The PGA golf tour is facing an existential threat from an incredibly wealthy competitor. The LIV golf tour out of Saudi Arabia is shaking up the world of golf with massive payouts, new rules, and an aggressive approach. We look at the PGA’s initial response and explain how it is doomed to fail unless they innovate. We also look at other classic business wars like Pepsi vs. Coke, Apple vs. Samsung, and of course, professional wrestling as analogs for any business. When faced with a competitive threat, do you become more creative or do you whine and give up?
Watch the episode here
Listen to the podcast here
How To Respond To A Competitive Threat
Frankie, this was an incredible episode. I cannot wait for people to read it. We’re done recording our episode about why companies innovate, and we used the example of the PGA Tour and the LIV Golf tour and compared it to a number of analog examples in the past with the beer wars and the Pepsi-Coke wars. We also talked about Apple and Samsung. This was a fun episode. What are people going to take away from this?
What we’re going to show you is this is not new. We’re going to use some sporting examples as well that is very similar to what’s happening with the PGA and LIV. What happens in every instance that Ian and I have drawn in this episode is you’re an upstart at first. You forget what got you there. You get fat. You get lazy. If you don’t innovate, you go away.
What I think you can use as an employee or as an employer is you look at your business or resume and say, “How do I innovate? How do I get better?” That’s the takeaway with this. We’re going to use some fun examples to show you that if you keep yourself accountable or see this new young kid that graduated college and you’re afraid he is going to take your job, how do you innovate? How do you get further? How do you stay ahead and drive? That’s what we think we’ve accomplished in this episode. We hope you enjoy it.
Frankie, when was the last time you’ve been golfing?
Is Topgolf included?
We did the Putt-Putt in my driveway. It was a lot of fun.
You are golfing way more than I thought.
One of my sons didn’t even wear pants. It was perfect.
There is another question I’ve got for you. How many football games per season do you think you watch?
College and pro? A ton, especially because we have the RedZone channel and because of our incredibly high-stakes fantasy football league of four teams. I watch a ton of football. The TV’s probably on for eight hours a week for football. With little kids, it’s hard to sit and watch. You pop in and out, but it’s constantly on.
It’s fair to say that on a typical Saturday or Sunday in the fall, you see some football. It would take an extraordinarily busy schedule for you to miss some bit of football on a Saturday. There’s usually some game that you’re like, “I got to see some of that.”
Thursday, Saturday, Sunday, and Monday, there’s football on 95% of those days, at least for a couple of minutes, unless it’s one of these games that the NFL has on ESPN on a Monday. More often than not, I’m turning those on.
My next question is, when is the last golf tournament you can remember where you thought, “I have to see all four days of that. I’m tuning in. It’s going to be on the entire time.”
I’m a Tiger Woods fan. He’s the same age as me. I grew up watching him. I remember we were in Florida, Eli, my wife, and me. We went to a bar in Lauderdale. Tigers was off. He went on Thursday. He was super low. We’re like, “He’s got a chance.” On Friday, we go back, and he did okay. On Saturday, he was twelve over. I don’t remember the exact number. Quickly, it tuned off. Ever since Tiger has not been relevant, I tried to watch the British Open, and I struggled. Even with Rory up top, which I think is great, it doesn’t compel me to watch.We figure out who our competitors are down here and we have to level the playing field with them. We can't play with them and we can't take big punches because we could punch so hard we fall. What we do instead is get really focused on what we can… Click To Tweet
Is it fair to say that if Tiger Woods is not in contention or golfing in the tournament, you’re not paying attention?
If it’s not a major and he’s not in, there’s almost no desire for me to see it.
I’m about the same. If Tiger Woods is in it, I’ll pay attention because I know him. I almost never watch Thursday, Friday, and Saturday. Normally, I’m like, “Let me know who’s in contention on Sunday, and I might watch a little.”
Who are the bigger names? Who do you think is a bigger name in golf?
Brooks Koepka and Rory are going head to head.
Keep going. Who else?
Scottie Scheffler is a big name, but he doesn’t draw me at all. I don’t get excited when he competes.
Who else? That’s the problem. Most of the names are led with um. There’s nobody compelling. There are not a lot of stars or people who are over the hill. With the people that I talk to about golf, do you know who they’re excited about?
It’s Tiger Woods’ son, who is twelve. When he goes pro, I might not even have eyesight by then.
Those are the only two golfers that IJ knows, my son. He knows Tiger Woods and Tiger Woods’ son. That’s only because a bunch of videos of the two of them are going viral all the time about how similar they look. That’s a good enough intro to say both you and I love sports and we’ll drop anything to watch a sport that’s compelling, whether it is a compelling series or game.
I don’t watch NBA during the regular season, but if there’s a good series in the playoffs, I watch the games. I’m going to watch a baseball playoff series if the Dodgers and Yankees play. I guarantee you’ll be turning those games on in October 2022 because they’re laden with stars. They’re tradition-based. Baseball’s a better product in the regular season.
I have a better question for you. Is there anything else you’d watch over football, regular season to regular season?
Probably nothing on football unless it was a big heavyweight fight, and it was two names I know, which is very rare.
They’re usually at 10:00 PM on a Saturday, so they don’t compete with the NFL. The point is this. When golf was at its absolute peak or when Tiger was at his peak in the early 2000s, I would turn off Sunday football to watch Sunday golf. I will no longer even contemplate that. I’m moving into a new office, and I’m concerned about, “If I’m in there over the weekend, will I be able to put football on?” I’ve never once thought, “Hopefully, I can get a golf tournament.” Several years ago, I would have thought, “I need NBC or CBS, or wherever Tiger’s going to be golfing because I’m going to want to watch that.”
This leads us to the topic that we’re talking about. These professional golfers are sanctioned and play under a league called the PGA, the Professional Golfers Association, which is headquartered in Frankie’s old stomping grounds down in Southeast Florida. They’ve been the only game in town for decades. If you want to play professional golf, you’re going to play in PGA-sanctioned events. Their claim to fame is the big four majors, The Masters, which is in Augusta, the British Open, which is now called The Open, that Frank was talking about, and the US Open. What’s the fourth? What am I missing?
The PGA events. There are four big ones. There are lots of other events, but those four are the only ones to bring all of their best golfers together every time.
Those are called The Majors.
The PGA is facing an upstart. I call them a startup, but they’re probably the most financed startup I’ve ever heard of in my life. It is a new golf league called LIV Golf. The name is a take-off on Roman numerals of 54 being that they only have 54 holes in their events versus 72 in the PGA events. That’s also the number that if you birdied all of the holes of the 72, that’s the 54. That was what they based it on. Their first tournament was in June of 2022. The difference between this league and other upstarts that we’re going to talk about in this episode is this is a foreign-based league that is financed by the sovereign wealth fund of Saudi Arabia.
We’re going to get into that a little bit. The sovereign wealth fund of Saudi Arabia is backed by hundreds of billions of dollars of oil money. No one even knows how much money they have, but it’s safe to say they won’t run out no matter how much they spend on stealing golfers from PGA. They will never run out of money. That is a big threat that the PGA is facing. There is a ton of noise around this LIV tour because LIV has come in and started snatching some very big names away and doing it in a way that they’re paying money that these golfers have never seen in their entire lives.
I don’t know if that’s a segue for me to say something because all of that’s true.How do you turn a threat into a motivator? Click To Tweet
Some of the names that they’ve stolen away, which are big names that Frank and I know, are Sergio Garcia, Lee Westwood, Dustin Johnson, Brooks Koepka, and Bryson DeChambeau. These are all big names. Frank and I know a lot of these names because they’ve been good for years. The one thing they’re not doing is getting the young talented ones. There are a few reasons for that.
Here is an example of the kind of money that’s getting thrown around. Dustin Johnson has won a number of Majors. He is a very big name in golf. He is probably past his prime or peak years, but it doesn’t mean he can’t win some tournaments. He has won 24 times on the PGA Tour, and his total earnings since 2008 are $74 million.
In June of 2022, he announced his resignation from the PGA Tour. Part of that reason is that the purses for the tournaments that LIV is holding are in the magnitude of five times as much as a typical PGA Tour, even Major. These tournaments offer up to $30 million for the winners, the top ten placers, or the teams that come out of it. It’s not exact, but apparently, he was paid $150 million to agree to go play. It was a signing bonus where you had to play a certain number of events. Let that sink in. It has been fifteen years of grinding his ass off. He has won 24 tournaments and has played in hundreds of tournaments to make $74 million and was offered $150 million at the back end of his career, not in his prime days, to join a one check. That’s an insane amount of compensation.
Is this not like the lottery system in the United States? This is a lump sum. This isn’t an annuity.
Let’s pivot into this stuff. The reason that people lived over LIV is that it’s Saudi Arabia. The only person who’s had an honest take is Charles Barkley. Charles Barkley is getting wooed by this because he is a huge personality. He mostly spends his time inside the NBA. He’s a former NBA superstar. He is one of the best 50 or 75 players of all time. He is called The Round Mound of Rebound. He is one of Ian’s and mine’s absolute favorites. He is a degenerative gambler as well and has had fantastic stuff all around.
He is also an incredible human being.
He said, “I’m up for bid if they want to hire me to be a TV announcer.” One of the best TV announcers, David Feherty, left CBS and went to LIV. The numbers are coming out. There are so many examples of this over time, but the best example I can give you of this is the Wright Brothers. The Wright Brothers were determined. They were like, “We’re going to figure out flight before anybody else.” They’re bicycle makers from Ohio that only worked on this seasonally, but they worked their asses off for a handful of years where there were all these incredibly well-funded places that wanted to cheat the system and figure out how to do it.
The US government was paying tons of people, but the people who ultimately won were the upstarts. History will show you over and over again. It usually goes to the upstart in the long-term. People will show up and they’ll try to pay money and lure people in from a top-down approach versus a bottom-up approach.
The reason I bring that up is Barkley sees this, and he’s like, “I’m for hire.” There were a bunch of blowbacks. Charles Barkley is fantastic at being honest. He goes, “This is selective outrage. If you work in sports, we’ve all accepted blood money.” That’s the big thing about this. We’re like, “We’re backing Saudi Arabia. Saudi Arabia used to be our friend and they’re not our friend.” It’s been back and forth a bunch of different times. Terrorists from 9/11 we’re all from Saudi Arabia or funded in some way from there. There’s all this outrage about Saudi Arabia, but that’s BS. That’s what Ian and I are going to talk about a little bit with LIV. There’s an old oligarch in the PGA who doesn’t want to lose their position on the top of the throne. What they’re doing instead of innovating and moving forward is they’re throwing a bunch of slurs out there to drive down the value of this upstart.
Let’s go ahead and say Saudi Arabia has a terrible record for human rights. They assassinated American journalists while they were over there. They’ve harbored terrorists. There’s a lot. If you go to the website of the US Department of State on their website and look at Saudi Arabia, if you want to visit there, the US government calls Saudi Arabia a great friend and trading partner. They’re not on a banned list. They are considered a partner by the United States. To say that America has a perfect record of human rights is ridiculous. You don’t become the most powerful government and military in the world without doing some dirty work behind the scenes.
I’ll give two examples quickly. Pictures finally came out from Guantanamo Bay. 9/11 was an atrocious thing. We needed to do some very serious stuff to say, “This is not allowable.” The pictures of Guantanamo Bay have come out. These people are emaciated. It’s rough. I don’t know how great our record is with this.
Imagine you’re Ayman al-Zawahiri. You’re sitting on your back porch, scratching your balls, drinking your morning coffee, reading the paper, and then hit with a drone. He was 1 of the number 2 guys at Al-Qaeda. I’m saying this sarcastically, but we dropped the drone on a dude, in my opinion, who deserved it. At the same time, if we’re going to weigh the scales here, let’s weigh them in a way that’s fair.
I don’t think this has anything to do with military might or ethics. It has everything to do with money, and there are things being thrown at it. We’re going to talk about TikTok at one point. We’re like, “This is China spying on us,” which we’ll get to, but it isn’t the argument. The argument is we don’t want to lose power over something so we’re going to take the easy route, which is trying to insult it.
This is all lobbying. The PGA has hired lobbying groups to try to brand the LIV tournament. They’re trying to shame their golfers that if you go over there, you support human rights strategies. What I would say is no one ever says that when Canadian and US hockey players go play in Russian leagues. The last I checked, Russia doesn’t have a great history of human rights.
I was checking and Brittney Griner is still in jail.
No one said when LeBron James went and played in some tournaments in China. No one said a word about that. China has a miserable record of human rights. No one says anything when our soccer players go down and play in Venezuelan leagues for Venezuelan teams, Cuba, or Brazil. No one says anything. This is all getting a lot of noise because they’re kicking PGA Tour’s ass. They are stealing a ton of good people.
It’s not like a start-up coming in. Let’s take the NBA and the ABA or the NFL and the AFL. They were upstart leagues that came up. They were trying to fund themselves. They were startups. They had to become profitable. If Amazon saw you were doing well and you didn’t have intellectual property, they come in and are like, “We’re going to spend money until you run out.”
They were like, “We’re going to outspend you. We’re not going to go bottom-up. We’re going to come top-down. We’re going to spend to lure you away.”
For me, LIV is like Amazon. Amazon doesn’t necessarily need to innovate to beat you. They’re going to bully you out of business. It’s like a big home builder coming in and buying lots of expensive prices and then losing money for a while until the market has flushed out the small guy. That’s why the PGA’s frustrated. The PGA is saying, “We have to make a profit, but you don’t, and that’s not fair.” That’s life. Google does this to people all the time. Apple does it to people. Amazon does it. That is the benefit of stacking up a lot of cash. You can come in there so PGA, to fuss the gorilla, has got to figure out how to be a startup.
Let me interject this quickly. Ian and I used to work for a publicly traded builder, Ryan Homes. We were going with our data scientists through who’s the biggest buyer in our marketplace. We do a ton of deals. They’re several hundred deals a year. Guess who kicks our ass every single year? NVR is number one. It’s not even close. They’re 9 to 1 over us, but they’re a multi-billion dollar corporation. What we do is eliminate them from our search. They’re playing a different sport. What we figure out is who our competitors are down here, and we have to level the playing field with them. We can’t play with them. We can’t take big punches at them because we could punch so hard we could fall. What we do is, instead, we get focused on what we can control and where our niche is.
What LIV is able to do is they can take a huge niche because they’ve got an endless supply of cash. That’s not what other leagues or other businesses do. Ian and I have a funny phrase. He coined it and I love it. We call it the Dominique Wilkins of businesses. That’s all offense and no defense. I have to have a defense. I have banks, lenders, and I’m not publicly traded. I don’t have an endless supply of cash. I’ve got to be very smart about winning, but also not losing. We’re an Amazon, Apple, or Google. Those companies make so much money on their primary businesses. Google Search makes so much money they can have a division where they can try and go to space, which is a very expensive type of exploration.What WWE does incredibly well is they create stories, and they create villains. Click To Tweet
Since they’re all on offense, they make so much money. It changes the dynamics. What I think we’re going to talk about at the crux of this episode are two things. What’s the PR or the smear campaign, but then what’s the other side of it? If you’re up against this, what should you do inside either your career or business that you can learn from this situation and incorporate? That’s where the fun part of this is. I and I have been talking about this for a couple of months. It started with Phil Mickelson being blacklisted from all these sponsors. It turned into like, “This is interesting. There’s a way through this that you can get the other side.”
It came out that Tiger Woods turned down $800 million to go to LIV. This is the kind of money they’re dealing with. They can offer a broken-down old Tiger Woods, who can barely finish eighteen because of his back, and offer him $800 million to be there. This is going to keep happening. We’ll use some other analogs. The question that the PGA Tour should be asking itself is not, “Is it fair that this group is stealing our people by throwing a lot of money at it?”
The question that PGA needs to be asking is, “Why don’t Frank and Ian watch any of our tournaments? Why don’t guys that are into sports, betting on sports, and gambling don’t watch any of our tournaments? Why doesn’t anyone watch any of our tournaments except for the Big 4?” That’s the question they need to ask. They don’t have enough revenue to pay their golfers. They’re going to lose them because of it. They got a lot of guys that are barely getting by being in their tour that LIV is like, “How about $20 million?” If I’m them, I’m making that decision. I’m taking the money.
Let’s pivot into this. We have a whole list of things that we’re going to talk about. We’re going to talk about WWF and the NBA. I’m going to start with something different that’s deeper down on our agenda because it’s a good pivot point. When COVID happens, I’m out in California. I remember the moment the whole thing starts. It’s the weirdest thing because all sporting events stopped.
You’re walking through an airport and there are TVs everywhere. They were showing Bull games on every TV from several years ago. We’ve lived through it, but we were in this time warp where there was nothing new to be shown. Everybody said, “Screw it. Let’s show old stuff.” ESPN was like, “We’re going to speed up the delivery of The Last Dance,” which is the ten-part mini-series about the Bulls from the ‘90s. That was the only thing they had in production. They were like, “We can get eyeballs and drive revenue dollars through this,” and all the major sports leagues sat back and did nothing.
There was a big thing when COVID first happened with quarantine. You had to make sure you weren’t spreading. What did the UFC do still in startup mode? They’re a behemoth, but they’re smart. What they did is they said, “Screw this. We’re going to go rent an island. We’re going to test everybody. We’re going to create a bubble.” They did the bubble before basketball and hockey. They had content on TV within six weeks when everybody else was standing filtering through the NBA for months.
Within six weeks, they had a regularly scheduled program every Friday from some undisclosed island somewhere where everyone was getting tested and nobody had it. What they did is they said, “We are still young enough. We don’t have so much bureaucracy. Since we’re an outside sport anyways, we’re going to innovate.” I’m not a huge UFC guy, but it was always in the Wall Street Journal. Ian and I would talk about it. We’re like, “That is freaking brilliant.” That’s what we’re going to talk about. How do you turn a threat into a motivator? That’s what’s exciting about this for us.
Another example that I would say is Facebook, Instagram, and YouTube are the gorillas. They own social media. They own the eyeballs. When you see kids on their phones, it is one of those three things forever. TikTok then comes along. TikTok takes everything addictive about all of those platforms and jacks it up on steroids. It makes the clip shorter. If you go look at the user terms of TikTok, it’s gross how much they’re stealing information and what they know about you. TikTok takes all the attention away from these big players.
The first reaction from Facebook, Zuckerberg, Google, and all these guys is to say, “It’s China. We got to ban it.” Facebook has spent tens of millions of dollars on lobbying efforts to get TikTok banned in the country. Instead of saying, “They’re playing the same gross game that we play, which is getting people addicted to their phones, but why are they beating us?” They try to get them banned. They try to say, “It’s not fair.” It’s hilarious thinking about Zuckerberg saying something’s not fair. He’s about as evil a CEO as you can get with the way he tries to get people into things.
That was their approach. They did that for a while until they realized, “This isn’t working. People like TikTok. They’re going to keep using it.” What that did was it forced them to go change how they set things up. Instagram has Reels. Facebook has Stories. YouTube has Shorts. If you go look at it, those platforms have tried to look more like TikTok. They have short 15 to 20-second videos that keep scrolling into your feed and an algorithm that keeps pumping dopamine and moving forward. They’re taking market share back, but TikTok forced them to change.
It wasn’t until they realized, “If you can’t beat them, join them. We’re going to go try to give people what they want,” that they started to make some progress. Until then, all they were doing was bitching, “China is spying on you.” You’re spying on us. You’re all doing the same damn thing, which is stealing data to use against us later.
I’m going to pivot into the NFL. When Ian and I were born, the NFL and the AFL had already merged. The Super Bowl era had begun, but there was an upstart league called the AFL. They were the renegades. The Raiders were in the AFL. They were always known as the Renegade league or the Renegade team. They innovated a ton. What they did was they forced their way into the mainstream. That was when the AFL and the NFL merged. It was the Super Bowl era. That whole thing happened.
TV in the 1950s and 1960s is not what it is now from the standpoint of clarity, but the game became perfect for TV. The NFL is the undisputed champ of television watching for sports. If you start to look at it, there’s less to do with the stadiums. They used to have blackouts. They are starting to do away with those things because it’s all about the TV revenue. The TV revenue drives it.
If you’re at the top of the heap, you’re going to get people who throw haymakers at you. I’m going to give you four examples that I think are fascinating. The first one is the World League of American Football, which happened in the early ‘90s. It used teams in America but also in Europe. In this version, what they did was they wanted to go global and take the American sport. They picked a time during the year when it wasn’t as much of a driver. They were all over the place. It’s hard because of time zones and travel to get an American sport from two different continents.
Let’s look at what happened. The World League ultimately folded, but the NFL ended up purchasing most of it. They still develop talent in Europe and other countries because the NFL is global. Think about this. How many kickers have you seen that come from New Zealand and England? There are tons of them. The soccer players are South Americans. It’s folks who are part of this global outreach that started with the World League of American Football.
The Dolphins and Jaguars can’t fill their stadium. The Jaguars are terrible. The Dolphins, sadly, are terrible, but they’re near and dear to my heart. What they do every single year is play a home game in London. The whole reason for that is because we’re trying to drive traffic to this world sport that happened through the World League of American Football. Do you have anything to add on World League before I get into USFL?
With the USFL, it’s the same thing. There is an incarnation of it. In the ‘80s, when Ian and I were kids, the USFL came up. What did they do that was big? What did they do with Herschel Walker? How did they let him get into the league, and what changed the NFL because of Herschel Walker?
At the time, you had to graduate college to get into the NFL. Part of that was a safety issue. They wanted you to be a fully grown man to get into the NFL and not get hurt. The USFL went in and said, “Hershel, you’re a junior. You don’t need to play your senior year. Come make a ton of money with us rather than risk getting injured at Georgia. You already got a handful of Heisman trophies. What else do you have to prove? Come play.” They allowed the minimum age to be junior before you could be drafted.
That’s changed the NFL. The NFL has adapted it. They also pioneered because they were uncertain in some ways with some free agency tendencies that the NFL copied. This league is almost 40 years old, but there are things that resonate through it. The AAFL was only around for two years. They ended up going bankrupt, but they ended up putting in technology with helmet cams and on-field mics. These were things that were a special issue in the NFL. If ESPN was going to wire you, they would do it. These were the stuff that we take for granted every single day.
The one that’s had the biggest impact on the television era is the WWF. The WWF did the XFL. They did the XFL again a second time right before COVID, and both of them went belly up. What the WWE does incredibly well is they create stories and create villains. Ian’s going to talk in a second about how great the WWF is at this. They had sideline reporters for every game. That was something that was not happening prior. They did in-game interviews.
If you watch a baseball game or a basketball game, there are in-game interviews. This all started with the XFL. There’s that incredible rig that’s taken for granted. They put that up at every stadium, including indoor basketball arenas. It flies around, and they call it the sky cam. All of those were the invention of the XFL. There was more stuff, but those were the big things.What the WWE realizes is the value of the superstar and the audience. If you have the superstar, the audience will follow. Click To Tweet
If you look at that, what these leagues did is they saw it, and they were like, “This is an upstart. This is cool. Can we take some of this, incorporate it into our product, and make it better?” This is what Ian and I are driving out with LIV. We think the PGA tour can innovate in a way that these other leagues have, but that’s what the NFL has done and done very well.
What’s interesting is all four of those leagues had to do things differently because the NFL is so popular in the country. They had to do different things with the cameras, the in-game interviews, and the personalities. The USFL paid huge money to people. That forced the NFL to pay more and share more. The free agency thing is big. Reggie White was the first big-name guy to leave. Everyone said, “Free agency is going to kill the sport,” because back then, you started and you finished your career somewhere. It didn’t kill the sport. It made it better. People have more opportunities and more competition.
What I’ll say the NFL did well is they’d say, “That’s a good idea. Do people like that? We’ll do it. We still have the stars.” Then, those leagues go away. Instead of complaining about it, they were like, “Let’s go take your innovation and get a little bit leaner.” Frank and I talked about this. The example that I like is there used to be two major professional wrestling organizations. The WWE was one.
Our half-ass internet research leads us to believe that Vincent McMahon screwed women in both leagues, but we’ll get to that.
It could happen. The WWE was the big one, and it was bolstered by its star, which was Hulk Cogan, all through the ‘80s. The WCW is more of a Southern regional player. They weren’t a big player. They did have Ric Flair, which is the man. They weren’t as national as WWE when Hulk was still there. WCW went and stole the biggest star in the WWE. They stole Hulk Hogan. That would be like if Liv got Tiger Woods almost at its peak. Hulk was still in great shape. He was still the biggest draw in WWE. They got him for a lot of money and brought him over. What they did was they turned Hulk Hogan into a villain. Hulk Hogan became Hollywood Hogan. He changed this whole outfit.
He went from all yellows and reds to black. He blacked out his beard.
They stole some other big names that came along and created this thing called the New World Order. They were a bunch of bad boys, and all they did was cheap shot you. They got bigger crowds than WWE drew. It was because people hated Hulk Hogan. They went into this tough area. WWE, instead of complaining, “It’s not fair. You stole Hulk Hogan from us and turned him into a villain,” what do they do? They adapt. They used to be these really wholesome heroes that carried American flags. Hulk Hogan always had an American flag. Hacksaw Jim Duggan carried an American flag.
The only villains were from the Eastern block or from Russia. It was the Iron Sheik and all those guys.
They were from Iran or Russia. Sgt. Slaughter, the American, has beaten up some guy from Iraq. It was very much like that. It was almost cartoonish and people were tired of it. It’s not realistic that WCW took the viewer,” so what did WWE do? They created the attitude era. This is when Stone Cold, Steve Austin, rose. This is when The Rock rose. They had D-Generation X. They pretty much had all these folks that came in that were cursing, drinking beer, and flipping the camera off. People were like, “We want more of this.” All the old stars went away because they were from a wholesome era. What happened then? They took all the viewers back, and ultimately, WWE bought WCW.
There was a time when the two were even. You didn’t know which one was going to come out the winner. It was like a Pepsi versus Coke battle. WWE looked at what was working, and McMahon was good at seeing what the people wanted. They ultimately put him over the top. What McMahon did was he made himself a character in pro wrestling. He became the evil villain boss. He would let guys like Stone Cold and The Rock beat the crap out of him every week. People loved it because everyone dreams of beating up their boss. He was the billionaire tycoon jerk boss. He would come in and start cussing out his wrestlers, and they’d beat his ass. Everyone loved it. That turned everything for them, and they ended up acquiring the WCW.
I have two quick things and then we’re going to get into some more business examples. The NBA is incredible, but the NBA had an upstart competitor in the ‘70s called the ABA. Dr. J played in ABA before he moved over. There are two things that they did that are still with us. One of them was the three-point line. The three-point line is now a major part of the game. Think about Steph Curry.
It’s hysterical to me. When I go play basketball with a bunch of 40-year-old dudes, everyone’s like, “Protect against the three.” The best players on Earth hit 39% from 3. We’ve all been reprogrammed because of Steph Curry to go protect the three. I’m like, “I’m going to let you take it and take the math here. You’re not going to make it. You’re a disc jockey who’s good at Excel. You’re going to miss.” It’s hysterical, and that came to us through the ABA.
The ABA also invented something else that’s incredible, which is the all-star weekend. The Slam Dunk Contest is the biggest thing, but they did a skills challenge. They did a whole all-star weekend that has been completely stolen by the NBA. They did all of that stuff years ago. It gets tiring, so they refresh it over the years. The Slam Dunk, the three-point contest, the skills and dribbling challenges, the ABA did all of that stuff because they needed to draw eyeballs balls. They were innovative. The NBA has since taken all of those.
With everything you’ve used from a sports example, the upstarts focused on the personalities and the talent. The big organizations had forgotten that and they started to lose. The small guys forced them to prioritize. Like in a business, we better prioritize our best people and make them the stars. Let’s not let the executives be the stars that make all the money that forced a lot of them to do that in every one of those sports examples.
The last sporting example before getting into business is Major League Baseball. There’s a famous saying that Ian and I have heard on shows. Other leagues adapt and innovate, and the MLB steals it and monetizes it. The examples are a free agency and the strike zone, which is big. They’ve been using this technology in tennis for years. In the minor leagues, they are also using strike zones. Why are they manipulating the strike zone and not using humans for the strike zone? There’s a specific reason. It’s not just because of the interpretive nature of it. What happens if you use technology with strike zones?
They haven’t done it exactly yet.
They’re experimenting with it. The whole goal is to get the game to be faster. The reason they want the game to be faster is that upstarts like soccer are stealing the European market. Baseball games can take 2, 3, 4, or 5 hours in some instances, and soccer’s done in two hours or less. They’re adapting. The baseball era was so big when there were box scores, and box scores are no longer as relevant. They’re trying to figure out ways to move forward. I thought those were two unique examples with MLB. There are other things, but that’s the stuff that we should cover.
A classic business example in the ‘80s is Coke had a crazy dominance in sodas. Pepsi came along and they created the Pepsi Taste Challenge. Frank and I were both kids in the ‘80s. You remember all of these ads. They were compelling. They would put a blindfold on some random dude on the streets of New York and be like, “Taste this and taste this. Which one do you like more?”
They would ask them first like, “What’s your favorite soda?” They’d be like, “Coke, for sure. I love Coke.” They put a blindfold on and have them taste both. They’d be like, “That’s my favorite. That’s got to be Coke.” They’d be like, “No, it’s Pepsi.” There was this Pepsi Challenge. It was everywhere. They would be like, “We challenge you to take it.”
These ads destroyed Coke. People bought it. They bought in like, “We’ve been blindsided by Coke’s marketing. Pepsi is tastier.” It got to the point where they lost enough market share that Coke went and created the new Coke, which was a new formula. It tasted a lot like Pepsi. It was gross. Their customers who liked Coke got pissed off and didn’t want to buy the new Coke. They wanted the old Coke back. What did they do? They brought back Coke classics, and then they started running a series of ads of their own.
They were saying, “We’re doing taste tests, and people like Coke more.” They stole the Pepsi Challenge, brought back classic Coke, and said, “People like classic Coke way more than Pepsi.” They beat them at their own game and spent a bunch more on marketing. The rest is history. Coke is still the dominant player. The existential threat went away.
Another one that I love is the beer wars of the ‘80s. They were fantastic. It’s one that I’m close to because there was a time in the ‘70s when Stroh’s, which is made out of Detroit, was the dominant beer manufacturer in the country. I grew up seeing all of my uncles and my dad crushing Stroh’s on every barbecue. That was the beer of choice around our house because it was a Michigan beer and it was the cheapest to probably get.Rather than focusing on fairness and what people are paying, go focus on revenue. Click To Tweet
Stroh’s started losing market share to the point where Anheuser-Busch had grown enough of its market share and had acquired its way to being the dominant provider in the ‘80s. Stroh’s came out with an ad campaign. They aired their first one where there’s a dog named Alex. There were a couple of guys playing poker and the guy was like, “I’m going to go get a beer. Do you want one?” The guy who owns the house was like, “Don’t do that.” He makes a sign at Alex and Alex barks back. He leaves and comes back with two Stroh’s. People loved this commercial to the point where they made dozens of commercials with Alex from Stroh’s from 1984 to 1989. It got tremendously successful to the point where he was getting market share gains back.
What does Anheuser Busch do? It was really creative. They go and get their own dog. They released Spuds MacKenzie, who was their version of a party dog. They released that in a Super Bowl commercial in 1988. If you were around the late ‘80s, everyone loves Spuds MacKenzie. Everyone knew that name. They pounded you with commercials of Spuds MacKenzie. I had a t-shirt with Spuds MacKenzie on it as a twelve-year-old boy. It was a beer t-shirt with Spuds on there. Everyone loves Spuds MacKenzie. Ultimately, it righted the wrong.
Here was someone who is smaller in market share fighting the big guy with creativity. The big guy went and got forced to copy. I wouldn’t even call that innovation. It was more copying. Sadly, I don’t know if you know this, but Alex died of cancer before we could see who won between Alex and Spuds. I don’t know that I can give that as a pure win to Spuds MacKenzie because Alex went down due to natural causes.
With cell phones, we can talk about Apple versus Microsoft. Steve Jobs used to always say, “Microsoft doesn’t do anything creative. They steal everything we do.” As an example, in Walter Isaacson’s book about Steve jobs, he goes into how he didn’t even enroll in college. He just dropped in. He walked into classes. When he was at Stanford for a short period of time, the one class he showed up to was calligraphy. He thought calligraphy was incredible. He fell in love with fonts and typefaces.
There used to be a green screen with a blinking cursor where you would type. Steve Jobs made it beautiful. He made it so you could pick and choose whichever type of font you liked. We all know the word font because you can change your font on your cellphone. You can change it everywhere. Microsoft is the one who took that example and stole it. They incorporated it in everything that you can do with Word or Microsoft 365. It was incredible because it came from a calligraphy class. Someone saw it and made the innovation. The bigger animal stole it and turned it into something different. What I think we should do at this point unless you want to spend more time on phones and tech is getting into what we think LIV should do.
I love that you brought this up. When the iPhone came out, it was an incredible piece of technology. A lot of innovation came from Apple, which put Motorola out of business. What’s interesting is Samsung, at the time, was the manufacturing partner. They were making the chips. They were making a lot of the components even though the ideas were Apple’s. Samsung started making its own phones.
What’s interesting is it started with Apple being the innovator. By the 3rd version or 4th version of the iPhone, Samsung started being the innovator because Apple had all the market share. Samsung is the one coming out with better security. They can read your face to open your phone. They were the ones that would come out with something like wireless charging.
I don’t know when it was. Maybe it was Apple 4 or 5, but Apple became the fast follower because they were the gorilla. For Samsung to get market share, it had to keep innovating. Apple would have these boring features. People will complain, “Samsung’s better. I’m switching.” The next thing you know, in the next phone, Apple would have it.
It’s interesting that even with big companies, they still copy each other and are forced to innovate. It’s usually the guy chasing market share who has to be creative to go take market share. They’re like, “If I don’t have it now, somehow, I’m not serving someone else’s need. I need to do something interesting enough to get someone to change from the status quo.” That’s what PGA is going to have to do or they’re going to lose all of their golfers to LIV.
Before we get into PGA, I’ll say one last thing attributed to Steve Jobs. Steve Jobs said, “Good artists copy. Great artists steal.” He was the one that was pissed off at Bill Gates for stealing all his copies in font-face. It started off with 1,000 songs in your pocket with the iPod, and it continued to morph. That’s how the integration works. It’s a tug of war. It’s not a straight-up chart. It’s got jagged ups and downs because of the fact that it’s a constant process of evolution.
This is a perfect way to segue into it. If the PGA innovates, this might be a small pullback that can ultimately fuel a huge rally. If not, it could tank the stock. These are some ideas that two guys that don’t golf come up with, but hopefully, the people with the PGA take the product and rejigger it. They have one incredible advantage over everybody else. They have all the youth and all the history. They have the talent and all of the prestige. Going in and winning a LIV tournament that’s not even on television is a lot less appealing than having somebody going win the Masters. These are some of the things that Ian and I have come up with that we think could help spark innovation inside of PGA.
Rather than bitch, moan, demonize LIV, and focus on, “Anyone who goes over there doesn’t care about human rights,” or, “If you go to LIV, you’re never coming back to the PGA tour,” it is a huge blunder that they’re doing that. What if their top five golfers all go to LIV, and you want them back? You’ve set a precedent where we can’t take them back. That doesn’t work. Whenever you say, “You’ll never come back to a star,” you’re an idiot. What if Vince McMahon would have said Hulk Hogan can never come back? Hulk came back and had a great run in WWE. You can’t ban people for life because what if everyone goes in and is like, “There is no life left to PGA.”
What will ultimately happen is this. The CEO of the PGA Tour will get fired. They’ll bring in a new person. That new person will say, “We’re under new leadership. We’ve reconsidered this.” The only way you can possibly retrace that is the leader of the organization is going to have to get his head chopped off, which is fitting talking about Saudi Arabia.
You’re right. This advice is for the new CEO of PGA because the CEO that is there has ideas that suck. His ideas are, “Let’s hire more lawyers,” which never works when you’re up against that.
Let’s take a quick pause. This is yet another you-heard-it-here-first on the show. Ian and I were early in the recession. We are early on the pullback of real estate. All of these things are coming to fruition.
We were early on inflation. We’ve been early on everything.
We’re adapting hacks during the workweek. We’re early on that as well. We may be unwoke, but we’re early.
The only fight I’m even compelled to see is Tyson when he put on those big gloves and beat the crap out of that guy. There’s the YouTube star who’s going and fighting people. He’s training hard. That’s more compelling to me than the actual top fighters all because it revolves around personality.
You’re talking about Logan Paul. You’re talking about a famous guy fighting another famous guy. That’s more interesting than the actual fighters because you’re focused on the people and who they are in their stories.
We’ve seen it. We’ve seen the Rocky story, so many times it’s boring. You get me to people who aren’t boxers. If Rob Gronkowski would go fight, I would stay up past 11:00 PM to watch that. I would love to watch Rob get in a ring. Think about the biggest UFC fights, like when Connor McGregor boxed. I don’t even remember who he boxed. Was it Floyd Mayweather?
I remember I fell asleep and someone had to wake me up to watch it. I fell asleep on the couch and I was like, “This is awesome.”If you are getting beat and getting people poached from you, make more revenue so you can afford to keep the people you have. Click To Tweet
It’s compelling. Think about it. That’s how the UFC became the number one combat sport in the world. What they did was they took average Joes, so they would take two guys. One’s a Brazilian jiu-jitsu fighter from South America and then they would take another guy whose style was brawling. There was a guy by the name of Tank Abbott. They interviewed him, and he was like, “Most of my fighting is done in bars. I like to fight and punch people.” You’d take two guys with different styles, talk about their personalities, and they would fight.
What UFC did well that boxing does terrible is there are not enough boxing with compelling personalities. I feel like every other weekend, there’s a big UFC event. With two personalities that people that follow that sport know, the UFC went out. They created reality shows similar to Survivor and some other reality shows. They would take twelve young upstart fighters and you’d get to know them. It was an elimination. Every week, someone drops off the show. The winner of that is a star right out of the gate in his next UFC event.
Not only did UFC make money on the show by ratings and selling ads, but the winners, and not even just the winners because you got to know the ones that come in 3rd and 4th, you’re rooting for them over twelve weeks in this competition. As soon as they have a fight, people plop down $50 to watch them fight.
What we think would work is to focus on personalities but focus on more events. A problem with some of the tournaments is that 150 guys are in them. It’s spread out over five hours and you don’t know when guys are golfing. Have more one-on-one, two-on-two, or four-on-four events where the action is intense and you’re only paying attention to 4 or 8 guys.
My favorite player is Dustin Johnson. The odds of Dustin Johnson winning are not high. It’s 150 guys you’re up against. Only Tiger Woods won all of them. If there are four, the odds of my guy winning are pretty high. He’s only got to beat three guys to go win it. When you and I go golf, we’re like, “$10 on who gets closest to the hole on this shot. $10 for the longest drive. Let’s do a scramble where we go with the best ball.”
It’s why the NFL is so compelling. For people who are paying attention to baseball, it’s still compelling. There’s Fantasy baseball, which started first, and then there’s Fantasy football. You can gamble on everything. Imagine if they did a sixteen-person tournament. It’s where four foursomes and two foursomes all played. It was a shotgun start and there was always somebody good. The top sixteen players were playing.
This is a dated story, but it’s a relevant story. Some of this stuff has come out in the news. When this happened to me, this wasn’t popular knowledge. We didn’t know about it. I was flying on a flight to Florida many years ago. I texted Ian as soon as I landed. I was sitting next to this guy and he’s got on this pair of incredible Beats headphones. I asked him, “Are you in music?” He goes, “No. I’m not music. I’m a professional wrestler.” I didn’t recognize him. I never heard of him. I was like, “How’d you get the headphones?’ He was like, “Beats wants us to wear them because if we wear them, they think that people will buy the Beats headphones.” This is before Beats was sold to Apple.
I was like, “What are you doing going to Tampa?” He told me. He was like, “I go to Tampa because there’s a training facility there.” I’m like, “What do they train you on? Wrestling?” He goes, “That’s part of it. We do TV training. We do personality training.” They do all of these things because the WWE is an entertainment business. What Ian and I talked about Russia fighting the US was compelling in 1986, but it wasn’t compelling in 1991. What they did was they took different people across America and made them fight with each other.
Think about when wrestling was popular. That’s what they learned. We have a populace who wants something and we are here to entertain them. They teach the wrestlers how to move, but they spend more time on training for interviews, personality, outfitting, and all of these different things. This guy told me about it, and I was like, “This is fascinating.” He also told me that in the ring, the referee wears an earpiece. The referee tells the wrestlers if they need to speed up the match, slow it down, or if production wants them to do something. What WWE realizes is the value is the superstar and the audience. If you have a superstar, the audience will follow. That’s what the PGA tour is lacking. They’re lazy and entitled.
3 of the top 5 wrestlers in pro wrestling are Hulk Hogan, Stone Cold Steve Austin, and Ultimate Warrior. All three are terrible ring wrestlers. Have you ever watched Ultimate Warrior versus Hulk Hogan? There are no moves. There are a lot of punches and running into the ropes.
It’s like two refrigerators charging at each other.
You might get a body slam here and there. Bret Hart was a great wrestler. He could do every move in the world, but he wasn’t as compelling in front of a microphone. Those guys are compelling talkers. Focus on the personalities. I’d also say make it easier to gamble on golf. Create some fantasy.
There’s nothing on FanDuel for golf. You might get tournaments.
What makes football great is every week, there’s something with the favorite people that we have on our Fantasy teams. I can gamble every week.
We can talk shit to each other, email, and text. We’re constantly going back and forth. It’s compelling.
Betting on golf sucks. There are 150 guys in the field and you bet on maybe 3 or 4 guys to win it all. Their odds of winning are 40:1 because they’re up against 150 other people. Make it easier to gamble when you go into it. Another thing I would say is the format. That’s four days of golfing and eighteen a day. Most of the guys are out by the second day. They’ll still play the next two rounds, but if you’re down ten strokes on Friday, you’re not making any progress. Why are you still playing?
An idea I’ve got on this is to steal from March Madness with your tournaments. On the first nine, have everyone go head-to-head. If there are 160 people, at the end of the first day, there are 80 people because we’ve eliminated a batch. You’d have upsets because, in any one eighteen rounds, number 70 in the world could beat number one. It’s hard for number 70 to beat him four days in a row. Have colossal upsets where it’s like, “Did you see Tiger Woods, the number one seed, lost to Jack Jones from Canada, who sucks at golf but beat him in eighteen holes?” That would be way more compelling if you made it an elimination where there are upsets. Every day that you get past, there’s only half of the people left.
They do some of those tournaments. They do maybe four of those a year, but it’s lost because it’s not properly promoted. There’s a way to upgrade it. What I will get back to is the ABA and the NBA with the Slam Dunk Contest. There are only so many ways you can slam a basketball into a net, so they have to add gimmicks and things and refresh it over time. What was old becomes new again. What the PGA needs to do is they need to realize they’ve got the biggest advantage. They’ve got history and people. Most young kids aspire to win tournaments in the PGA.
There was an interview with a guy named Jon Rahm from Spain. He’s made a bunch of money. He comes out and goes, “My wife and I’ve talked about this. We had an opportunity to do LIV. I’ve got more money than I need. I want to compete against the best. When I grew up as a kid, I wanted to play and win here against the best.” They have that, but if they innovate and get fans involved, they can kick the crap out of people with deep pockets because they have the talent, history, and ability.
What I think about this is critical. I have people who copy me in Richmond, Virginia. A buddy of mine went to a mastermind event. He’s like, “This guy’s from Richmond. He’s got your logo. It’s called CVA.” The only thing missing is the middle A and it’s the same as mine. His bio is my bio with his name on it and he added his wife’s name. There are copycats, but that’s fine. If he innovates, does something smart, and starts to take my market share, I got to be honest about it. I’ve got to say, “How do I innovate past this person?” People are always trying to come up the ladder. That’s what we want to talk about with this. LIV is one example, but there are thousands of them.
That’s right. Get folks to pay attention to more than four majors. Rather than focusing on fairness and what people are paying, go focus on revenue. Make more money on a weekly basis. Get your revenue up so you can pay your people better. They’re crying, “We can’t pay that.” You can’t pay that because your revenue sucks. If you are getting beaten and getting people poached from you, make more revenue so you can afford to keep the people you have.
Do you know the first thing I would do if I was the PGA? I’d hire Charles Barkley as an announcer. Bring him in. He’s exciting. Start to innovate. Do little things like that and then start bringing people in. Become a magnet. Charles Barkley doesn’t want to leave because he’s got a rich TNT contract. Bring him in as a second job.
How many networks does Michael Strahan work for? Is it seventeen? He is on every channel. I don’t know how that guy physically is in New York and LA concurrently throughout the NFL season. He’s figured it out. People watch football that would never watch football because of him. They made it smart and figured out how to lead innovatively. That’s what I think we have to talk about. It can happen to LIV, but it can happen in every other part of your business. You have to think, “How do we push the envelope?” It’s not, “What can we afford?” It’s, “What can we not afford to live without?” That is how you get further.
You need more rivalries. Rivalries are great. People love rivalries. Get more golfers that can’t stand each other. Work on those storylines so you know it’s going to be intense. Put them in the same twosome going up against each other where the two don’t even talk to each other. They hate each other. You need more of that where people are picking a side. It’s hard to pick a side when everyone’s friends and get along. This gets me to the last piece. Let all those LIV guys back in because all the PGA guys hate them. They all hate them because they all went and took the money. They’re the evil empire. Let them back In. They’re all the Hollywood Hogans that sold out and went heel.
All the babyfaces will be the PGA people. Why would you not want them back? I would want them back so bad. I would put a LIV guy with a PGA guy on every hole teeing off. They all hate each other. Put Rory with Bryson because they’re talking about each other all over the news. Put them against each other and then keep the cameras on their faces. Make them interact with each other. That’s what works for pro wrestling. That works for Michael Jordan versus the Pistons. It works for Lakers versus Celtics. It works for every rivalry in pro football. It works for a Hagler versus Hearns. You put two rivals that can’t stand each other and pit them against each other. That’s a storyline that works. I would be like, “You’re welcome back whenever you want. I’m going to put you in with the guy who didn’t take $25 million.”
The PGA should send the LIV tournament a Christmas card and say thank you.
They’re like, “Thank you. You forced us to wake up because no one was watching us. The truth is we had a bunch of old men watching it. Now, we got all kinds of young fans’ energy because you forced us to grow up, focus on revenue, and focus on our customers and audience. By doing that, we were able to pay our golfers more. We became the destination again. We lost that for a while. You helped us. Thank you very much, Kingdom of Saudi Arabia.”
The last thing we should say is that the PGA should bring Vin Scully if they want to bring us to the next level.
That’s good. Like this show is forcing Joe Rogan and Tim Ferriss to innovate and get their shit together, we will take all of your goddamn ears and steal them. We are stealing your followers. You’d better innovate and get unwoke like us quickly, or we’ll take all of your followers. We’re coming for you, Rogan.
I was going to say something insensitive, but we’re done.
That got very pro wrestling there at the end. It was good to see you.
It’s always a pleasure.