💰 Money talks...Jun 08, 2023
Today’s issue is going to be a little different.
The PGA Tour and LIV Golf chose to merge,
after 3 years of fighting and lawsuits.
I’ll tell you why you should care,
and how it’ll impact your wallet.
Also, if your business spends a lot on software, don't miss the "PS."
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Tuesday it was announced that the PGA Tour and LIV golf were merging.
Wednesday Rory McIlroy chalked it up to “Money talks.”
We don’t know exactly what the investment into the new entity will be, but it will be to the tune of “billions.” As the Saudi investment fund has $650 billion in assets, the number won’t be an issue for them.
But first let’s back up.
Last summer, LIV exploded onto the scene by offer golfers sums of money that had previously been out of their reach. Loyal players spoke poorly of LIV and aligned themselves with the commissioner of the PGA Tour, Jay Monahan. Monahan accused the Saudis of trying to buy the game of golf, suspended players who signed with the league (despite them being contractors), and grabbed arms with 9/11 Families United to admonish anyone aligned with LIV Golf.
In return, the PIF sued the PGA Tour and the legal costs were mounting.
Rumor has it the PGA Tour was hemorrhaging money and having to pull from their reserves. The hole got deeper as legal costs mounted and elevated events with bigger payouts (to try and compete with LIV) were launched.
So… after more than a year of shaming players who made the switch and taking the money, the PGA Tour and Monahan have chosen to take the money.
Jay has done a poor job offering an explanation other than saying “circumstances do change.” Yes they do Jay, yes they do. And the circumstance that’s about to change is the condition of your relationship with your players. They sure do change, Jayyyyy.
This whole saga was fascinating to watch over the last year or so and the outcome was something that I never expected.
But as I look back and reflect on all that happened, I reflected back on small businesses.
The truth is… it always comes down to money. But there are already other lessons we can learn as well.
Feelings don’t matter in business
I don’t believe Jay was lying or posturing the whole time. At the beginning, I think he believed what he was saying. He was hurt.
This happens in business too. They choose someone else for the contract. We get ignored at the event. We get overlooked in the ranking.
But when push came to shove for the PIF and PGA Tour… when they were backed into a corner… they set aside those hurt feelings and got a deal done.
Jay Monahan felt that the best for the PGA Tour was to accept the money. He knew it probably made him look like an idiot. You think he had to understand it could cause him to lose his job. But he did what he had to do.
Rory McIlroy acknowledged it was probably what was best for the tour.
Money doesn’t have feelings.
Money isn’t good or bad.
Money is simply a medium of exchange or tool you can use to get what you want.
We have feelings and we let those feelings cloud our judgment.
So, when it comes to making the hard decisions, we should always revert to the numbers.
Leave the feelings behind and try and reflect on the facts of the situation, not the feelings.
But messaging does
The players are mad. It’s said that the player’s meeting with Monahan later that day was extremely heated.
Even if the right decision was made, it was handled poorly.
Jay Monahan rallied the troops, got everyone speaking FOR the PGA Tour, then changed course and didn’t tell anyone until it was announced. Just so brutal.
The players are mad because they feel lied to, betrayed, and like sacrificial lambs.
And while you know Jay had to expect some backlash and expect questions about taking Saudi money… especially after coming out so hard against it… it boggles the mind to see him unable to answer when asked about it.
In the same way, your decisions hardly matter in business. Your messaging can often determine the quality of the decision.
Say you make the best business decision ever, but it’s the opposite of what you previously promised your team.
If your team won’t work hard for the new course, will the new course succeed? Often it won’t.
So, your ability to nail the messaging can often be more important than the decision.
This applies to your employees, but also external parties.
Some of the best negotiators are brilliant because they can clarify for the other person what they want and then get it for them.
The most important thing is not to make the right decision.
It’s to make the right decision and deliver the message in a convincing way to all parties.
Leverage is real. Use it and understand it… both sides of the equation.
As mentioned earlier, it appears the PGA Tour may have been hemorrhaging money.
When the PIF came into golf, it appeared the PGA Tour’s resolve was strong. There was no way this sort of thing would happen… until it did.
Rumors came out today that Jon Rahm, one of the top players in the world, was in advanced talks with LIV.
The PGA Tour was running on reserves.
The PIF lost their DP World Tour case in Europe.
At the same time, it appeared possible the cases could lead to disclosures the PIF didn’t want and if the PGA Tour was in financial and star power trouble.
Both had reasons to want to end the stand-off and the leverage from negotiations and lawsuits played a big part in the ultimate settlement of the cases and merger.
In your business, understanding leverage is a vital skill for any business owner. And I’m not just talking about money. I’m talking about positioning yourself in any negotiation to get the things you want when you want them.
Sometimes, money might be your last priority. You’re negotiating timing, quantity, quality… the list is endless.
You could be negotiating with an employee, vendor, or customer. Whoever it is, understanding:
- What leverage they have
- What leverage you have
- And how it’s changing
can make or break your business.
It’s why I’m starting a business with some friends specifically designed to help you succeed in negotiating your contracts. If you have software contracts of more than $100,000, simply fill out this form and we'll reach out to you. There is no upfront cost and we’ll get paid on performance… so there is no risk for you!
When you pair an understanding of leverage with the ability to craft a message, you become a master at getting the best outcomes for your business.
The outcome of the PGA Tour, LIV Golf, and PIF saga is still not determined. There are many more stories to come on this, I’m sure.
But for you and your business, it’s a masterclass in understanding positioning, leverage, and messaging.
But for now, I wanna go play some golf.
💰 In the craziness of COVID-19, one company stood above the rest: Zoom. While virtual meetings had been happening for years, the culture change of everyone going home meant that Zoom became an essential piece of software for all companies.
But today, the peaks of COVID-19 are gone and Zoom has come back down to earth. What happened, you may ask.
And while you’re reading, go ahead and subscribe. OnlyCFO writes great long-form content breaking down SaaS businesses. Whether you’re in that space or not, he’s a great person to learn from.
💰 Ever wanted to own a ghost town? A man in Texas is selling a ghost town, abandoned in 1991, for $100,000.
I’ve always been fascinated by this sort of thing and at one point got really interested in a YouTube channel “Ghost Town Living” who purchased a mining town near Lone Pine, California during the pandemic. He has chronicled his journey and it is a fascinating watch. Here is the first video where he intros the project.
💰 Don’t think Accounting is important? The Pentagon says using the wrong valuation method for new equipment resulted in a $3 billion mistake.
An audit revealed that they used “replacement cost” rather than “net book value,” which overstated the value of the equipment sent to Ukraine.
By discovering the error, the White House won’t have to ask Congress for more funding, which seems rather convenient. ;)
Thank you for reading!
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See you next week,
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