PGA Tour logo during the third round of the Travelers Championship on June 24, 2017 at TPC River Highlands in Cromwell, Connecticut.
Fred Kfoury | Icon Sportswire | Getty Images
Key lawmakers on Wednesday invited the officials behind the proposed deal between the PGA Tour and Saudi Arabia-backed rival LIV Golf to testify at a Senate subcommittee hearing.
Senator Richard Blumenthal and Senator Ron Johnson, respectively the chairman and leading member of the Senate Committee on Homeland Security’s Permanent Subcommittee on Investigations, said the panel will hold a hearing on the merger on July 11.
Blumenthal, D-Conn., and Johnson, R-Wisc., request testimony from tour commissioner Jay Monahan, LIV Gulf CEO Greg Norman and Yasir al-Rumayyan of the Saudi Arabia Public Investment Fund.
In a letter to Monahan on Wednesday, the senators said the subcommittee reviewed the proposed deal and the Saudi fund’s “investment in golf in the United States, the future of PIF-funded LIV Golf, the risks associated with a foreign government’s investment in U.S. cultural institutions”. , and the implications of this planned agreement for professional golf in the United States going forward.”
In response to the invitation, a spokesperson for the PGA Tour told CNBC that they “look forward to appearing before the Senate subcommittee to answer their questions about the framework agreement that we believe establishes the PGA TOUR as the leader of the future of keeps golf professional and benefits our players and fans. and our sport.”
The tour did not say whether Monahan, who was named future commissioner of the new entity but recently went on leave as he recovers from a medical condition, would testify. The organization has so far not specified what the medical condition is.
The Public Investment Fund has not responded to a request for remark.
“Fans, the players and concerned citizens have many questions about the planned agreement between the PGA Tour and LIV Golf,” Johnson, the rankings member, said in a press release. “I look forward to hearing testimonials from those individuals who are best placed to help the public understand the current state of professional golf.”
The Subcommittee on Investigations has broad jurisdiction to investigate everything from corporate abuse to government waste. But committee hearings are relatively rare – this is only the second this year – and they typically mark the early stages of a longer investigation.
This one is no exception. Earlier this month, Blumenthal announced his intention to use the commission to investigate the merger between the PGA Tour and Saudi Arabia-backed LIV in light of Saudi Arabia’s human rights violations.
He gave Norman and Monahan until June 26 to deliver hundreds of documents and internal communications.
As a sign of how serious the investigation could get, Blumenthal later told CBS that if the PGA Tour or LIV didn’t provide the information he was looking for, he would be willing to “use all available resources, including subpoenas and hearings.” “. , recommendations for action and legislation.”
In particular, Blumenthal has expressed interest in whether the PGA Tour deserves to maintain its nonprofit tax-exempt status as a business association that benefits its members.
Since its inception in 1929, the PGA Tour has grown into a $1.5 billion giant fueled largely by large tournament revenues, broadcasting rights and licensing fees.
If LIV makes a large investment in the PGA Tour, it would ostensibly create an unprecedented situation where a foreign investor could profit from buying a US tax-exempt organization.
On Wednesday, a spokesperson for the PGA Tour stressed that the American group will officially remain a corporate association and that the tour, not LIV, will oversee any partnership.
The PGA Tour is “working to negotiate a final agreement that is in place [its members’] best interest and ensure the tour leads any new venture,” the rep said.
Shock and control
Earlier this month, the PGA Tour announced the deal with its Saudi-backed rival that would end ongoing litigation between the two entities. The entities have said they would merge the business into a larger, soon-to-be-named company headed by Al-Rumayyan.
In the wake of the deal’s announcement — which came as a surprise after months of wrangling and litigation — U.S. officials began pushing for more information about how the deal came about and what it means for the sport.
Democratic Senator Elizabeth Warren of Massachusetts and Ron Wyden of Oregon last week raised antitrust concerns and asked the Justice Department to investigate the deal. Shortly thereafter, the DOJ’s antitrust department informed the PGA Tour that it would review the proposed merger.
The proposed agreement has raised questions across the board. The PGA Tour and LIV Golf had traded barbs for some time, and both leagues had alleged that the other’s contracts and policies restricted golf talent and stifled true competition.
Golfers are divided between the two organizations, as some left the tour for the high wages handed out by LIV.
Since its launch in 2022, LIV has been embroiled in controversy and criticism. The Public Investment Fund is, in fact, not owned by the government, as the name suggests. It is a sovereign wealth fund controlled by Saudi Crown Prince Muhammed bin Salman.
The fund has been accused of “sportwashing”, an attempt to use LIV Golf to improve the oil-rich nation’s image and distract from the kingdom’s history of human rights abuses.