LIV Paid Players to Join. Its Bankruptcy May Ask Them to Own the Risk.

Rapid Response / Legal Alert | September 12, 2026

For most of LIV Golf’s existence, the bargain was easy to understand.

Saudi Arabia’s Public Investment Fund supplied the capital. LIV supplied the competition. And star golfers received enormous contractual guarantees largely insulated from whether the league itself ever became profitable.

Bankruptcy is threatening to reverse that bargain.

LIV’s restructuring documents contemplate giving players 52.5% of the common equity in a reorganized LIV Golf while new investors hold 45% and management holds 2.5%. But the documents reveal something more important than the headline percentage: player equity would function partly as recovery on claims players already have against LIV, while players who agree to compete in “LIV 2.0” would enter new compensation arrangements.

In other words, “player-owned LIV” is not simply LIV handing golfers a majority stake.

It is an attempt to move some of the economic risk that once sat overwhelmingly with PIF onto the players themselves.

That may prove to be LIV Golf’s most consequential reinvention yet.

What happened: LIV filed Chapter 11 on September 8. After a September 9 first-day hearing, the bankruptcy court entered an interim order September 10 allowing LIV to access up to $14 million of a proposed $49.6 million PIF-funded debtor-in-possession facility. A final DIP hearing is scheduled for October 7.

Why it matters: Separate restructuring documents propose giving players 52.5% of LIV’s common equity, with 45% going to new investors and 2.5% to management. But players would receive equity partly in settlement of bankruptcy claims, while LIV is separately seeking permission to reject its existing multi-year player contracts.

What comes next: LIV must secure support from players holding at least two-thirds of eligible player claims by amount and one-half by number within 35 days of the September 8 filing—effectively an October 13 deadline under the current restructuring agreement.

The immediate court victory keeps LIV alive.

Judge Kaplan’s interim order authorizes a senior secured, superpriority DIP facility of up to $49.6 million, with no more than $14 million available during the interim period. Under Chapter 11, courts may authorize new financing with elevated priority—and, in appropriate circumstances, liens senior or equal to existing liens—when ordinary financing is unavailable and statutory protections are satisfied.

That financing gives LIV liquidity to navigate the bankruptcy rather than immediately shutting down.

But it does not mean LIV Golf has completed its restructuring. It does not mean BC Partners owns the league. And it does not mean the players have accepted the proposed ownership model.

The court approved interim financing, not LIV 2.0.

The final DIP hearing is scheduled for October 7 at 11:30 a.m., with objections due September 30.

The more important fight is what happens after the bridge financing.

The BC Partners term sheet is unusually specific.

Under the proposed structure, common equity in reorganized LIV Holdco would be divided:

52.5% to players.
45% to new investors.
2.5% to management.

The proposed board would have seven seats: three selected by BC Partners; three selected by players and management, including the CEO; and one independent director. BC Partners would also receive minority-protection rights over matters including new equity issuances, additional debt, affiliate transactions, material asset sales, and certain transfers of player-owned shares.

So even the phrase “majority player-owned” requires qualification.

Players may collectively hold a majority of the common equity. That does not necessarily mean they will exercise unfettered majority control over the company.

And their equity would not arrive simply as a signing gift.

The term sheet says players would receive equity “as recovery for their allowed claims”, subject to releases and settlement agreements. Players who then agree to play in LIV 2.0 would receive new contractual arrangements that may include signing bonuses, the return of certain NIL rights, and—in the aggregate—roughly 30% ownership of LIV teams. The exact player-by-player allocation remains to be negotiated.

That is the real restructuring.

LIV became LIV because of contracts.

Its original strategy relied on guaranteed compensation large enough to convince established golfers to leave the PGA Tour and accept the professional and reputational uncertainty that accompanied joining a new circuit.

Those contracts now sit squarely inside the bankruptcy.

LIV has asked the bankruptcy court to reject existing player participation agreements, many of which run through the 2028 season and provide fixed and contingent compensation. LIV says those contracts are incompatible with its proposed new business model and would continue imposing substantial payment obligations without corresponding benefit.

That request remains important procedurally: seeking rejection is not the same thing as having the contracts finally rejected.

But the legal mechanism explains the restructuring strategy.

Section 365 of the Bankruptcy Code generally permits a debtor, with court approval, to assume or reject executory contracts. Rejection ordinarily constitutes a breach, generally treated as occurring immediately before bankruptcy when the contract has not previously been assumed.

That does not magically erase the other party’s rights.

It generally converts the consequences of that breach into a bankruptcy claim.

And that is where LIV’s proposed player equity becomes much more interesting.

A golfer who once possessed a contractual right to future cash could emerge holding a claim against the bankrupt company—and then be asked to settle that claim partly for ownership in the reorganized company whose success remains uncertain.

That is a fundamentally different economic proposition.

Under the old LIV model, the player could win economically even if the league lost money.

A guaranteed contract is a claim to payment.

Equity is a claim on whatever value remains after the business succeeds—or fails.

That does not make equity inferior. If LIV 2.0 becomes a valuable global sports property, a 52.5% collective player stake could ultimately create wealth far beyond another fixed compensation cycle.

It could also better align golfers with the league. Players who own the enterprise have incentives to promote events, help attract sponsors, build team brands, generate media attention, control costs, and increase franchise values.

But alignment has another name:

risk sharing.

The old LIV essentially said: Play for us, and our capital bears the risk.

The proposed LIV 2.0 increasingly says: Play for us, own us, and share the risk.

That is why the bankruptcy is not merely repairing LIV’s balance sheet. It is attempting to redesign the basic relationship between capital and talent.

There is another reason the percentages require care.

The proposed BC Partners-led financing totals roughly $300 million, but it is not simply $300 million exchanged for 45% of ordinary stock.

The term sheet contemplates a financing package consisting of approximately:

The preferred securities come with economic protections, and the term loan and senior preferred pieces include warrants that could provide additional common-equity exposure.

That means comparing “52.5% players” with “45% investors” does not tell the entire economic story.

Players may own more common equity while institutional capital holds debt, preferred claims, warrants, governance protections, and liquidation preferences.

That structure is not unusual in distressed investing.

But it is another reason “players will own the league” is an incomplete description.

The restructuring cannot simply be imposed as a marketing plan.

Under the existing restructuring support agreement, LIV needs participating players who collectively hold at least two-thirds in amount and one-half in number of eligible player claims to sign onto the transaction within 35 days after the bankruptcy filing. Those players must agree, among other things, to support the restructuring and grant the plan sponsor exclusivity concerning the transaction.

That requirement gives the players meaningful leverage.

LIV needs more than golfers willing to appear in advertisements for LIV 2.0.

It needs enough creditor-athletes to approve the economic bargain.

For stars with substantial claims and substantial value to any future league, the negotiations may therefore concern several things at once: treatment of old claims, new signing compensation, common equity, team ownership, NIL rights, governance, future services—and the option of playing elsewhere.

The bankruptcy courtroom and the player-recruitment market have effectively merged.

The September 10 order does not mean LIV has emerged from bankruptcy.

It does not mean the 52.5%-player-owned structure has been approved.

It does not mean every current LIV golfer will participate.

It does not mean existing player contracts have simply vanished.

And it certainly does not guarantee a 2027 LIV season.

The proposed transaction remains subject to additional negotiations, player participation, definitive documentation, bankruptcy-court approval, and ultimately confirmation of a Chapter 11 plan. A reorganization plan must satisfy the requirements imposed by the Bankruptcy Code before a court can confirm it.

There is also an important distinction between the two capital providers currently appearing in the story.

PIF is supplying the bankruptcy bridge financing. BC Partners is positioned as the anchor investor in the proposed post-bankruptcy business. PIF therefore has not disappeared from LIV overnight, even though the restructuring is designed to produce a substantially different ownership and financing structure.

Three dates now matter.

September 30: deadline for objections to final approval of the DIP financing.

October 7: final DIP-financing hearing.

Around October 13: the current deadline for LIV to obtain the required level of player support for the BC Partners restructuring.

But the number worth watching is not $14 million.

It is 52.5%.

If LIV pulls off the proposed transaction, the league that once disrupted professional golf by transferring extraordinary financial risk from golfers to sovereign capital could emerge from bankruptcy doing almost the opposite.

The players would still be the product.

They would also increasingly be the owners.

And when athletes become owners, the upside becomes theirs—but so does much more of the risk.