Is LIV Golf Just an Expensive MLM Scheme?

Social media had a field day when details of the player contracts offered to LIV Golf defectors were leaked online by the likes of USA Today and others. While many of the details had long been rumored to be true, such as requiring members to recruit others to the upstart league or wearing LIV Golf-branded clothing, it was still quite an eye-opening realization.

After further review of the details, however, things started to sound a little… familiar.

Recruiting others to the company?

Wearing branded clothing?

Needing permission to attend events?

Is… is LIV Golf following the “sex toy party” model?

What is MLM Marketing?

Let’s settle down for a second and explain a few things. “Sex toy parties” — or cleaning supply parties, purse parties, phone service sign-up events, and hundreds of others — use a model called “multi-level marketing,” or MLM for short. Chances are someone in your circle of friends (perhaps even you!) has worked for or purchased something from this type of business.

MLM businesses get a bad wrap most of the time, mainly because they should. They often follow a pyramid-shaped recruitment model that requires “employees” (often referred to as “members” or “agents”) to not only sell whatever products tied to the business, but more importantly to recruit other people to become agents themselves.

In fact, recruitment is the top priority and main source of revenue for these businesses. The more members they can get in, the more dollars the company’s leadership collect. You can read about the basics of MLM marketing here.

Before we go any further, it should be noted that MLM businesses are most often legal and legitimate. At least, until they aren’t.

MLM Contract Details

Agent agreements — or contracts — for MLM companies can differ widely from one to the next. However, there are many similarities among them, especially in terms of how agents should behave when representing the brand.

For example, according to one such direct-selling agreement draft easily found online, a brand’s “Direct Selling Agent” is assigned a territory in which to conduct their business. This agent’s “sole authority shall be to solicit customers for the services in the territory in accordance with” the terms of the agreement. Furthermore, this agent will be provided product or service brochures by the company to use when holding events (“parties”) in an effort to a) sell them and b) recruit others.

Sounds pretty straightforward, right?

What the heck does this have to do with LIV?

As someone who has had friends participate in MLM companies before, this is about the time when I began to notice some similarities between what those agents had to do and the leaked details from the LIV Golf contracts.

As they say: the devil is in the details.

Per the USA Today article, LIV Golf players are required to recruit other players to join the league. We also know that the team-based elements of LIV Golf is moving toward nationality-defined teams… or “territories.”

Sounds familiar, right? In fact, Direct Selling Agents are often required to directly solicit others to join the company as per their signed agreements.

There’s more.

It’s also been reported that LIV Golf players are required to wear branded clothing while playing golf “anywhere in the world” to showcase their allegiance to LIV. It is presumed this clothing is provided to the players for this purpose.

Similarly, MLM agents are often required to do the same. In the example found online, the Company agrees to provide the Direct Selling Agent “with marketing and technical information, training concerning the Services, brochures, instructional material, advertising literature, and other product data.” The agent is also often required to wear branded clothing while conducting their business.

Let’s keep going.

It is reported that LIV Golf players are not allowed to accept invitations for exclusive interviews from any media without permission from LIV leadership. It’s also suggested that while LIV players are allowed to play in any tournament they want, they cannot do so if the tournament conflicts with a LIV event.

MLM agents are often bound by similar constraints, albeit in a much smaller context. They are not allowed to participate in any competing companies (no surprise, of course), but are also required to get approval from brand leadership to promote, speak about, attend events, or otherwise advertise anything related to the brand. Obviously, this is very similar to any employer anywhere, however not usually included in such detail in a business agreement signed by an employee.

Also of note: MLM Direct Selling Agents are considered independent contractors… much like what pro golfers so adamantly remind us. This means the agents are not direct employees of the company, just as golfers are not directly employees of LIV Golf or the PGA TOUR. This presents limitations on what the company must provide the agents, such as health benefits.

Yeah, this all seems like a stretch, dude

Of course it is! The whole thing is a stretch, but the similarities are there nonetheless. Yes, there are also differences.

For example, LIV Golf players are not selling products to anyone, at least directly. I suppose one could argue the golf they play at the tournaments in which they compete is a product, and they are expected to compete in LIV events as a priority.

It’s also unclear as to how LIV Golf brass make any profit right now as more players join considering the league’s massive upfront startup costs, but you have to think profits will come at some point.

Still, the similarities of promotion assistance, needing permission to speak about the brand, and contract-bound recruitment requirements to which all LIV Golf players to that of your aunt’s Mary Kay agreement are suspicious.