changing the LIV format to 72 holes and soon the Sheikhs were rattling and rolling their way out of the picture. “I’m a bloody jinx,” Foster said.

There was not an overload of laughter, however, as the scale of O’Neil’s challenge became increasingly apparent. Who would invest without the superstars? Who would stump up hundreds of millions without Jon Rahm? The Spaniard is reportedly owed upwards of US$100m of his US$300m signing-on fee from 2024 and with Bryson DeChambeau’s contract up this year, it was immediately clear that Rahm would be the focal point of the player upheaval.

At that Virginia event, Rahm was asked whether he could get out of his contract if he so wanted. “I’m not a lawyer, I couldn’t tell you,” he said. “As of right now, I have several years on my contract left, and I’m pretty sure they did a pretty good job when they drafted that. So I don’t see many ways out.”

Jeff Koski, Rahm’s manager, looked furious and berated a fellow journalist who dared to ask Rahm an innocuous question as he made his way back through the media centre from the interview stage. Rahm’s contract and its restrictions or otherwise were at the heart of the saga and he would be questioned about it repeatedly. In some respects, it became a game of brinkmanship, with Rahm abandoning his candour in Virginia and refusing to expand on the details of his deal or his intentions.

Probably wisely, he has not said anything that the LIV lawyers could interpret as being negative about his contract. That included when LIV cancelled two events – in New Orleans in June and last month’s season-ending team championship in Michigan. The funds had run out. Rahm also kept his counsel when the Asian Tour pulled out of its partnership, leaving LIV stranded and with dubious status when it comes to world ranking points for its players.

He said nothing about the ongoing demise when the DP World Tour informed Rahm and Co there would almost certainly be no repeat of the 2026 deal which allowed them to play without bans or fines. Rahm simply repeated that he was contracted to LIV.

As recently as Tuesday, a matter of hours before LIV revealed it had filed for bankruptcy, Rahm was still diligently keeping his bat square. “I still have a contract with LIV 1.0 that I’m more than willing to fulfil,” Rahm told BBC NI at the Irish Open, where he is playing this week.

Note the “LIV 1.0” reference. The truth is, insiders have been certain that as soon as Rahm’s camp feels it can deem his contract void, he will be off. Last month, Telegraph Sport reported that LIV execs were “almost” resigned to Rahm leaving.

Going into bankruptcy brings everything to the brink. The LIV legal team has asked the court in the Chapter 11 proceedings to reject existing player agreements. O’Neil has told LIV players this is simply procedural, but for many it will be the game-changer – and the Tour-changer.

Tyrrell Hatton will follow Rahm and so will many more. Then it will be a matter of where they land. Rahm and Hatton can play on the DP World Tour until the PGA Tour offers routes back to their circuit – and Ponte Vedra might play hardball for a year to appease those members who stayed loyal – and this will be a popular option.

If BC Partners, a London-based equity and credit company, does choose to fund LIV into 2027, then there will be 10 events, with purses a third – and under – of what they were previously. That is after picking through the bankruptcy fallout.

Within the filing, there is another hidden, ticking time bomb. LIV has been given just 35 days by BC Partners to sign up a “requisite” number of players for LIV 2.0, as well as reach agreements with two-thirds of its unsecured claimants. Fail to do so, and the proposed investment of US$300m ($513m) stands to be withdrawn.

DeChambeau is intent on staying, and one DP World Tour official said: “He would see this as exclusively being his circuit to drive his internet celebrity.” Yet it might be difficult to retain much quality as O’Neil enlists 75 players for an opening event mooted to be in Mexico in February.

Everything will be stripped down. The overwhelming majority of LIV staff have been made redundant and those re-employed accept that it will be unrecognisable from the opulence of the original incarnation. That is what happens when you go from the court of Bacchus to the court of bankruptcy in less than six months.

Many old staff have moved on, anyway, and some have said there is a lingering bitter taste, not least because of a Zoom call two weeks ago in which O’Neil read from a teleprompter, in an eight-minute meeting with no questions, to advise of the mass redundancies.

They had seen colleagues on freelance contracts go unpaid for months – as the players continued to play for US$30m ($51.3m) prize funds – and although some eventually received what they were owed at the end of last week, others have not. Telegraph Sport spoke to one contractor on Tuesday morning who has not been paid since May and has had to sell their car to get by. They wished to remain anonymous, in the hope that they could still get something.

Alas, they will be on the creditors’ list, which will amount to pennies on the dollar. That list makes interesting reading, with Rahm at the top, of course. He is owed roughly US$8m, but this is an unpaid claim – for the third quarter of 2026 – rather than the total value of his contracts. Hatton is listed at US$3.3m, and intriguingly Brooks Koepka is due US$1.6m. That is to a player who effectively paid to leave LIV to return to the US circuit last year.

It is a mess, and lawsuits against the PIF will soon be in motion. In the wider picture it has been a salutary lesson in extravagance and when one spots that Rick Shiels, a YouTube golfer, who never hit a competitive ball for LIV, is in line for US$1.4m, it is possible to envision the largesse of LIV 1.0. “Unlimited money”, as President Trump once crooned about his Saudi friends and their beloved golf tour.

But then, another creditor stands out. The United Nations High Commissioner for Refugees is owed US$1.7m. In 2024, LIV pledged US$10m to assist up to one million forcibly displaced people across Africa, Europe and Asia by funding access to sport and education. LIV billed it at the time as a “landmark agreement” which proved the league’s commitment to be “an inclusive force for good”.

The UNHCR is just another name on the LIV docket now. Stand in line.