What if LIV Golf’s biggest asset isn’t its players, global presence, or its teams, but a $5 billion tax loss? That’s the question golf analyst Brendan Porath discussed during a recent episode of Fried Egg Golf and The Shotgun Start. London-based private equity firm BC Partners, worth $40 billion, has agreed to anchor a $300 million investment into a restructured LIV 2.0. This positions the firm as the rebel league’s savior. But as court filings and industry reporting show, the deal is built around preserving LIV’s $5 billion in net operating losses (NOLs), which could shelter future profits from taxes for years.

“So they have $5 billion of NOL on their books they’ve acquired. Usually, when you have an NOL, it’s for someone who is going to want their money back or expecting their money back, or there’s a ton of liability with like, holy [ __ ] you have 800 million lawsuits because you caused cancer or you polluted the world or all these things like that kind of doesn’t exist with LIV. It was a Saudi-type business model of, like, here’s your $5 billion in losses; they’re probably going to want some of it back,” Porath said.

“There are, of course, vendors, contractors, yes, creditors, some, but not substantially. So, if BC acquires this thing, these losses, it’s above board. It’s smart. Is it insane? So bad. It’s good. You were so bad you are now attractive that they can now use this on whatever they buy going forward, and not have to pay any taxes on any of the gains for it because they have this NOL in their pocket. Where does actual, like this is a golf podcast, where does actual LIV come into play? I don’t think very; it’s not a high priority.”

Court filings show LIV Golf Inc. holds about $3 billion in U.S. NOLs and LIV Golf Ltd. about $2 billion in U.K. losses, totaling around $5 billion in tax attributes. As Porath noted, a few creditors would want to get their money back.

For instance, Jon Rahm (~$7.5 million), Bryson DeChambeau (~$5.8 million), Dustin Johnson (~$.5.5 million), and many other players are listed as creditors in the bankruptcy filing. A few vendors, including Fresh Tape Media ($1.23 million), Mobii Systems ($1.10 million), and Deltatre ($935,000), have filed lawsuits. However, these amounts pale in comparison with LIV’s $5 billion in NOLs.

This could benefit BC Partners by offsetting future taxable income. It allows a profitable business to pay little or no tax on gains. In bankruptcy, these can be preserved if “old and cold” ownership rules are met. This could be one reason LIV Golf’s new plan includes giving players 52.5% equity, so the tax assets remain usable.

Brendan Porath also noted that BC Partners has used this playbook before, which is true. Most notably, the private equity firm had acquired equities in ContextLogic, the former parent of Wish.com. The once-hot e-commerce app collapsed and sold its operating assets in April 2024 for about $161 million. After the sale, ContextLogic survived as a publicly traded shell whose most valuable assets were not products or users but billions in NOLs accumulated during Wish’s years of red ink. BC Partners turned that shell into an acquisition vehicle that buys profitable businesses while paying little or no tax on the resulting profits.

That’s why even PIF pressed BC Partners to prove its commitment.

PIF has “expressed concern to LIV management that BC Partners’ primary motivation for the deal is to acquire LIV’s $5bn of net operating losses,” according to the Financial Times.

The problem is that if BC Partners is trying to get the $5 billion NOL, LIV Golf will become secondary. Instead of becoming a global golf tour, it will operate as a lean, low-cost vehicle whose main value is its tax shield. This would eliminate the importance of golf, broadcast deals, or star power.

Thus, even if the LIV 2.0 structure somehow works in 2027 or maybe beyond, the league’s long-term sustainability remains doubtful.

PIF’s concern led BC Partners to make an additional $10 million commitment to fund 2027 start-up costs. But the question is whether this small amount is enough to prove commitment.

The management has pitched LIV Golf 2.0 as a scaled-back model with about 10 events and lower purses. But its future ultimately depends on whether BC Partners sees the league as a golf business or a tax asset. If those tax losses are the real prize, golf could play a surprisingly small role in LIV’s next chapter.