A stunning merger between the PGA Tour and Saudi Arabia-backed LIV Golf is making waves across Washington, D.C., drawing the ire of lawmakers and generating discussions of probes.
The deal follows more than a year of antitrust litigation between the two leagues, after LIV Golf hooked some of golf’s top talent with mega-contracts. The PGA Tour responded by barring those who jumped to the new league from competing in its own tournaments.
Now, the partnership puts the PGA Tour in the crosshairs of critics who decry the move as an attempt at combining with a foreign power with well-documented human rights abuses in order to create a monopoly on the sport.
“The PGA Tour has spent two years lambasting Saudi sports-washing and paying lip service the integrity of the sport of golf, which will now be used unabashedly by the Kingdom to distract from its many crimes,” Sen. Richard Blumenthal (D-Conn.) said in a statement Tuesday.
“The PGA Tour has placed a price on human rights and betrayed the long history of sports and athletes that advocate for social change and progress. I will keep a close eye on the structure of this deal and its implications,” he added.
Why PGA merged with LIV Golf
An agreement reached earlier this week would end a lawsuit filed by the nonprofit PGA and LIV and combine the two leagues — along with the DP World Tour, the PGA’s European arm — into a single for-profit entity partly backed financially by the Saudi Arabia Public Investment Fund (PIF).
The rival league, operated by former PGA golfer Greg Norman, was formed in 2021 and drew controversy after poaching golfers from the PGA Tour with lucrative contracts.
These players were then suspended from playing in PGA Tour events, triggering scrutiny into the tour’s potential anti-competitive acts and whether LIV acted unlawfully by interfering with tour members’ contracts.
The PGA Tour added in its announcement that the three organizations will work together in good faith to “establish a fair and objective process” for any player who wished to reapply for PGA membership following the 2023 season.
“After two years of disruption and distraction, this is a historic day for the game we all know and love,” PGA Tour Commissioner Jay Monahan said in a statement.
Lawmakers slam ‘shameless cash grab’
After the Tuesday announcement, Senate Finance Committee Chairman Ron Wyden (D-Ore.) dealt harsh criticism toward Monahan, accusing him of hypocrisy and calling the move a “shameless cash grab” that would meet challenges on Capitol Hill.
Monahan told reporters following a meeting with PGA Tour players after the deal was announced that he accepted the likelihood he would face accusations of hypocrisy. He previously bashed LIV and the golfers who joined it, invoking Saudia Arabia’s record on human rights and its alleged connections to the 9/11 terrorist attacks.
“I recognize that people are going to call me a hypocrite,” Monahan said after the merger.
“I accept those criticisms. But circumstances do change.”
The PIF is led by Saudi Crown Prince Mohammed bin Salman, who ordered the murder of Washington Post journalist Jamal Khashoggi in 2018, according to the CIA.
President Biden previously pledged to make the crown prince a “pariah” over the killing.
Saudi Arabia has also been at the center of recent human rights abuses, including a crackdown on women’s rights activists in 2019 and mass executions of imprisoned civilians the same year.
And private comments Crown Prince Mohammed reportedly made as gas prices soared last year shed further light on his fraught relationship with Washington.
After Biden vowed consequences in response to Saudi Arabia’s oil cuts, the crown prince said privately last fall that “he will not deal with the U.S. administration anymore,” and later promised “major economic consequences for Washington,” the Washington Post reported Friday.
The commissioner also brushed aside the idea that combining the two leagues, along with the European tour, would create antitrust issues.
“Every single player in men’s professional golf is going to have more opportunity and more growth,” Monahan said in an interview with CNBC. “We are going to grow our industry. This is all positive.”
Meanwhile, Rep. John Garamendi (D-Calif.) said the decision to merge “flies in the face of the PGA players who turned down hundred-million-dollar paydays from the Saudi-backed LIV to align themselves with the right side of history and human decency.”
Garamendi on Wednesday introduced the “No Corporate Tax Exemption for Professional Sports Act,” which would strip the PGA Tour of its federal tax exemption.
“The notion that the Saudi Sovereign Wealth Fund would pay zero dollars in taxes on their blood money and potentially [make] billions of dollars in profits while countless American families pay their fair share while struggling to make ends meet is ludicrous,” he added.
Will D.C. try to break up the deal?
Congressional critics of the merger are looking for ways the deal could run afoul of antitrust or national security laws.
Wyden pledged “to dive into every nook and cranny of Saudi Arabia’s deal with the PGA Tour. As a start: U.S. officials need to consider whether a deal will give the Saudi regime improper control or access to U.S. real estate.”
Merging the leagues might raise concerns that a foreign power could influence politics, Bruce Riedel, a senior fellow at the Brookings Institution and a veteran intelligence analyst, told The Hill.
“The Saudis already own considerable property in the United States, so the security implications of this deal only add to concerns that the Kingdom can influence politics in America by showing favor to aspiring politicians,” Riedel said.
But it is unclear if the potential threat rises to the level of a foreign investment investigation by the Committee on Foreign Investment in the U.S. (CFIUS), which has the power block foreign acquisitions of U.S. companies.
CFIUS would require both legal jurisdiction and evidence of a real national security risk to get involved, experts told The Hill.
Emily Kilcrease, a senior fellow at the Center for New American Security told The Hill that publicly available information on the deal seems to indicate a merger where the Saudis would have significant control over important matters related to the PGA Tour, meaning the legal jurisdiction threshold would be covered.
But on the matter of national security, there would be questions about the intent of the foreign actor to do something nefarious, whether the foreign actor can exploit a vulnerability with the acquisition, and what consequences would arise from a harmful act, Kilcrease said.
“Clearly, people are concerned about the Saudis for very good reasons. It’s not evident to me at this point what they can do with the PGA Tour that would raise the level of a national security risk,” Kilcrease continued.
“Obviously, they’re engaging in this because they’re trying to sport wash or kind of deflect attention from their human rights abuses,” she added.
Why Trump cheered the merger
Former President Trump praised the leagues’ agreement earlier this week on his Truth Social account.
“Great news from LIV golf. A big, beautiful, and glamorous deal for the wonderful world of golf. Congrats to all!!!,” Trump wrote in all capital letters on his account.
Trump, whose golf courses are a major part of his brand and business, has hosted LIV events at his own facilities this year, with three total on the docket.
The former president predicted last year that the two leagues would eventually converge, and players who stayed with the tour would “get nothing but a big ‘thank you’ from PGA officials.”
Trump and his family following his presidency have also been tied to lucrative deals with Saudi Arabia.
A Saudi real estate company inked a deal with the Trump Organization for more than $1 billion in November to use the Trump name on its hotel, golf course and villas, The Associated Press reported.
And Trump’s son-in-law Jared Kushner received a $2 billion investment from the PIF into his investment firm after Trump left the White House, according to a U.S. House panel.
“They make no secret that they prefer Trump and his family to Biden,” Riedel said of the Saudi royal family.
Updated June 12 at 11:08 a.m. EDT.