PGA + LIV: How a Merger is Shaping the Future of Golf — One That Could Benefit Topgolf

Paddles down. It’s time to brush off that dusty golf club.

On Tuesday, two of the largest golf tour organizers — PGA Tour and LIV Golf agreed to an industry-moving merger — with “immense potential to elevate the sport of golf to new heights,” per Jefferies analyst Randal Konik (BBG).

Golf has been filled with controversy in recent years. In 2021, LIV was formed and financed by Saudi Arabia’s sovereign-wealth fund.

• It was controversial given the Saudi’s alleged role in the 2018 assassination of American journalist Jamal Khashoggi.
• So controversial that pro golfer Phil Mickelson called them “scary mother f–s” (but he still signed with LIV in a $200M deal).

Many thought LIV was dead on arrival — but that turned out to be wrong, thanks to large cash prizes and player incentives from massive amounts of Saudi money coming in.

The merger ends a dispute between the two. LIV lured athletes away from PGA with millions of dollars. Players who joined LIV were banned from playing in PGA tours — leading to a series of lawsuits.

Grip it and rip it

Golf received a pandemic surge in popularity but has since slowed. And the merger could be just what the sport needs to keep its momentum in the long term:

• “This collaboration creates a more vibrant golfing landscape attracting new players, sponsors and fans.”
• Pools resources, capital and expertise to bring more attention to the sport.
• The Saudis are expected to pump billions into the organization, ending lawsuits between PGA and LIV.

And more interest brings more golf equipment sales. That’s made Konik bullish on golf equipment maker and driving range operator Topgolf Callaway Brands (NYSE:MODG) with a price target of $56 (nearly 200% upside).