From the WSJ:
When LIV launched a year ago, it brought unprecedented money into professional golf. The $25 million of prize money it offered at its regular-season tournaments was a record high. And to further induce top talent such as Phil Mickelson and Dustin Johnson to sign on, LIV offered enormous appearance fees, some of which reportedly exceeded $100 million.
Monahan bluntly stated last year that “if this is an arms race, and if the only weapons here are dollar bills, the PGA Tour can’t compete.” But as LIV continued to pick off top golfers—it announced Brooks Koepka as an addition during the same press conference last June when Monahan uttered those words—the Tour participated in that financial arms race anyway.
UPDATE from Truth on the Market:
Some regulators will have a knee-jerk response that the merger of PGA and LIV would create a monopoly that will make many worse off than if the two organizations competed against each other.
But, this is the wrong way to look at it. Before LIV entered less than two years ago, the PGA was a monopoly with which few people (mostly just Phil Mickelson) had a problem. Would rolling back the clock a couple of years really impose irreparable harm? I doubt it.
Instead, it seems just as likely that the merged organization will incorporate the lessons it learned from their “LIVed” experience. Payout pools may drop relative to last year, but there is no evidence that those high payout pools were sustainable.
In other words, the bidding war for top golfers caused by LIV's entry may be unsustainable. If so, the apparent high prices are temporary. If profitable entry is unsustainable, then the merger would have no long run effect.
Reminds me of an old joke:
- QUESTION: How many economists does it take to screw in a lightbulb?
- PUNCHLINE: None, the Market will do it.