iStockphoto / Reinhold Matay-USA TODAY Sports
Bankrupt stamp over LIV Golf sign
On Thursday, LIV Golf officially waved the white flag after a deal to save the league from bankruptcy fell apart. That’s bad news for the people the organization was indebted to, as it’s currently only able to pay a tiny fraction of the more than $100 million it owed them before things fell apart.
LIV Golf found itself facing an existential crisis earlier this year after learning Saudi Arabia’s Public Investment Fund had decided to pull the plug on the venture midway through its fifth season.
The league was already struggling in its years-long battle to attract viewers and have a tangible impact on the golf zeitgeist, and while it had failed to provide any significant return on the billions of dollars that were poured into it, its players and corporate employees had been led to believe they’d have more time to try to work things out.
That did not end up being the case, as the members of that second group scrambled to find another deep-pocketed backer to help LIV Golf stay alive. It appeared they did exactly that after striking a deal with BC Partners to the tune of $300 million, although it was contingent on a bankruptcy proceeding that began to unfold in September.
However, things ended up imploding to the point where LIV Golf has entered its Extinction Era, which is not great news for the people who were hoping to reclaim some of the massive sum the organization owes.
LIV Golf only has enough money to cover 2% of the debts it owed before filing for bankruptcy
The agreement with BC Partners was contingent on a variety of stipulations linked to the bankruptcy filing, including a clause that gave the company the right to pull out of the deal if what was positioned as “LIV Golf 2.0” failed to attract a satisfactory list of players who agreed to move forward with the new vision.
Notable names including Jon Rahm, Tyrrell Hatton, and Sergio Garcia all announced their decision to abandon ship ahead of a deadline that passed without any significant commitments, and the lack of interest was one of the reasons LIV Golf informed the judge overseeing the bankruptcy case that it will be pivoting to a “value-maximizing wind-down” and entering liquidation during a hearing on Thursday.
According to Front Office Sports, the various debts LIV Golf owes to a wide variety of creditors total over $100 million, but it appears they are going to have some trouble obtaining anything close to that number when you consider the defunct organization has currently set aside a relatively paltry $2 million to settle the claims.
The outlet reports that nearly half of the 30 people and organizations who are owed the most money are golfers who signed the massive contracts that helped lure them to LIV Golf.
However, there are other parties that are also owed a seven-digit sum, including influencer Rick Shiels, who is theoretically entitled to $1.39 million, and the state of Louisiana, which still hasn’t gotten the $1.22 million it was supposed to receive in connection with a tournament that was supposed to be held in New Orleans in June before it was canceled.
There’s a chance the $2 million number ends up getting at least a little bit larger, as the creditors have the option to go after “the PIF, third parties, and LIV employees” in court. However, a lawyer who specializes in cases like this notes “there is likely to be virtually nothing to distribute to unsecured creditors.”
Bummer.