Unlimited Capital Can’t Buy Customer Engagement | Woden

7 min readOct 3, 2022

After 70 holes of golf played over four days, Cam Smith led Rory McIlroy by just one stroke. With only two holes remaining, and with the infamously difficult 17 thhole looming ahead, McIlroy was running out of time. For the 52,000 fans in attendance at St. Andrews’ Old Course (and for the 5,000,000 watching on television), this sort of drama is what they had come to see. The oldest tournament in golf-the first Open Championship was played in 1860-played on the world’s oldest course, the 2022 Open somehow managed to surpass these lofty expectations. In a game that prides itself on tradition, fans had gotten their money’s worth.

In a broader sense, this is the story that each of the world’s major sports leagues sells to fans. When, for example, the Chicago Cubs won the World Series in 2016, tens of millions of viewers across the country tuned in because the Cubs hadn’t won since 1908; the team was supposedly “cursed.” The Series was not just between the Cubs and the Cleveland Indians; it was the Cubs vs. a century of history. More than a spirit of competition, and more than ultimate displays of physical performance, sports leagues rely on these tradition-based narratives to keep their customers coming back.

As the owners of these cherished histories, leagues are able to operate as virtual monopolies. With their stranglehold on customers’ imaginations (and on players’ talent), it is almost impossible for rivals to compete in any meaningful sense. When competitors do pop up, they are typically forced to brand themselves as plucky upstarts-disruptors who have come to shake up a stagnant playing field. These attempts have been overwhelmingly unsuccessful. For instance, when the United States Football League attempted to steal market share from the NFL in the 1980s, a series of blunders culminated in one team owner (Donald Trump) leading a lawsuit against the NFL for antitrust violations. Although a judge would ultimately award the USFL a paltry $3 million, the league had staked its future on a much larger payday and promptly went belly-up.

But what if one of these plucky upstart leagues weren’t such an upstart? What if one had the financial backing of, say, Saudi Arabia’s Public Investment Fund? What would this mean for the future of professional sports? As Cam Smith and Rory McIlroy approached the final two holes at St. Andrews on July 17, 2022, this question was likely on the minds of many in attendance. This particular Sunday at the Open was different: After 162 years of uninterrupted tradition, golf had reached a crossroads. Of the two players, Smith had recently chosen to abandon golf’s PGA Tour in favor of the new Saudi-funded league, LIV golf; McIlroy had rejected LIV’s offer and denounced the upstart league publicly.

Since hosting its first tournament in June 2022, LIV Golf has lured nearly 70 players away from the PGA Tour, including 12 Major Champions. Phil Mickelson received a guaranteed $200 million contract; Cam Smith, who beat McIlroy at the 2022 Open by two strokes, got $100 million. Tiger Woods rejected a billion-dollar offer. McIlroy turned down $373 million. Although LIV has declined to release any financial information, these eye-popping paydays indicate that the league has no intention of being profitable in the near future. They are prepared to operate at a loss and survive on the seemingly bottomless pockets of the Saudi PIF for as long as it takes.

With LIV’s unlimited capital, it would be easy to imagine that the PGA’s days are numbered. Yet the league’s launch has not been entirely smooth. From a sporting perspective, traditionalists have objected to LIVs splitting the game’s best players and weakening the field of competition. Others, concerned over Saudi Arabia’s history of human rights violations, have accused LIV of being a “sportswashing” operation designed to launder the current regime’s reputation. One might imagine, then, that LIV would have an interest in telling its own side of the story and articulating a compelling case for its existence. This story has yet to materialize. LIV’s slogan, “ Golf, but Louder,” is almost comically meaningless, and its mission-”to supercharge the game of golf”-accomplishes little more. When one high-profile player, Lee Westwood, was asked by a reporter why he chose to abandon the PGA in favor of LIV, he said the quiet part out loud: “This is my job. I do this for money.” When a business’ key employees are unable to articulate the organization’s story beyond “I do this for money,” something has gone wrong.

Unable to make a case for itself, LIV Golf risks joining the long list of companies with promising products and substantial funding that failed to resonate with consumers. To build a sustainable brand with an enduring competitive advantage, endless capital is not enough. Without a compelling story that fosters a connection between a brand and its customers, the return on this investment will fall significantly short.

Business history is littered with examples of hugely capitalized start-ups that attempted to take on established brands but ultimately failed to win market share. While these businesses sometimes fail due to poor products (remember Quibi?), in other instances, the cause is harder to pinpoint. Consider the case of Jawbone: a wearable tech company that attempted to pivot from Bluetooth headsets into the health tracker market dominated by Fitbit. From 1999 to 2014, Jawbone received $991 million in venture capital across three rounds, including $250 million in 2014. In 2015, the company was valued at $3.5 billion. Two years later, in 2017, Jawbone was out of business.

With a collapse this spectacular, there’s never just one cause. The death knell, however, was a disastrous 2016 report which revealed to investors that despite its substantial funding, Jawbone had captured just 2.8% of the wearable fitness tracker market. What had gone wrong? Was Jawbone’s wristband 97.2% worse than Fitbit’s or Apple’s? The answer is complicated. Jawbone had started as a company that made military-grade wireless headsets and other communication devices for soldiers in tough conditions. When they brought these products to the civilian market, the brand told a story of ruggedness, durability, and combat readiness. The Jawbone name itself reflects this military-industrial heritage. The headsets built a loyal following of civilian users. By the early 2010s, however, the popularity of Bluetooth headsets was fading fast. The brand needed to pivot, and, at least superficially, the shift to wearable fitness trackers made sense. Jawbone had experience with wearable electronics, and the demand for fitness-tracking devices was increasing every year.

But if Fitbit had found success by convincing its customers that healthy living could be fashionable and trendy, and if Apple had sold consumers on a holistic lifestyle in which health data would be integrated into their phones, computers, and smartwatches, what kind of story could Jawbone tell? In truth, health had little to do with Jawbone’s brand narrative. Military heritage and combat readiness weren’t enough to separate the company from competitors-and “Jawbone” certainly didn’t sound like a brand that catered to suburban dads and soccer moms. While a shift away from Bluetooth headsets was necessary to survive, Jawbone moved in a direction that was fundamentally misaligned with the story that had once enabled its success. And without a clear, compelling purpose to guide them, Jawbone failed to differentiate itself from its competitors in a saturated market. At best, its purpose was generic: “There’s a better version of you out there”. At worst, it failed to position customers as the heroes in their own journeys toward better health: “Jawbone is health.” Without an understanding of the fundamental pain points a brand solves for its customers, and a story that positions the brand as a mentor guiding the customer toward a solution, even a billion dollars in raised capital is not enough.

Whither, then, LIV Golf? In many ways, the league represents a true limit case for the question of whether unlimited funding is enough to overcome an uninspiring brand narrative. Only time will tell how long the Saudi PIF is willing to pour capital into an unprofitable brand. The league will certainly be given time to turn itself around, and they may well figure out a way to do it. It was worth noting, though, that early returns have been less than encouraging. LIV’s initial television ratings have been poor, and with no story to combat the public’s negative perception of the league, the daily sports news cycle has turned into a pile-on. LIV is constantly making headlines, but rarely positive ones. Not all news is good news. And although there has been no official decision yet, it remains possible that the golf’s four major tournaments-The Open, The Masters, the PGA Championship, and the U.S. Open-will refuse to accept LIV’s ranking points as legitimate qualifications, effectively barring LIV golfers from the sport’s biggest stages. The dramatic scene at the 2022 Open-McIlroy and Smith battling it out with two holes to go may have been a curtain call. With its back to the wall, LIV must quickly find a new story to tell; one that cuts through the noise and resonates with fans at a gut level. Otherwise, LIV’s bottomless capital may not be enough.

Jack Truschel is an engagement team lead at Woden. Want to stay connected? Read our extensive guide on how to craft your organization’s narrative, or send us an email at connect@wodenworks.com to discuss whatever your storytelling needs may be.




Woden creates strategic narratives for essential brands. Visit us at wodenworks.com