LIV Golf – No. 1 Thing Everyone Should Be Talking About

Lawyers at Brown Rudnick are hyper focused on brand and reputation management. It’s one of the things that sets us apart from other law firms. Also, many of us happen to be avid golfers. That’s why when LIV Golf burst onto the scene in 2022, we were immediately intrigued by the fact that the organizers chose a growth model through franchising, a model that is a clear differential from the PGA Tour. However, as seasoned franchise lawyers we also noted challenges LIV may face as a new entrant, with no historical brand recognition.

LIV is going all-in on winning over the hearts and minds of an entire fanbase. LIV is what some economists call a low-end market disruptor, which is new business that doesn’t create new markets, but just gains market share against the old.[1] LIV recognized it needs to differentiate itself from the PGA Tour, and the league's franchise/team component (it believes) is its best selling point. LIV is hoping that the franchise model will sustain the tour.  

In pre-industrial times, branding served to identify the ownership or source of an item, such as the brands burned into livestock by ranchers to identify their cattle. Then industrialized companies began selling mass produced goods and realized that branding served an important purpose beyond source identification – generating familiarity and loyalty in a customer base situated far from the factory and which until then was used to purchasing only local goods which typically were not branded. Among the first brands to appear were Coca-Cola, Wrigley's Juicy Fruit gum and Quaker Oats.

Today, branding has progressed to convey not only the source and identification of a company’s product or service, but also to generate an emotional relationship and response in consumers. Branding is a process of shaping the perception people have of a business. It’s more than just a logo, jingle or color scheme. It’s everything consumers know (and think they know) about a business and the experience they perceive they will have. A strong brand raises consumer awareness and loyalty, which increases demand for more franchise locations, thereby increasing the value of the system. Some large brands regularly update their logos, mottos and branding so these changes must be rolled out to all franchises.

LIV made a concerted effort to target the PGA Tour’s events through three events in 2023: in Mexico (Feb. 24-26), Tucson (March 17-19) and Orlando (March 31-April 2). While the early numbers weren’t great for LIV, the PGA Tour saw year-over-year declines for two of those events, with the final round broadcast of the Valero Texas Open (-22%) and Honda Classic (-8%) both down, going up against LIV Orlando and Mexico, respectively.[2] However, the final round of this year’s Masters Tournament was the most-watched golf event on any network since the 2018 Masters, totaling 12.06 million viewers, a 19% increase over last year.[3] Though Brooks Koepka was unable to hang on to the 54-hole lead at Augusta, losing by four shots to Jon Rahm, Phil Mickelson and Patrick Reed finished inside the top four at the year’s first major. In all, 12 of the 18 LIV players in the Masters field made the cut. 

We believe there is a universe where the PGA Tour and LIV can co-exist in this fractured professional landscape. LIV hopes a franchise model is the key to its long-term success. Still, it can take some time to refine a good franchising model. Brand equity is something you have to build – it does not happen overnight. It takes time to nurture and grow a popular, recognizable brand. It is usually the difference between success and failure for start-up franchisors. LIV may have a hard time selling franchises where they haven’t yet created an established brand. Some prospective franchisors see the potential of their concept, and they think franchising their business will magically take a brand with no history to the next level. It’s not the case. Time will tell whether LIV can succeed with a franchise model.  

[1]  Cote, Catherine. “What Is New Market Disruption?” Harvard Business School Online, 6 Jan. 2022.

[2]  Carpenter, Josh. “PGA Tour's Designated Events Paying Off For Broadcasters.” Sports Business Journal, 12 April 2023 (citing a source with numbers from Nielsen which are based on average-minute audience; the industry standard).

[3]  Id.