The newspaper was publishedThe New York TimesIn early 2021, a report by journalists Alan Blinder and Sarah Hertz said advisers working for Saudi Arabia’s sovereign wealth fund considered it a bold idea; “Desert Country Wants to Be a World Leader in Professional Golf Courses for Men.”

If the concept sounds unfamiliar, records show that the criteria for success border on fantasy. The new Saudi golf league would have to sign 12 of the world’s best golfers, sponsorships for an unproven product, terrestrial TV deals for a low-visibility sport, and no major backlash against the PGA Tour if GolfLeaf wins.

The proposal, codenamed “Project Wedge,” was formed as Saudi officials worked to repair the country’s reputation abroad, which had tarnished after the 2018 killing of Washington Post columnist Jamal Khashoggi by Saudi agents. Former President Donald J. The project was the basis for a series called LifeGolf that was launched this year, sparking accusations that Saudi Arabia is trying to whitewash its human rights record by using the clubs of Trump and a handful of other dignitaries. Some golfers, like Trump, have publicly downplayed the seriousness of the Saudi abuses.

League promoters say they are trying to revive the sport and build a profitable league. But hundreds of pages of classified documents obtained by The New York Times show that Saudi officials say they face tough challenges. They are tapping into a sport with a dwindling and aging fan base – despite many wealthy and influential members involved – and even if they succeed, the profits for one of the world’s richest sovereign wealth funds will be relatively small. Experts say it shows Saudi Arabia, which has at least $2 billion invested in golf, has ambitions beyond money.

Simon Chadwick, professor of sports and geopolitical economics at Schema Business School in Paris, said, “The margins may be thin, but that doesn’t matter because then you’re establishing the legitimacy of Saudi Arabia, as a tour host or a sporting power, but legitimacy in the eyes of decision-makers and governments around the world.” .

The documents provide the most complete picture to date of the financial assumptions underlying Life Golf. One of the most important was prepared by consultants at McKinsey & Company, who have been advising the nation’s leaders since the 1970s. McKinsey, which has worked to raise the profile of authoritarian governments around the world, is a key part of Vision 2030, Crown Prince Mohammed bin Salman’s plan to diversify the country’s economy and turn it into a powerful global investor. Worldwide sport has become a pillar of that plan, and Saudi officials have discussed the possibility of one day hosting the World Cup.

McKinsey, which declined to comment, said it analyzed the financials of a potential golf league but made clear in the report that it had not considered whether it was a strategically viable idea. McKinsey added that many of Saudi Arabia’s assumptions were taken lightly and were not challenged in our assessment.

Indeed, the Leaf Golf Project is far from achieving the goals outlined in the Wedge documents. After an inaugural season that cost more than $750 million, the league has not announced any major broadcast or sponsorship deals. Instead, hopes of an agreement with the PGA Tour were dashed by a bitter court battle.

Moreover, the league doesn’t fit all the elite players Saudi advisers say it needs for success. In one slide, the partnership of Tiger Woods, Phil Mickelson and Rory McIlroy, who have won 25 major championships — as predicted by McKinsey in one of its most optimistic economic forecasts — is included under the heading “You have to believe.”

Of these stars, only Michelson joined Life Golf with a deal worth at least $200 million.

Woods was seen as essential, with the ability to attract fans and sponsors. According to Greg Norman, the Leafs’ chief executive, the league found Woods to be one of the biggest public contenders, even though the league offered Woods a long-term plan that would get him “roughly” $700 million to $800 million.

“I don’t know what their game means,” Woods said of Leaf last month in the Bahamas, where he hosted a tournament on the PGA Tour schedule. Woods acknowledged that the PGA Tour “can’t compete on the dollar” with the Saudis, but said an “endless money hole” is not a sure way to “create a legacy.”

Shortly after Woods’ speech, the Leafs announced details of many of the 14 tournaments expected to form the basis of next year’s $405 million prize pool, in addition to the guaranteed payments promised to players. She said she would release her full schedule “in the coming weeks.”

The season will unfold as Liv’s business transitions to its planned franchise model. While professional golf has some signature team events, such as the Ryder Cup, the PGA Tour generally relies on players competing for themselves. Leaf League, whose music-filled gatherings look like traditional tournaments, is betting fans will love seeing dozens of four-player teams compete against each other.

“Live has repeatedly made clear that our partners take a long-term approach to our business model,” Liv spokesman Jonathan Grella said in a statement. We are delighted with the success of our year of beta testing. “We are confident that the remaining parts of our business model will come to fruition as planned over the next few seasons. Our business plan is built on a path to profitability. We’ve got a pretty long runway and we’re taking off.

The country’s 37-year-old de facto ruler, Prince Mohammed, is often drawn to flashy projects and has repeatedly said he sets sky-high goals in hopes of inspiring officials to achieve a piece of them. In its analysis, McKinsey called league golf “a high-risk, high-reward endeavor.”

Advisers outlined three possible outcomes for a franchise-led league: collapse as a startup, “co-exist” with the PGA Tour or, more ambitiously, seize the mantle of dominance.

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In the most successful scenario, McKinsey expects revenues of at least $1.4bn a year by 2028, with EBIT of $320m or more. (Federal records show the PGA Tour, a tax-exempt nonprofit, had revenues of about $1.5 billion and net income of about $73 million in 2019.)

In contrast, a league mired in start-up mode – attracting less than half of the world’s top 12 players, suffering from a “lack of fan enthusiasm”, limited sponsorship and facing a “severe backlash” from the golf community. “—expected to lose $355 million before interest and taxes in 2028.

Now, Levin’s level is steeply tilted in this way. Its tournaments have not attracted large crowds and broadcasts have been limited to YouTube. The PGA Tour has suspended players who defected, and it is not yet clear whether the organizers of the four major men’s tournaments will allow LIV players to participate.